In this article, we will get to know the outlook and performance of Vijay Kedia portfolio stock which has delivered multi-bagger returns in just one year.
Before discussing about Vijay Kedia portfolio stock, it is important to know who is he and what is his investment philosophy? Given that his stock has delivered strong returns, should investors enter this stock now? If yes, how much is the upside potential? Has the stock peaked, or is there more upside potential?
Well, Dr. Vijay Kedia, who heads his own financial services firm, is a renowned Indian investor who was born in Kolkata. He has been investing in the stock market since he was aged 19 years.
The key activities of the legendry investor’s firm include making investments in ‘listed’ and ‘unlisted’ space. ‘Listed space’ means making investments in the companies which are listed on India’s stock exchanges.
On the other hand, ‘unlisted’ space means making investments in startups or early-stage companies. Apart from investing in the stocks, his firm also makes investments in real estate.
Now, what is so special about Dr. Kedia’s investment philosophy? Should investors follow the same philosophy?
Dr. Vijay Kedia follows the “SMILE” principle when it comes to investing. This means he invests in the companies which are “Small in size”, “Medium in experience”, “having Large aspiration” and which have “Extra-ordinary market potential.”
His investment portfolio consists of numerous companies and his investments span across numerous industries.
This auto stock of Dr. Kedia has delivered multi-bagger returns in just one year and experts believe that there is some more upside left in this scrip.
Let us now have a look at this Vijay Kedia portfolio stock:
Precision Camshafts Ltd
Since the incorporation in the year 1992, Precision Camshafts Ltd has been categorised as one of the leaders in its market in camshaft manufacturing. It has maintained comprehensive quality management system which is in line with world-class production practices and is focused on constant state of improvement. The company supplies over ~150 varieties of camshafts which are used in passenger vehicles (PVs), tractors, light commercial vehicles (LCVs), etc.
The company has released its 2Q24 financial results, in which it has highlighted its strong financial position and its global manufacturing footprint.
During FY23, the company saw its highest-ever revenue from operations of INR 1,113 Crores, exhibiting a rise of ~21.8%. EBITDA for FY23 came in at INR 117.97 Crores in comparison to INR 107.90 Crores in FY22, which represents a rise of 9.33%.
Its PAT was INR 60.95 Crores in FY23 as against INR 66.07 Crores in FY22, exhibiting a fall of 8%. Talking about the company’s exports, total exports made up for ~55% of FY23’s sales, with the balance constituting domestic sales.
The company remains optimistic, and it continues to take strategic actions to further improve and strengthen its topline and bottom-line.
Since the culture of e-mobility continues to progress in India, the company has its continues focus on developing electric powertrain which is being tailored for sub-four-ton LCVs, aiming strong Indian market. Since more than 2 million LCVs are currently operating in India, and there continues to be annual addition of ~5,00,000 vehicles, the company’s strategic efforts should support it in yielding strong growth and increase its market standing.
India, as a country, is all set to see strong growth moving forward as a result of rise in middle-income consumption and higher youth population. As per industry estimates, Indian Passenger Car Market was pegged at USD 32.70 billion in 2021, and this should grow and touch USD 54.84 billion levels by 2027 end. Experts believe that this industry should be able to compound at ~9% in FY22-27. Electric Vehicle (EV) market size is expected to touch INR 50,000 Crores (USD 7.09 billion) in India by year 2025.
Given the company’s market resources and financial resources, Precision Camshafts Ltd should be able to exploit these huge market opportunities. The company presently operates with 14 plants across 3 different countries, and it caters to over 50 renowned global customers and manufactures more than 15 diverse products for several diverse industries.
The company has diversified customer profile as top 5 customers make up for ~30% of FY 2023 consolidated revenue (while in FY 2022 they made up ~27%). Furthermore, there are clients who are associated with the company for over a decade, which exhibits that the company has strong ability to lock and deliver repeat orders. Some of the critical customers of the company consist of Ford Motors Company, Volkswagen, General Motors, Bosch, etc.
It supplies to several global OEMs and covers the regions like Europe, UK, China, Brazil, Russia, and North America, etc. Together with the company’s camshaft penetration in global market with strong clientele such as Ford, General Motors, etc., Precision Camshafts further expanded geographical presence with the help of acquisitions. The presence across different international markets significantly decreases its exposure to any kind of adverse economic slowdowns in any one geography.
The company is being counted among handful of the global companies focused on manufacturing all 4 types of camshafts, such as cast iron, ductile iron, hybrid, and assembled. Camshaft has been categorised as one of the key elements of engine application when it comes to automobile. The company produces more than 150 variants of camshafts, which are primarily used in passenger vehicles.
The company has ~70% market share for PV camshafts in only the Indian market. As the company progresses and expands its operations, it plans to capture emerging market opportunities in this industry and enter in EVs.
Conclusion
Should investors invest blindly in this Vijay Kedia portfolio stock? Will the stock see the same momentum in 2024 like it saw in 2023? Well, we believe that investors can consider investing in this stock but only after considering their own risk appetite, financial obligations and time horizon.
Stock price of Precision Camshafts Ltd has seen an increase of more than ~100% in just one year as a result of its market presence and healthy financial risk profile.
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