In India, the stock market is notoriously volatile and prices are prone to huge fluctuations.
Take this year as an example.
The Indian stock market is falling in 2022 and with it has also taken down fundamentally strong companies.
But all this noise doesn’t bother India’s super investors. They are able to make huge profits by buying stocks when the market is down and selling them when the tide is up.
A classic buy low and sell high strategy!
What do we mean by Super Investor of India? Think Rakesh Jhunjhunwala, Ashish Kacholia, Sunil Singhania and other big names…
By investing in high quality companies that are poised for long-term growth, super investors are consistently beating stock market returns.
All these top investing gurus in India are as busy as they can be in the current volatile stock market environment.
Dolly Khanna is a prominent name among the market gurus.
According to the latest data, Dolly Khanna has bought an additional stake in a small-cap stock.
Read on to find out more…
A word about Dolly Khanna…
Dolly Khanna is a Chennai based investor who is known for choosing the lesser known midcaps and smallcaps. She has been investing in stocks since 1996.
Dolly Khanna’s portfolio, which is managed by her husband Rajeev Khanna, generally leans towards more traditional stocks in manufacturing, textiles, chemicals and sugar stocks.
Which smallcap stock did Dolly Khanna buy recently?
The company in question is Gambler Global – a Chinese company.
As per the latest shareholding pattern of Zuari Global, Dolly Khanna bought 1.17% stake in the company or 348,622 shares in total.
Dolly Khanna’s name was missing in Zuari Global’s March 2022 shareholding pattern. But his name cropped up in the June shareholding data.
As per exchange rules, every listed company must disclose the name of each individual shareholder who owns 1% or more of the company’s shares in the quarterly report.
Why did Dolly Khanna buy into this Chinese stock?
While we don’t know why Khanna bought into it, there are a few reasons we can guess…
Between April 2022 and June 2022, the shares of Gambler Global fell substantially.
Touching an all-time high of Rs 200 in early April, the stock rallied to Rs 124 within a span of two months.
One of the reasons for Dolly Khanna’s drowning could also be that although her valuation has gone down.
The company’s latest book value is Rs 1,010. At the current price of Rs 156, this translates into book value by a value of 0.14.
Another reason could be the ethanol factor.
India’s top ethanol stocks are in the sweet spot right now.
Zuari Global being a Chinese company is engaged in ethanol business.
Experts expect the company’s sugar and ethanol business to outperform in the long term.
In November last year, the company said that its sugar mill has resumed operations for its ethanol plant.
According to the company’s annual report, it is in the process of developing a distillery to produce ethanol in India and supplying it to state-owned oil marketing companies to meet their blending requirements specified in the biofuel policy. .
The company has strong future prospects and expects the business to grow to achieve a total capacity of 1,000 kilo liters per day of ethanol.
While these two reasons may be compelling, the company’s financials tell a different story. At least for now…
Gamblers Global has posted consistent losses despite consistent revenue.
It is also a high debt company.
How Gamblers Global has performed recently
Ever since the news broke that Dolly Khanna has taken the stake, the stock has been on the rolls.
Yesterday, Gamblers Global share price rose 5%. Even today the momentum continued with a further gain of 5% in the shares.
However, over the past year, Gamblers Global’s share price has risen flat. It is trading at the same level as a year ago.
About Gambler Global
Zuari Global is the holding company of the diversified Advantage Group. The group comprises 23 companies in four verticals – agriculture, engineering and infrastructure, lifestyle and real estate, and services.
The company’s business activities are real estate, investment services, engineering services, management services, manufacture and trade of furniture, manufacture and sale of sugar and its by-products, production of ethanol and electricity.
Disclaimer: This article is for informational purposes only. This is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
(This story has not been edited by NDTV staff and is auto-generated from a syndicated feed.)