Massive gains gush in from portfolio stocks
Sunil Singhania and his Abakkus PMS Fund have been effortlessly raking in massive gains from the small and mid-cap stocks in the portfolio.
ADF Foods, for instance, is up 77% in the last three months.
ADF Foods is a prime beneficiary of the boom in the “ready-to-cook-and-eat-foods” sector.
The stock is a red-hot favourite stock of Ashish Kacholia, Lashit Sanghavi & Ashwin Kedia.
The stock was first discovered by Dolly Khanna and Porinju Veliyath though both unfortunately prematurely dumped the stock in its infancy.
Thankfully, Porinju has held on tight to Somany Housing (SHIL) and both he and Sunil Singhania are raking in hefty gains.
SHIL is up a mind-boggling 157% in the past three months.
SHIL’s compatriots such as Cera Sanitaryware, Kajaria Ceramics, Acryisl etc are also firing on all cylinders.
It is notable that when SHIL was cruising at Rs. 159, Porinju had advised us to tuck into the stock without any delay on the logic that it is a “grossly undervalued small-cap blue-chip stock” deserving of 5-10x multibagger valuation.
The stock is now sitting pretty at Rs. 247 and it appears that Porinju’s prophecy may come true.
SHIL (CMP 159, M-Cap 1154 Cr), the largest holding in the PMS, is a grossly undervalued small-cap blue-chip stock. It deserves 5-10x multibagger valuation of up to 10K Cr: Porinju Veliyath. SHIL is also a favourite stock of Sunil Singhania Abakkus PMS Fund https://t.co/L7H4s9xMZd pic.twitter.com/8w0K04hsTA
— RJ Stocks (@RakJhun) January 3, 2021
Even Lux Industries, which is the arch rival of Page Industries (Jockey) in the innerwear segment, is doing well and notching up good gains.
The latest portfolio of Sunil Singhania’s Abakkus PMS Fund is as follows:
|Latest portfolio of Sunil Singhania’s Abakkus PMS Fund|
|Company||CMP (Rs)||Nos of Shares||Value (Rs Cr)|
|Jindal Stainless (Hisar)||124||87,19,777||108|
|Rupa & Co||302||12,00,000||36|
|Siyaram Silk Mills||192||588,000||11|
Stocks like Rupa, Technocraft, Acryisl are quoting at mouth-watering valuations
Sunil Singhania has provided a detailed commentary on the prospects of some of the stocks in his portfolio.
He explained that Acrysil, the manufacturer of kitchen quartz sinks, will prosper because there are anti-dumping duties on China by a lot of countries and India is exporting building materials.
“Competitive advantages as far as the labour cost is concerned are helping in the case of India and that is what we are playing through one of the kitchen names you mentioned,” he said.
As regards Rupa, he pointed out that it is a home grown brand facing the second and third tier and the rural side of India and is doing very well.
“Home grown value to sub-premium brands will do very well. We believe in the consumption story of India for a long time,” he said.
He added that he is not in favour of buying MNC brands at 80 PE where the growth rate is 10-12%.
“We would buy maybe a 15-20 PE stock where the growth rate also is 15% and that is where this whole focus on decent home grown brands with very good balance sheets and ROEs exceeding 20% has been the theme,” he added.
As regards Technocraft, he explained that the growth in the real estate sector means that there will be demand for building materials and ancillaries like cement, steel and there is also going to be demand for sectors which assist in construction.
“Technocraft is a diversified engineering company but they have a huge presence in scaffolding and as we have more and more construction activity coming up, that part of the business should definitely do very well,” he said.
“The valuations of these companies are mouth-watering if you take a leap of faith and invest on a three-four- year perspective,” he added with a flourish.
Huge opportunity ahead for ‘SaaS’ & ‘CPaaS’ providers
Sunil Singhania explained that the dominant themes which will play out in the foreseeable future are ‘SaaS‘ (Software as a Service e.g. Netflix, Zoom, Dropbox) and ‘CPaaS‘ (Consumer Platform as a Service e.g. Route Mobile, Tata Comm, Gupshup, Kalyera).
“The digital theme is going to last for a long time and it has got a big boost during the Covid times because the way we work, the way we study, the way we consume, the way we shop, the way we entertain ourselves has completely changed and this is here to stay for a long time,” he said.
“You do not need cash in your day-to-day transactions. You can walk without a wallet if you have your phone in your hand and you will not be inconvenienced,” he added.
He explained that while the growth potential is immense, the thing which we have to look at when we invest in a digital or a high-end company, is the ability of the management to keep on evolving, to keep on adding new services and being up to date as far as technology is concerned.
“You do not want to be stuck in a company which is good right now but which can become obsolete in two-three years,” he warned.
“Invest in companies which have the ability to keep pace with the huge change in technology. You just have to see what has happened in countries like the US and China and suddenly you will realise the huge opportunity which lies ahead of us,” he emphasized with a big smile on his face.
Route Mobile is the biggest bet in the ‘CPaaS’ space
We can see from the portfolio of the Abakkus Fund that Route Mobile, a newly listed mid-cap stock with a market capitalisation of Rs. 9150 crore, has been allocated a massive chunk of 25% of the present AUM.
The stock has been on a scorching multibagger trajectory with a gain of 38% in just the last month.
It is walking on the path of the illustrious Affle India (also a new age tech co) which has given a return of 153% in the last six months.
Sunil Singhania explained the USP of Route Mobile in pithy terms:
“The biggest bet we have is on a CPaaS company and for example every purchase you do on Amazon results in seven to eight messages. You go to an ATM, you need an OTP, you do any shopping, you need an OTP, two factor authentication and so on,” he said.
#3QWithCNBCTV18 | Route Mobile saw strong earnings momentum continuing. “We will announce an acquisition in the next 2-3 wks”, says @RouteSms. Speaking with @latha_venkatesh & @_soniashenoy, he adds that he expects cross-selling opportunities from new acquisition. @Reematendulkar pic.twitter.com/IHuf8TzjeY
— CNBC-TV18 (@CNBCTV18News) January 29, 2021
The entire concept of what is the scope of the CPaaS industry with reference to Route Mobile has been explained in detail by Edelweiss in a recent initiating coverage report.
Route is not the biggest player in CPaaS, it is Tanla Platforms ! But none of these hi-fliers will mention it because they are heavily invested in Route 🙄
Still don’t understand the interest in Route, its only providing SMS services via CPaas which is something anyone can do where as Cpaas is a general term applicable to infinite items. Looks like there is a clear misunderstanding of route business model and scope, myself being from IT industry is surprised at the hype on route. Surely market will realize this at some point and that will be the end of route.
Me too. I know the same thing with the one who commented here earlier. as far as I am concerned, Tanla Platforms is also the biggest player in CPaaS. Well, I can’t blame people for being interested in Route since that is their preference. However, I really think that there are lots of better invesmtents rather than that. That’s just my opinion about this matter.