Sumeet Nagar’s Malabar India Fund Invests in a Chemical Stock that has Rallied 450% in 3 Years
- The latest shareholding pattern of this company shows that Malabar India fund picked up a substantial stake in the March 2023 quarter.
As the earnings season gets underway, companies have also started to report their shareholding pattern for the March 2023 quarter.
Among these companies is a chemical firm. The latest shareholding filing of this company revealed that ace investor Sumeet Nagar’s fund - Malabar India Fund Limited - has increased stake in the company during the quarter under review.
This stock is now a big part of Sumeet Nagar’s portfolio.
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 whichstocks to buy, how much to buy, and, equally importantly, when to sell.
The Latest Addition
The company in question is from the smallcap space with a marketcap of ₹11.2 billion (bn) – Ganesh Benzoplast.
The latest shareholding pattern of Ganesh Benzoplast shows that Malabar India fund bought stake in the quarter under review. The fund now holds 2.71% stake in the company as of March 2023, worth ₹300 million (m).
While we can't know for sure why the star investor bought into the counter, there are some reasons that we can guess...
First reason being the company’s focus on multiple emerging trends. In the past couple of years, the company has forayed into the EPC business through its subsidiary GBL Infra Engineering Services.
It also has exposure to the ethanol sector. The company incorporated a 100% subsidiary - GBL Clean Energy Private Limited for dealing in clean energy fuels viz. ethanol, bioethanol, butanol, bioalcohol, methanol and other clean energy and biodiesel fuels.
The second reason could be the location advantage that the company gets. Ganesh Benzoplast operates three Liquid Storage Terminal (LST) facilities in India, which are located in Goa, Cochin, and Jawaharlal Nehru Port Trust (JNPT) in Mumbai.
JNPT is the largest handling port in India, accounting for approximately 55% of the country's containerized cargo, while Cochin and Goa are also significant ports in India, providing a steady stream of business for the company.
The company already has a long-term contract with a leading chemical manufacturer for its upcoming new storage capacity at JNPT terminal.
Coming to financials…
For the nine months ended December 2022, Ganesh Benzoplast has achieved 9% YoY increase in revenue and a 67% increase in net profit.
The company doesn’t have any big capex planned before 2025, apart from the ongoing capex worth ₹4 bn.
In the past five years, the company has doubled its revenue while profit has come down substantially. For FY23, the company is set to report 25-30% growth in its bottomline.
How Ganesh Benzoplast shares have performed on the bourses
In 2023 so far, Ganesh Benzoplast share price is up 22%.
In the past three years, shares of the company have surged over 450%.
Ganesh Benzoplast has a 52-week high of ₹179 touched on 9 March 2023 and a 52-week low of ₹99 touched on 11 May 2022.
Have a look at the comparative analysis table below to see how it fares against peers:
About Ganesh Benzoplast
Ganesh Benzoplast is an independent Liquid Storage Tank (LST) provider and is a manufacturer & exporter of food preservatives, lubricant additives & specialty chemicals since 1986.
The company has built strong relationship with reputed clients such as Asian Paints, BPCL, Jubilant Life Sciences, and Lasons India Pvt Ltd.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
