Praxis Home Retail, new entrant in Porinju Veliyath’s portfolio
Col. Mukeshbhai, the head of the Intelligence Wing in the RJ Fan Club, solemnly announced Porinju’s new acquisition.
“Porinjubhai ne Praxis Home Retail ka share portfolio mein add kiya hai,” he told the august audience at the Fan Club.
As usual, Mukeshbhai was late in his information gathering.
Equity Intelligence had grabbed a chunk of 2,65,090 shares of Praxis Home Retail in the quarter ended December 2018.
This remained unnoticed because the markets were in the doldrums at that time and we were in no mood to dabble with stocks.
However, now that the markets are surging like rockets, we have to remain alert for profit-making opportunities.
Porinju has increased his stake in Praxis Home to 3,30,000 shares as of 31st March 2019, which implies that the stock is a high-conviction bet for him.
The investment is worth Rs. 4.13 crore at the CMP of Rs. 125.
| PRAXIS HOME RETAIL LTD – KEY FUNDAMENTALS | |||
| PARAMETER | VALUES | ||
| MARKET CAP | (Rs CR) | 308 | |
| EPS – TTM | (Rs) | [*S] | – |
| P/E RATIO | (X) | [*S] | – |
| FACE VALUE | (Rs) | 5 | |
| LATEST DIVIDEND | (%) | – | |
| LATEST DIVIDEND DATE | – | ||
| DIVIDEND YIELD | (%) | 0.00 | |
| BOOK VALUE / SHARE | (Rs) | [*S] | 17.50 |
| P/B RATIO | (Rs) | [*S] | 7.15 |
[*C] Consolidated [*S] Standalone
(Source: Business Standard)
Ashish Chugh had recommended Praxis Home Retail in April 2018?
Ashish Chugh, the authority on ‘hidden gem‘ stocks, issued a cryptic tweet in which he extolled the virtues of a micro-cap.
Exploring opportunity in a recently Demerged Co –Mcap 550 cr (less than 2% of parent)
Brick & Mortar + Online presence
No listed peer. Unlisted peers –very high valuations
Promoters increased stake by 9.5-10% -last 1 month
Looks like an interesting high potential business
— Ashish Chugh (@hiddengemsindia) April 24, 2018
While Ashish Chugh did not name the stock, his astute followers guessed that the reference is to Praxis Home Retail.
Yes sir, #PraxisHomeRetail is an good long term bet to keep on watchlist, From Jan-Mar18 Promoters has increased 5%+ in holding, CAGR at 20% from 5 years but P/E: 31 & P/B: 50+ , Future earnings should b watched pic.twitter.com/AT7y7QxWSp
— SShettyy007 (@SShettyy007) May 14, 2018
Praxis from Future Retail pic.twitter.com/0rCNCyPc3p
— Sameer (@sameegharsam) April 24, 2018
Praxis Home Retail :)) Disc – I own it
— Siyaram Tiwari (@Siyaram7) April 24, 2018
Naturally, the stock effortlessly surged and tripped the upper circuit.
Praxis @ UC…!! ??
— Blujay (@Darshan_shah) April 24, 2018
Ashish Chugh has maintained a studied silence on the subject and neither confirmed nor denied the guesses of his followers.
Stock tanks after poor Q results
At the time of Ashish Chugh’s tweet, Praxis was coasting at Rs. 281 on 27th April 2018.
Unfortunately, thereafter, the Bear market coupled with poor operational performance has taken its toll on the stock.
The stock is now languishing at Rs. 125, down a whopping 55% from the ATH.
| PRAXIS HOME RETAIL LTD – FINANCIAL RESULTS | |||
| PARTICULARS (Rs CR) | MAR 2019 | MAR 2018 | % CHG |
| NET SALES | 159.12 | 139.81 | 13.81 |
| OTHER INCOME | 0.93 | 2.33 | -60.09 |
| TOTAL INCOME | 160.05 | 142.14 | 12.6 |
| TOTAL EXPENSES | 182.86 | 142.8 | 28.05 |
| OPERATING PROFIT | -22.8 | -0.66 | -3354.55 |
| NET PROFIT | -25.01 | -1.24 | -1916.94 |
| EQUITY CAPITAL | 12.32 | 12.32 | – |
Tata Global Beverages & Tata Chemicals: Multibaggers in the making?
It is well known that Tata Global Beverages & Tata Chemicals, the venerable blue-chips, are all-time favourite stocks of Porinju Veliyath.
He never tires of talking about them though they have sorely disappointed him.
Porinju pinned blame on “mismanagement by Tatas” for the woes of the two powerhouses.
My stocks, Tata Global Beverages and Godrej Ind were hammered down by some idiots…. I don't like this!!!! May be due to F&O expiry….
— Porinju Veliyath (@porinju) November 25, 2010
@abadhya yes, Tata Global is a great value pick. Only problem is mismanagement by Tatas..
— Porinju Veliyath (@porinju) February 3, 2012
MarketCap of Britannia 75,000 Cr Vs Tata Global 14,000 Cr. Why @TataCompanies @RNTata2000 failed to appoint a smart CEO and grow the high potential consumer biz, @TGBL ?
— Porinju Veliyath (@porinju) September 6, 2018
TGBL, Tata Coffee & Indian Hotels could go multi-baggers if @RNTata2000 'FULLY' retire his 'loyal guys' are ousted from @TataCompanies
— Porinju Veliyath (@porinju) November 4, 2016
Thankfully, the news about the transfer of the FMCG businesses of Tata Chemicals to Tata Global and the renaming of the latter to ‘Tata Consumer Products‘ has sparked new life into both stocks.
.@TataCompanies moves to bring FMCG businesses under one roof. Tata Chemicals to transfer branded food businesses to Tata Global; aims at unlocking value and aligning revenue and cost synergies. New entity to be called Tata Consumer Products pic.twitter.com/eotAs9BLrJ
— ET NOW (@ETNOWlive) May 16, 2019
They are now preparing to surge like rockets.
In his latest interview, Porinju stated that multibagger gains will soon be ripe for the picking.
“I think the Tata story has just started playing. Everybody had been waiting for this because Tatas are a big company – Tata Global beverages or Tata Chemicals. Most of the time they were bigger than the Nestlé’s and Colgate’s of the world… now they are consolidating and looking at it as a consumer company, that is why they are perhaps changing the name from Tata Global Beverages to Tata Consumer after merging the consumer division of Tata Chemicals,” he said.
He opined that there could be 5 to 10-bagger gains in the foreseeable future.
“I feel now it is around Rs 15,000 crore market cap, maybe it is Rs 20,000 crore after the merger. Maybe we can look at next 5-6 years and there is a potential if well-managed, this can go to Rs 1 lakh crore market cap,” he pointed out.
#OnCNBCTV18 | @porinju, Equity Intelligence India says expect money to flow into the small & midcap sentiment; One has to bet on cos with sound biz, but beaten down valuations @_anujsinghal @SurabhiUpadhyay pic.twitter.com/gvPlFmWRmV
— CNBC-TV18 News (@CNBCTV18News) May 27, 2019
I sense both Tata Global & Tata chemical likely to get re-rated
Both stocks on radar of Special situation funds, PMS, mutual funds.
Not possible to share much on social media https://t.co/RWKX1kfFAS— Rakesh Bansal (@iamrakeshbansal) May 28, 2019
What about Tata Investment Corporation?
According to some experts, a better way to play the growth in the Tata group of companies is through Tata Investment Corporation, the holding company.
Varinder Bansal, the authority on holding companies, has claimed that Tata Investment Corp is quoting at a steep discount to its intrinsic value and is a bargain buy.
Tata investment
M-cap 4000 cr
Total value of investments (direct Tata co + investments in other cos) around 13000 cr
Trading at 70% discount— Varinder Bansal ?? (@varinder_bansal) June 20, 2017
Conclusion
Investing in venerable blue-chip stocks like Tata Global and Tata Chemicals is a fail-safe investment strategy. Assuming these stocks get their act in order, we can feast on multibagger gains as correctly forecast by Porinju Veliyath and the other experts. However, even if they continue to goof up, we are assured of getting our money back in one piece!
Thanks for letting us know! Now the stock should get some support from free fall it has had. Thanks for writing a very informative article and i am invested from the price 280 like higgen gems and equity intelligence. I would have been happy if you would have written it at 200 the stock might have not come to 120.
Looks like PV didn’t learn any lesson from LEEL and other Chor Companies. I can’t believe he is choosing to invest 45 Crores in less than 500 Cr market cap PRAXIS.
Sorry. There was a typo. The investment is Rs. 4.13 crore
Another chor company for sure.4cr in drain..banda seekhta hi nahi