The first good news is that there is a steady increase in the AUM of the PPFAS Mutual Fund. As of 30th May 2015, the AUM stood at Rs. 602.71 crore. That is an increase of about 41% over the AUM of Rs. 426.03 crore as of 30th May 2014.
The other good news is that the PPFAS Mutual Fund has added Balkrishna Industries to the portfolio. The Fund bought 140,259 shares in May 2015 worth about Rs. 10 crore.
We have earlier seen that Balkrishna Industries is a value investors’ favourite owing to its niche area of manufacturing “off road” highway tyres. Its valuations are also reasonable.
Sanjoy Bhattacharyya, the doyen amongst value investors, recommended the stock in March 2013. At that time, he called it a “compelling investment opportunity” and a “solitary exception”. He explained that Balkrishna Industries is “well positioned in a highly profitable niche”.
Sanjoy Bhattacharyya was perfectly correct in his analysis because the stock price has jumped from Rs. 250 to Rs. 696, a handsome return of 175%.
Even in his latest interview, Sanjoy Bhattacharyya heaped lavish praise on Balkrishna Industries by emphasizing that it enjoys the “moat” of operating in a niche area.
Akash Prakash is another ace investor who has put his faith in Balkrishna Industries. His Amansa Capital invested Rs. 108 crore in buying 17,50,000 shares of Balkrishna Industries on 20th March 2015.
If you want to read a research report on Balkrishna Industries, there is one available from IndiaNivesh.
I dont believe that PPFAS is the right place to put your money, i would avoid the fund house and their fund management style totally. They have bet on the worst stocks and companies in the garb of value investing with overweight positions. IL&FS Investment Managers, Noida Toll not great businesses to own. The fund manager doesnt correct mistakes and often holds on to duds for years. I have evaluated their PMS in detail and came with this conclusion. The same money is now directed to MF. Currently their performance looks good because of 35% exposure to the USA markets and the dollar rally(though the currency might be hedged). Avoid at all cost.