Ashish Kacholia's Latest Portfolio Rejig: What's new?

Every stock market investor desires to build wealth like the richest investors in India.

These investors have distinguished themselves by achieving remarkable success in the industry.

They have emerged as role models with their investment strategies, philosophies, and approaches to risk management.

While plenty of financial literature exists on when to make these moves, finding the best strategy remains a challenge.

To sidestep the hassle of developing their winning strategy and to mimic the achievements of their beloved market gurus, many individuals choose to replicate their investment moves.

This saves time and uncovers promising stocks without the need for extensive research.

One such esteemed investor whose every move garners attention is Ashish Kacholia.

In the March 2024 quarter, he was actively repositioning his portfolio by reducing stakes in three stocks while increasing exposure in another.

Who is Ashish Kacholia?

When we talk about successful investors in India, it's common to mention Ashish Kacholia.

Kacholia is known for identifying the best multibagger stocks. He is known as the 'Big Whale' of the Indian stock market.

Over the years, he has picked the best multibagger stocks by looking at the fastest-growing companies from the midcap and smallcap space.

He started his career with Prime Securities in 1993. In 2003, he started Hungama Digital Entertainment Company along with Rakesh Jhunjhunwala. He is also the proprietor of Lucky Securities.

Which Stocks did Ashish Kacholia cut Down on and why?

#1 ADF Foods

First on the list is ADF Foods.

According to the data available on the exchanges, Kacholia's stake in the company dropped below 1% recently. In the December 2023 quarter, the investor held a 1.2% stake in ADF Foods with 1.3 m shares.

This means perhaps his holding might have slipped below 1% or he could have sold the entire stake in the quarter gone by.

It is a leading manufacturer of prepared ethnic food, offering frozen foods, ready-to-eat (RTE) items, ready-to-cook (RTC) items, chutneys, sauces, pickles, spices, pastes, dips, and milk drinks.

The company has a diversified portfolio of over 400 products which are marketed through eight brands, namely Ashoka, Camel, Truly Indian, Aeroplane, Nate's, PJS Organics, ADF Soul, and Khansaama.

ADF Foods has a strong domestic distribution network and also exports to over 55 countries.

While we do not know the exact reasons why the investing guru decided to sell the stake, there are some explanations.

One possible reason for Kacholia's concerns could be decreasing promoter holding.

In the December 2023 quarter, promoters reduced their stake minorly. In the March 2024 quarter, this further reduced from 36.3 to 36.2.

It's noteworthy that this is not the first occurrence of such a reduction, as promoters have been trimming their stake since the March 2023 quarter.

Quarter ending	Dec-22	Mar-23	Jun-23	Sep-23	Dec-23	Mar-24
Stake (%)	36.6	36.5	36.5	36.3	36.3	36.2

In addition to the promoters, FII's have also decreased their stake in the company, declining from 9.6% to 9.5% in the March 2024 quarter.

This stake reduction could be one of the reasons why the ace investor would have opted to trim the stake.

Another reason can be a weak sectoral outlook.

It is expected to face difficulties in the near term, similar to other FMCG companies, as the overall demand environment remains tough.

Looking ahead, the FMCG sector is anticipated to experience sluggish growth in 2024 until the September quarter.

ADF Foods has set an ambitious target of doubling its revenue every three years, from about Rs 4.5 billion (bn) currently, as it aims to tap into the growing demand for pre-cooked food items across international and domestic markets.

For more details, see the ADF Foods company fact sheet and quarterly results.

#2 Vaibhav Global

Second on the list is Vaibhav Global.

As of March 2023, the shareholding pattern of Vaibhav Global shows that Sunil Singhania has reduced 0.1% the stake in the company.

The ace investor sold 252,000 shares or 0.2% stake in the company, dragging his holding down to 1.2% from 1% in the March 2024 quarter.

The company is involved in the e-retailing of fashion jewellery, accessories, and lifestyle products like watches, hair accessories, and home decor.

It has a unique business model consisting of TV-based and website-based operations that helped the company create a niche for itself in the global retail market.

Through its subsidiaries, Vaibhav Global operates three 24-hour TV channels and e-commerce websites in two of the largest economies of the world - the US and the UK.

The company has its own manufacturing units in India, which cater to almost 70% of its jewellery requirements.

The rest of its jewellery requirements and other products are sourced from its established suppliers based across the world.

One reason why Kacholia would have reduced stake might be due to falling mutual fund holding.

In the December 2023 quarter, mutual funds reduced their stake to 4.9% from 5.3% in the September 2023 quarter. In the March 2024 quarter, this further reduced to 2.2% from 4.9%.

It's noteworthy that this is not the first occurrence of such a reduction, as promoters have been trimming their stake since the September 2022 quarter.

Quarter ending	Jun-22	Sep-22	Dec-22	Mar-23	Jun-23	Sep-23	Dec-23	Mar-24
Stake (%)	6.8	5.7	5.6	5.5	5.5	5.3	4.9	2.2

Going forward, Vaibhav Global is focusing on expanding its digital business, with a target to increase its shares in overall business to 50% by the financial year 2027 from 39% now.

For more details, see the Vaibhav Global company fact sheet and quarterly results.

#3 Safari Industries

Third stock on the list is Safari Industries.

The latest shareholding pattern of Safari Industries (India) shows that Ashish Kacholia trimmed his stake in the company in the March 2024 quarter.

Ashish Kacholia sold a 0.2% stake or 100,000 shares in the quarter under review. He held a 2.1% stake in the company as of December 2023, which has reduced to 1.9% in March 2024.

The company is engaged in the business of manufacturing and trading luggage and luggage accessories under the Safari brand.

The company manufactures its hard luggage using PolyPropylene (PP) and Polycarbonate (PC) at its manufacturing plant located in Halol, Gujarat.

While we don't know why he sold shares of Safari Industries, here are some reasons that we can guess.

The first and most obvious reason is profit booking.

Shares of the company have been on an uptrend in the past couple of months. Over the past one year, the stock has given returns of over 75%. This can be attributed to its recent bonus issue.

Another possible reason for Kacholia's concerns could be decreasing promoter holding.

In the September 2023 quarter, promoters reduced their by 0.3% to 46.9% from 47.2%. In the December 2024 quarter, this further reduced from 46.9% to 46.8%.

Going forward, the company's next leg of growth will be driven by capacity expansion, along with the launch of its premium brand.

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

Which Stocks did Ashish bet on and why?

#1 Brand Concepts

The company in question is Brand Concepts.

According to data available on exchanges, Ashish Kacholia increased his stake in the company by 0.1% to 1.5% from 1.4% held in the December 2023 quarter.

According to bulk deal data on the Bombay Stock Exchange (BSE), Ashish Kacholia bought 100,000 shares of Brand Concepts on 1 December 2023.

Brand Concepts is engaged in the trading of travel gear and small leather goods, handbags, and accessories.

The company works with brands like Tommy Hilfiger, AND, Global Desi & HEAD and also sells its in-house brands Sugarush and The Vertical.

While we don't know why he added exposure to shares of Brand Concepts, there are some reasons that we can guess.

The bullish stance on the stock could be due to the company's robust Q3 numbers.

For the December 2023 quarter, the company reported a 44% YoY rise in revenue at Rs 655 m from Rs 454 m a year back.

While the net profit for the quarter came in at Rs 31 m, up 6.9% from Rs 29 m a year back, on the back of increased sales.

Further, in the year gone by, the company made stellar additions to the team with two new brands - United Colours of Benetton and lightweight contender Aeropostale.

Some experts were concerned about the company's dependence on the Tommy Hilfiger brand, but we could see it already making progress with the above-reputed new additions.

The company's license renewal is also up, and the Tommy Hilfiger brand is expected to be renewed until 2026.

For more details, see the Brand Concepts 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...