Mukul Agrawal's Top 5 Stock Picks in Q4

Everyone in the stock market chases the dream. Big names like Radhakishan Damani, Rakesh Jhunjhunwala, and Mukul Agrawal inspire investors with their wealth creation.

This is built on finding those incredible multibagger stocks - investments that soar in value, multiplying by 5x, 10x, or 20x.

In the stock market, just as in any other aspect of your life where you invest your efforts, patience, money, and other resources, being able to recognise these stocks or other products is essential.

The ability to spot these gems is the holy grail of investing. Nevertheless, not everyone has this ability. Therefore, people tend to emulate successful people's behaviour.

For those following the footsteps of seasoned investor Mukul Agarwal, here's a glimpse into his top 5 picks from Q4.

#1 PTC Industries

First on the list is PTC Industries.

PTC Industries previously known as Precision Tools & Castings manufactures industrial castings of various grades of steel / stainless steel and super alloys.

It is engaged in the manufacturing of aerospace castings, industrial castings, and titanium and vacuum melt alloy castings.

Mukul Agrawal added exposure to PTC Industries by 1.2% in the March 2024 quarter, holding 167,000 shares valued at Rs 1.3 bn as of 24 April 2024. This move can be attributed to a recent partnership milestone.

The company on 9 February 2024 signed a memorandum of understanding with Hindustan Aeronautics Limited (HAL) to jointly work on raw materials, components and spares for aircraft and helicopters, in a push for self-reliance.

The two sides will share expertise and capabilities in the aerospace sector, with a focus on indigenising spares, components, shop-replaceable units (SRUs), and shop-replaceable units.

PTC Industries and the accessories division of HAL, a defence ministry undertaking, will collaborate on adapting aviation-grade raw materials (titanium and nickel base super alloys, special steels), components, spares, sub-assemblies, and LRUs.

The goal is to make India self reliant in the sector.

It's expanding its aerospace casting capabilities with a significant investment in a new manufacturing facility in Lucknow. This facility will produce aerospace-grade titanium and superalloy ingots, billets, bars, plates, and sheets.

Besides Mukul Agrawal, investor Ashish Kacholia also holds shares in the company.

In January 2024, the company approved a proposal to raise funds through a preferential issue of fully paid-up equity shares, aiming to garner up to Rs 1,412.4 million (m). This includes the allocation of 100,000 shares to Ashish Kacholia.

Looking ahead, PTC Industries plans to further expand its capacity to meet growing demand.

For more details, see the PTC Industries company fact sheet and quarterly results.

#2 Oriental Rail Infrastructure

Second on the list is Oriental Rail Infrastructure.

Oriental Rail Infrastructure specialises in the manufacturing, procurement and distribution of various products, including recron, seat and berth components, lavatory doors, and compreg boards within the rail infrastructure sector.

The latest shareholding pattern of Oriental Rail Infrastructure shows that Agrawal holds a 5.5% stake in the company as of the March 2024 quarter.

As of yesterday's closing (10 April 2024), his holding of 3.4 million (m) shares is valued at Rs 972 m.

This stake acquisition follows Oriental Rail Infrastructure's announcement on 22 February 2024 regarding the approval of the allotment of equity shares and warrants convertible into equity shares.

Agrawal participated in this allotment, acquiring 3.4 m shares at the price of Rs 169 per share.

One of the key reasons behind the ace investor's stake acquisition in Oriental Rail Infrastructure could be the series of significant contract wins and order expansions that the company secured in recent months.

On 13 March 2024, Oriental Rail Infrastructure's subsidiary, Orient Foundry Pvt., renegotiated a contract with Indian Railways, increasing its value to Rs 12.5 bn.

Before this, on 26 February 2024, the company clinched an order worth Rs 127.9 million (m) from Indian Railways for the manufacturing and supply of 208 sets of 'Seat and Berths' for LWACCN coaches.

Notably, in December 2023, Oriental Rail Infrastructure secured a landmark order from Indian Railways through its wholly-owned subsidiary, Oriental Foundry Private Limited.

Going forward, the company is set to benefit from Prime Minister Narendra Modi's foundation stone for over 2,000 railway infrastructure projects valued at approximately Rs 410 billion (bn).

For more details, see the Oriental Rail Infrastructure company fact sheet and quarterly results.

#3 West Coast Paper Mills

Third on the list is West Coast Paper Mills.

The company is one of the oldest and largest producers of paper for printing, writing, and packaging in India.

In the March 2024 quarter, esteemed investor Mukul Agrawal added exposure to West Coast Paper by 1.7%, holding 1.1 million shares valued at Rs 692 million as of 24 April 2024.

This strategic move aligns with significant developments within the company.

West Coast Optilinks (WCO), a subsidiary of West Coast Paper Mills, has doubled its manufacturing capacity for optical fibre cable with the establishment of a new manufacturing unit at Fab City, Hyderabad, Telangana.

This newly commissioned plant commenced commercial production on 14 February, ahead of the initially projected timeline of 1 April 2024. The Telangana facility marks the company's second unit after Mysore.

Additionally, the bullish stance of Foreign Institutional Investors (FIIs) since the September 2022 quarter, consistently increasing their stake in the company, adds further impetus to Agrawal's decision to bolster his investment.

Looking ahead, West Coast Paper Mills aims to prioritise profitability and pursue strategies aimed at enhancing it.

For more details, see the West Coast Paper Mills company fact sheet and quarterly results.

#4 Quick Heal Technologies

Fourth on the list is Quick Heal Technologies.

Established in 1995, the company has evolved into a 360-degree cyber security solutions provider in India.

With its flagship products, such as Quick Heal and Seqrite, it has over 30% market share in India and a global presence in over 47 countries.

The company offers a range of services across data encryption, data loss prevention, endpoint security, network security, enterprise mobility management, and server protection.

According to data available on exchanges, Mukul Agrawal added 1.3% exposure to the stock in the March 2024 quarter.

As of the latest closing on 24 April 2024, his holding comprises 700,000 shares valued at Rs 356 m.

This strategic move was likely driven by robust performance in Q3.

During the December 2023 quarter, Quick Heal Technologies witnessed a remarkable 22.6% increase in its topline, with profits amounting to Rs 100.6 m.

This marked a significant turnaround from the previous fiscal year when the company had declared a loss of Rs 92.9 m during the same period.

Moreover, the company's appeal was strengthened by Foreign Institutional Investors (FIIs) increasing their stake in the December 2023 quarter, following three consecutive quarters of net selling.

Additionally, Quick Heal Technologies recently joined the US Artificial Intelligence Safety Institute Consortium (AISIC), comprising over 200 leading companies and organisations in AI development and usage.

Looking ahead, Quick Heal plans to maintain its focus on research and development to enhance its existing cybersecurity solutions and innovate new products to tackle emerging threats in the digital landscape.

For more details, see the Quick Heal Technologies company fact sheet and quarterly results.

#5 Hind Rectifiers

Last on the list is Hind rectifiers.

Hind Rectifiers also known as Hirect is a leading manufacturer of rectifier equipment and semi-conductor devices.

It also manufacturer's a wide range of products used for railways, AC electric locomotives, and AC electrical multiple units.

According to data available on exchanges, Mukul Agrawal added 1.2% stake in the stock in the March 2024 quarter.

As of the latest closing on 24 April 2024, his holding comprises 213,026 shares valued at Rs 162 million (m). This decision stemmed from the company's recent contract win.

On 27 February 2024, the company secured a significant supply order from Indian Railways, valued at over Rs 2 billion (bn) for FY24-25, with execution expected in FY25.

This substantial addition boosts the company's total order book to Rs 5.7 bn. Forecasts suggest closing the current financial year with revenues of Rs 5 bn.

Operational enhancements are anticipated to drive margin expansion into double digits.

Regarding infrastructure, the company's current and upcoming product portfolio indicates adequate space for operations for at least the next two to three years.

In the December 2023 quarter, the company reported a revenue from operations of Rs 1.4 bn, marking an increase from Rs 972.3 m the previous year.

However, net profit for the quarter declined to Rs 152 m from Rs 240 m year-on-year.

Looking ahead, the company targets a 20% revenue growth for the next year, supported by the execution of new orders.

For more details, see the Hind Rectifiers company fact sheet and quarterly results.

To Conclude

While this approach might seem appealing, it has several potential drawbacks.

A replicating investor may end up buying a stock at a much higher price than the successful investor, as the latter may have bought the stock much earlier when it was undervalued.

Also, their risk tolerance level, size of investment and investment horizon is often quite different from that of a retail investor.

They may be able to take bigger risks and hold on to investments for a longer period of time.

Hence, blindly following their moves without considering one's own risk profile and investment goals can be risky.

While it might be tempting to follow the investment moves of successful investors, it is crucial to conduct thorough research and analysis before making any investment decision.

Investors should focus on investing in fundamentally strong companies that align with their individual goals and risk tolerance level, rather than blindly following these gurus.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...