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    Vijay Kedia’s next 2 multibagger bets are a play on the 4th basic necessity

    Synopsis

    Kedia strictly adheres to his own investing principle called SMILE, which translates into Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.

    As a caveat, Kedia said all the stocks mentioned in the interaction are fairly valued, but are not recommendations for investors.

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    Mumbai-based investor Vijay Kedia, known for spotting multibaggers such as Punjab Tractors, Cera Sanitaryware and Atul Auto, has increased stake in at least two smallcap firms, including Tejas Networks and Ramco Systems, during the September quarter.

    Latest shareholding data revealed that Kedia’s firm Kedia Securities held 39 lakh shares, or 4.21 per cent stake, in Tejas Networks as of September 30 against 14 lakh shares, or 1.52 per cent stake, that it held at the end of the preceding quarter.

    “The theme now is Roti, Kapda, Makaan aur Data,” the Dalal Street veteran said about his investment in Tejas Networks.

    “You can live with old clothes and old house, but you consume data with your breath. Tejas is one of the highest R&D spenders in India. The R&D spend by the company has been 10-15 per cent of its revenue, which is one the highest in any segment, be it technology or pharma. Half of its workforce is engineers and this is another positive for the company,” Kedia said.

    “Tejas’ addressable market size is worth more than $7 billion a year, whereas they are not even at $100-150 million revenue mark yet. The company fits into my ‘SMILE’ principle,” he said.

    Kedia strictly adheres to his own investing principle called SMILE, which translates into Small in size, Medium in experience, Large in aspiration and Extra-large in market potential.

    Shares of Tejas Networks have soared 193 per cent to Rs 92.90 since the beginning of this financial year till October 23. The company is an optical and data networking products company that specialises in providing design, development of high-performance and cost-competitive products to telecommunication and internet service providers, utility companies, defence firms and government entities situated across over 60 countries.

    Kedia also raised his stake in IT firm Ramco Systems by 28 basis points to 1.39 per cent during the quarter. The scrip has gained 556 per cent to Rs 475 as of October 23 from Rs 72.50 on April 1.

    “IT products take 5-7 years to stabilise. What Ramco has developed with a few hundreds of crore of rupees would take billions of dollars if developed in the US. No IT company in India, except Ramco, has any products of international standards,” he said.

    Kedia further said product companies should be given much more value than services firms. “It seems the time has come and you will find every product company commanding a never-before kind of higher premium,” says he.

    “Ramco is an Indian multinational company and Indian's only answer to international giants like Oracle, SAP and Microsoft in the products category,” Kedia said, adding that the company also fits well into his SMILE principle.

    On the other hand, he reduced his stake in Vaibhav Global by 13 basis points, in Sudarshan Chemicals by 29 basis points and in Neuland Labs by 39 basis points.

    “From nowhere to the world’s third-largest company in speciality pigments, Sudarshan is competing with global giants like BASF and Clariant, among others. The company is now aspiring to become the second largest. The addressable market size is more than $10 billion whereas they are not even at $1 billion as of today,” he said about Sudarshan Chemicals.

    Shares of Neuland Labs have advanced 337 per cent since April 1, while those of Sudarshan Chemicals have risen 37 per cent and Vaibhav Global 144 per cent. BSE benchmark Sensex has gained 44 per cent during this period.

    “In general, investors should stay stock-specific in the equity market rather than focus on the index valuation. As I always say, the bull market is always there in a particular stock or sector. The next set of multibaggers can come from sectors like IT, pharma, technology or telecom players,” he said.

    As a caveat, Kedia said all the stocks mentioned in the interaction are fairly valued, but are not recommendations for investors.

    At present, Kedia’s net worth stands at Rs 373 crore, up over 50 per cent from the March low of Rs 244 crore, data available with Trendlyne showed.
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    6 Comments on this Story

    Tara26 days ago
    Rules for Focused Success in a Distracted World
    amzn.to/37KK9Ql
    VIVEK SHIVDASANI26 days ago
    I am keenly watching Vijay Kediaji’s investment in Tejas Networks.
    ashok kumar29 days ago
    Another worldclass Indian product company is Subex. They have 300 installations across 100 countries.
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