On 2015 June 29th, Porinju Veliyath - Founder and CEO of Kochi-based Equity Intelligence, had an interview with CNBC-TV18's Latha Venkatesh and Reema Tendulkar. In the last few years his picks are giving exorbitant returns. Equity Intelligence whose Portfolio Management Scheme returned 71.69 percent in fiscal year 2015 compared to 26.66 percent gain for the Nifty. He also stated that over the past 12 years, Equity Intelligence has earned mind blowing gains of 32.9 percent CAGR. If you had kept 1 lakh with Porinju in 2003, it would have been become a whooping 30 lakhs by this time!!.
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| Porinju Veliyath |
Below are the main takeaways from the interview.
1. Look into real estate companies, one that have largely been ignored by the market since their debt-induced bust in 2008. Real estate companies are cheap. They have paid the price for overleveraging. But now a lot of managements are being forced to making changes, cleaning up their balance sheets, bring on more professionalism,". His pick in this area is Anant Raj. it is priced at around Rs 1,000 crore of marketcap. Maybe it has some Rs 1,000 crore of debt. It's enterprise value is at Rs 2,000 crore. But what they own in today’s not-so-good market conditions could be anything between Rs 10,000 crore to Rs 20,000 crore - and they are not the bad kind of management. So the potential of creating wealth is there.
2. Look at branded names who are coming out from their worst period. His pick in this area is Bombay Dyeing, which could be a turnaround story. It has great wealth in Mumbai. They have hugely-priced real estate. They are developing a lot of it and cash flow is coming. Recently they sold a manufacturing unit for some Rs 230 crore and they are reducing debt. If they do it further, they will have much more assets to be sold and the brand Bombay Dyeing is very big. Everybody in the country is aware of it. It is very easy to revive it. If they focus on the brand and retailing, sell the manufacturing and outsource the products, along with the cash flow coming from real estate, it could have much higher than today’s enterprise value.
3. Look at small FMCG players. His pick in this area is Future Consumer Enterprise which is is not a well-known company. This company is targeting 1 lakh crore kind of turnover and 4,000 outlets. He mentioned that it is not a foolproof value investment idea and we should monitor the company’s developments. His point is, when you buy a stock, you cannot be sure that this is going to be a 10-bagger or a 5-bagger. It happens over a period of time, it evolves after investing.
Where they stands now??
Anant Raj is currently trading @ 37
Bombay Dyeing is currently trading @ 70
Future Consumer is currently trading @ 13.5
Lets wait and see where these stocks stand in another 1 year!!!
Future Consumer is currently trading @ 13.5
Lets wait and see where these stocks stand in another 1 year!!!
accurate tracking of his stock pics..
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