Today, if Porinju Veliyath makes a stock recommendation, everyone rushes to see what it is. However, this was not always the case. In fact, in the not-so-distant past, Porinju’s stock picks were not held in much esteem and people were dismissive about it.
NIIT is a case in point. Though it has always been one of Porinju’s favourite stocks and he has never tired talking about it, very few people have acted on his recommendation.
In an interview to ET on 9th October 2014, when Porinju was asked to give some “inspiring” stock ideas, he waxed eloquent about NIIT. He said:
“NIIT Ltd is a stock I have recently acquired in our portfolio. It is a turnaround story and this has been ignored in the last few years. Of course it is a very big brand name, the management is very professional and their new offering in the corporate learning segment is really picking up. They have made huge investments in the past and I feel the stock can be a multibagger from these levels, but it may take time”.
Later, when he was asked why he is so positive on NIIT, Porinju called the stock “very, very safely priced” and said:
“Definitely, it is a very good company. They have sailed through the bad times of the bad cycle of their business, the management is world class and they have placed the company in such a way that any emerging opportunity will be taken advantage of. Today at 900 crore, this is one stock which investors should bet on from a two, three, four-year perspective. It is very-very safely priced. The company is holding significant portion of the NIIT Technology and the balance sheet is very clean, the management is very professional and I am very bullish on it”.
Even on twitter, Porinju never missed an opportunity to talk about NIIT. He tweeted:
— Porinju Veliyath (@porinju) July 4, 2015
Well, Porinju has made a lot of money from NIIT because the stock is up a magnificent 125% in just the last three months. In the last one month, the stock is up 96%. On a YOY basis, the stock is up 89%. Over two years, the stock is up a mind-boggling 418%.
NIIT is still a small cap with a market capitalisation of Rs. 1337 crore. From the youtube interview, it does look that the company is headed on a strong growth trajectory.
The ultimate endorsement that NIIT is in fact a “very, very safe stock” and that it is at an “inflection point” as professed by Porinju comes from Vijay Kedia.
Vijay Kedia declared a few months ago that he is getting very jittery about the valuations of his favourite stocks like Cera Sanitaryware and Atul Auto and that he is looking for “safe” stocks to invest in.
His quest for “safe” stocks has taken him to names like Salzer Electronics, Bharat Electronics, Repro, Sudarshan Chemicals etc.
The important point to note is that the fact that Vijay Kedia calls a stock a “safe” stock does not mean that he doesn’t expect jumbo returns from them. In fact, each one of his so-called “safe” stocks has also delivered humungous returns and one of them (Salzer Electronics) has also attracted the attention of whiz-kid Sanjoy Bhattacharyya.
Today, Vijay Kedia agreed with Porinju Veliyath’s assessment of NIIT. His investment firm, Kedia Securities Pvt. Ltd, bought 10,00,000 shares of NIIT at Rs. 80.87 each. The amount invested is Rs. 8.08 crore.
We shouldn’t be surprised if the combined charm and good luck of Vijay Kedia and Porinju Veliyath sends NIIT on a stratospheric trajectory even from this stage.