Bulk Deal Alert: Sumeet Nagar Dumps 5 Lakh Shares of this Small-cap Stock. Ashish Kacholia, Vijay Kedia Stay Put

Yesterday, we wrote about two investing gurus buying fresh stakes in as many as 5 stocks in the March 2023 quarter. In case you haven't checked them out, you can do it here and here.

Well-known investors have been on a buying spree, making the most of the dip at the start of the year.

Prominent names Vijay Kedia, Ashish Kacholia and Dolly Khanna rejigged their portfolio by taking fresh bets in stocks while also doubling down on their investments.

Another prominent name in the Indian investing community - Sumeet Nagar - recently bought stake in a multibagger chemical stock.

What about selling activity?

In this quarter, there's not much selling activity by these investing gurus as they know the momentum is strong. Indian markets have staged a good comeback in the past three weeks.

However, it was yesterday reported that Sumeet Nagar's Malabar India fund sold 512,000 shares of a small-cap company via a bulk deal.

Interestingly, Vijay Kedia and Ashish Kacholia hold prominent stakes in the company under question as of March 2023.

But more on that later...

Who is Sumeet Nagar?

Sumeet Nagar is the co-founder of Malabar Ventures LLC. Malabar is a foreign portfolio investor (FPI) with a particular emphasis on India's small and mid-cap stocks.

His amazing track record in the smallcap and midcap space is no fluke.

He has a solid decision-making process on which stocks to buy, how much to buy, and, equally importantly, when to sell.

Which Small-cap Stock did Sumeet Nagar Sell? And Why?

The company in question is printing and publication firm Repro India.

Data available on the exchanges shows that Sumeet Nagar's Malabar India fund sold 512,000 shares of Repro India via a bulk deal on 15 May 2023.

As of March 2023, Sumeet Nagar held 580,142 shares of Repro India, resulting in a 4.56% stake in the company.

In the June 2023 filings, his name will be missing from the shareholders list as he has sold almost the entire stake in the company.

While we don't know the reasons why Sumeet Nagar turned bearish on the smallcap firm, there are some reasons we can guess...

The first reason could be profit booking.

Yesterday, share price of Repro India spiked 20%. This, on the back of the company posting superb quarterly results.

Just have a look at the table below to see the growth on a sequential as well as year on year basis.

Repro India Quarterly Results

Rs m, consolidated	Mar-23	Mar-22	Dec-22	YoY (%)	QoQ (%)
Net Sales	1,210.5	937.3	1,050.9	29%	15%
Operating Profit	141.3	40.7	118.6	247%	19%
Net Profit	50.6	-46.8	30.7	-	65%

Data Source: Ace Equity

Clearly, the March 2023 numbers are off the charts.

The company's margins improved on account of stable gross margins, and higher sales growth.

Even if we take a look at its FY23 performance, its consolidated revenue came in at Rs 4.2 billion (bn), a growth of 47%.

The company also turned profitable in FY23.

In the latest investor presentation, the company said its digital biz vertical saw a growth of 52% and all key indicators showed healthy YoY growth.

So one reason could be profit booking...many are often temped by a sharp rise in a single day and the 20% rise justifies Sumeet Nagar's stance.

Also, Sumeet Nagar's Malabar fund has been reducing its stake in the smallcap firm for the past couple of quarters. Have a look at this table.

Malabar India Fund Holding in Repro India

Quarter Ended	No of shares	Equity (%)
Mar-23	580,142	4.56%
Dec-22	580,142	4.56%
Sep-22	580,142	4.56%
Jun-22	747,222	5.88%
Mar-22	747,222	5.88%
Dec-21	747,222	5.88%
Sep-21	747,715	6.19%
Jun-21	859,258	7.11%
Mar-21	859,258	7.11%
Dec-20	859,258	7.11%
Sep-20	859,258	7.11%
Jun-20	859,258	7.11%
Mar-20	859,258	7.11%
Dec-19	859,258	7.11%
Sep-19	859,258	7.11%
Jun-19	859,258	7.11%

Data Source: BSE

Interestingly, Ashish Kacholia and Vijay Kedia also hold stakes in the company. As of March 2023, Vijay Kedia has a 6.79% stake or 906,491 shares in total. While Kacholia holds 3.45% or 460,528 shares.

Although Sumeet Nagar decided to book profits and exit the counter (not entirely), there are also few things that are currently in Repro India's favor.

The company has long-term relationships with many reputable clients. It exports to leading global publishers like Cambridge University Press, Longman, etc.

In India too, the company works for large education publishers including Macmillan Publishers, Oxford University Press, Jeevandeep Prakashan, Symbiosis, Arihant Publication, etc.

The financial year 2020-21 was quite harsh on the print media industry. However, this sector is all set to regain its glory.

According to a CRISIL report, the print media sector in India could grow by 20% in 2022-23. This is due to recovery in its two major income sources, advertisement and subscription.

There is a growing shift in reading preference toward digital media. This has lowered the level of newspaper subscriptions. However, the print media sector is expected to grow in the coming years.

How Shares of Repro India have Performed Recently

Yesterday, Repro India shares spiked 20% and closed at Rs 500. Today, the stock again staged a gap-up opening and gained 15% intraday to hit a new 52-week high of Rs 570.

Repro India share price has increased 48% in the past 1 month. In the past 5 days, the stock has rallied 35%.

And in the past one year, shares of Repro India have risen around 45%.

It has a 52-week low of Rs 338 touched this year in March 2023.

Have a look at the table below to compare Repro India with its peers.

Comparative Analysis

Company	Repro	S Chand	Sandesh	MPS	Jagran Prakashan
ROE (%)	3.3	0.9	9.8	23.3	10.5
ROCE (%)	6.4	3.2	12.9	31.9	13.4
Latest EPS (Rs)	6.6	25.6	157.9	57.9	10.6
TTM PE (x)	75.9	8.1	5.9	15.6	6.8
TTM Price to book (x)	2.3	0.9	0.7	3.9	0.8
Dividend yield (%)	0.0	0.0	0.5	3.3	0.0
Industry PE	18.3
Industry PB	1.1

Data Source: Ace Equity, Equitymaster

About Repro India

Repro India was established in 1990. It is headquartered in Mumbai, India.

It offers printing services in India and internationally. It publishes magazines and other periodicals, books and brochures, maps, posters, and other materials.

It has a presence spanning four continents from Asia and Africa to the United States and the United Kingdom since 30 years.

Repro has plants in Surat, Navi Mumbai, Bhiwandi, and Chennai. It produces millions of books per year.

For more details, see the Repro India company fact sheet and quarterly results.

You can also compare Repro India with its peers:

Repro India vs Diligent Media

Repro India vs Navneet Education

Since small-cap stocks interest you, here's a proven approach on investing in small-cap stocks.

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