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He is also known for picking high-quality value stocks in both unlisted and listed space. Even ace stock picker Rakesh Jhunjhunwala considers Damani his guru. This makes a case for zeroing in on his chosen stocks.
Being a promoter of Avenue Supermarts, Radhakishan Damani held 37.19 per cent stake in the company as of December 31. However, he along with his family members, trusts and investment firm had 79.73 per cent stake in the company.
Shares of Avenue Supermarts recently scaled a fresh all-time high of Rs 2,357 on February 10 after the company announced a share sale for institutional investors on February 5. The company plans to raise up to Rs 4,000 crore at Rs 2,049 apiece.
Earlier, the company got listed on March 21, 2017 at a market capitalisation of Rs 39,988 crore, which swelled to over Rs 1.50 lake crore of Tuesday, February 11.
As of December 31, Radhakishan Damani held more than 1 per cent stake in Delta Corp, Simplex Infrastructure, The India Cements, VST Industries, Foods & Inns and Spencer's Retail.
His holdings in Delta Corp declined to 1.32 per cent at the end of December quarter from 1.53 per cent as of September 30. He was not among the key shareholders in VST Industries, Simplex Infra and Spencer’s Retail at the end of Q2FY20, but held over 1 per cent in all of them at the end of Q3FY20.
On the other hand, Damani increased his holding in India Cements to 4.73 per cent from 1.30 per cent, but kept his stake constant in Foods & Inns at 4.72 per cent.
India Cements recently reported widening of its consolidated net loss to Rs 8.79 crore for the third quarter ended December 31, 2019 against a net loss of Rs 4.32 crore posted for the October-December period a year ago.
Reliance Securities has a ‘hold’ rating on India Cements with a target price of Rs 80. "The company's inability to improve its balance sheet due to a consistent increase in working capital requirement does not augur well for India Cements, which may lead to further delay in capacity expansion. We continue to believe that strong cash generation and debt reduction will be key catalysts for the stock, which might not get re-rated until then,” the brokerage said.
On a year-to-date basis till February 10, share prices of Simplex, Avenue Supermarts, VST Industries and The India Cements rose 74 per cent, 35 per cent, 6.16 per cent and 5.32 per cent, respectively. On the other hand, shares of Delta Corp and Foods & Inns declined 16.27 per cent and 13.60 per cent, respectively, during the same period.
VST Industries posted 46.97 per cent year-on-year growth in net profit at Rs 81.48 crore for Q3FY20.
Brokerage firm ICICIdirect in January gave a 'buy’ call on the cigarette firm with a target price of Rs 5,200. “With a wide presence at lower price points and strong distribution of one million retail outlets, VST’s brand has been especially popular in West Bengal, Bihar, Uttar Pradesh, Andhra Pradesh and Telangana contributing around 60 per cent of volumes. The company’s fundamentals are driven by a strong capital structure, steady cash flow and consistent dividend payment.”
The BSE Midcap and Smallcap indices gained nearly 8 per cent and 5 per cent, respectively, year to date, while BSE Sensex inched lower by 0.66 per cent during the same period.
If you are thinking of copying Damani's style, then Kolkata-based investors Abhishek Basumallick, Chief Equity Advisor at Intelsense Capital, has a piece of advice for you.
“If your own mindset aligns with that of a successful investor, then you can copy the style. In fact, if there is some broad alignment in mindset, you may be actually better off by trying to copy a successful investor initial few years. It may increase the odds of your success. But ultimately you have to figure out what works for you," he said.
Basumallick said successful investors keep updating themselves, so you need to understand that aspect as well. The bottom line is, you should do what works for you.
On the other hand, Mumbai-based investor Vijay Kedia said imitation has its own limitations. “You cannot just copy and paste other’s investment style. Investors should modify the approach and adapt as per their risk appetite,” he said.
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10 Comments on this Story
mohanqp Thomas340 days ago
Every body thrives on insider information.
mohanqp Thomas340 days ago
All old model business nothing innovative.
Mukul Roy/Power340 days ago
There are people who often tell me that Modi lost Chhattisgarh, Rajasthan, MP and recently Jharkhand. Today BJP lost Delhi as well, and the Modi wave has come to an end. They often think that a loss of Modi in elections would frustrate me.
Listen guys, I do not care for win or loss in elections. I have stood behind a man unconditionally who has put interests of the country way above winning elections. It takes guts to introduce CAA, NPR and NRC, to scrap Art 370 & 35A, Triple Talaq and many other accomplishments. In India, all you need to win an election is to let the status-quo remain. Announce freebies, make ultra-populist policies, let the bureaucracy & public servants act as per whims and fancies - a victory more or less is guaranteed.
I do not care if he loses an election. I have stood behind him because of principles of putting country above everything - not to taste victory. I have witnessed impossible to happen strongly believe in : MODI HAI TO MUMKIN HAI.