Vijay Kedia Sells Stake in 3 Stocks, Including a Tata Group Company. More Details Here...

Most of us have one broad goal: to earn multibagger returns by investing in the stock market.

However, the ways to earn these returns are different. Some investors find their destination by following the route of value investing while others find their way through growth investing.

Many also choose to invest in fundamentally strong stocks while others choose to invest in momentum stocks by following technically charts and patterns.

One other strategy which many investors follow is tracking what the big names in the stock market are buying and selling.

By following their buying and selling activities, investors get an idea of how the markets or a particular sector is expected to perform in the near term.

In this article, we take a look at three stocks which Vijay Kedia recent sold.

Who is Vijay Kedia?

Vijay Kishanlal Kedia is an Indian investor and trader based out of Mumbai and his company - Kedia Securities is the largest shareholder (after the promoter) in several listed companies.

Kedia has been involved in the Indian stock market since the age of 19. He has been described by many as a 'market master'.

To point out a few of his investments, he bought ACC at Rs 300 in 1992-93 and sold the stock around Rs 3,000 within a year and a half.

During years 2004 and 2005, he picked several multibagger stocks which gave returns of over 1,000% in the next 10-12 years. Few of these stocks were Atul Auto, Aegis Logistics, and Cera Sanitary.

To know more about Vijay Kedia and his investment strategies tune in to the video below:

In the most recent December 2022 quarter, the Vijay Kedia portfolio saw a partial divestment from these three companies:

#1 Talbros Automotive Components

Talbros Automotive Components is engaged in the business of manufacturing gaskets and forging that are supplied to original equipment manufacturers (OEMs) and the aftermarket.

The company has a majority share of over 50% in India in the gaskets division. It has aggressively invested in BS VI technology and is also focusing on post-coating lines which leads to lower imports and higher cost savings.

The September 2022 shareholding pattern of Talbros Automotive Components shows that his stake in the company stood at 2.3%. In the quarter ended December 2022, he reduced his stake to 1.3%.

He now holds 1.6 lakh shares as of December 2022.

While we don't know why Kedia sold shares of Talbros Automotive Components in the quarter under review, there are some reasons we can guess...

If we take a look at the quarterly results of Talbros Automotive Components you'll notice that while revenues of the company have seen a gradual rise along with profits, the profit margins have come under pressure.

The net profit margin of the company is on a decline for the last two quarters.

Extract of Quarterly Results of Talbros Automotive Components

Quarter Ending	Dec-21	Mar-22	Jun-22	Sep-22
Total revenue (Rs in m)	1,484	1,480	1,530	1,607
Total expenses (Rs in m)	1,296	1,271	1,339	1,400
Gross profit (Rs in m)	187	210	190	207
Net profit (Rs in m)	126	143	129	134
Gross profit margin (%)	12.6	14.2	12.4	12.9
Net profit margin (%)	6.4	6.8	6.3	6.2

Data Source: Ace Equity

The rise in income has been washed off by a rise in expenses. This is because input costs have increased in recent months, at an alarming pace.

In fact, this battle is not yet over for Talbros. Cost inflation continues to be a key headwind for the industry. While there has been little cost control on the cost of input materials, commodity and freight costs are still higher than the costs before the pandemic period.

However, Talbros has adopted consolidation of delivery and optimization of routes to the extent possible to reduce freight expenses.

Meanwhile, margins of auto ancillary companies may improve going forward because of increased usage of power from renewable sources, factoring arrangements to reduce working capital requirements and other measures like improvement in output per employee through automation.

Over the last one month, the share price of Talbros Automotive Components is down 2%.

In the past three years, the stock has given multibagger returns of 235%.

The company touched its 52-week high of Rs 654.9 on 18 January 2022 and its 52-week low of Rs 378.2 on 20 June 2022.

#2 Tejas Networks

Next company in which Kedia reduced stake is among the 5G stocks in India.

Tejas Networks is among the earliest telecom product companies that have built homegrown technology products in networking and optical backhaul crucial for high-speed broadband.

It was incorporated in the year 2000. The company designs and manufactures optical transmission products, which find application in cellular backhaul, high-speed broadband, and backbone network of telecom service providers for transportation of data and voice over optical fibre.

The company's products are also used in defense communication networks and by utility companies.

The shareholding pattern of Tejas Networks shows that as of September 2022, Kedia's stake in the company stood at 2.7%. In the quarter that ended in December 2022, he reduced his stake to 2.3%.

He now holds 35 lakh shares as of December 2022.

Vijay Kedia's shareholding in the company has remained stable during the last two quarters. During that period i.e. from July 2022 to December 2022 quarter, the share price rose by around 29%.

Ever since the 5G spectrum auctions concluded, the share price of Tejas Networks has been on an uptrend.

In its annual report for 2021-22, the company highlighted that post the 5G spectrum auctions, the company is planning a multi-year capex cycle to build both wireline and wireless infrastructure.

With strong backing from the Tata group and the huge opportunities in the 5G space, the stage is set for Tejas Networks.

Earlier in October 2022, the company successfully demonstrated a 4G/5G network and applications on an end-to-end indigenous network, using its own hardware and software.

Considering the above factor Tejas Networks' share price rallied and it seems like Vijay Kedia decided to book partial profits in the company.

Over the last one month, the share price of Tejas Networks has fallen 11%.

In the past three years, the stock has turned out to be a true multibagger stock, giving returns of 508%.

The company touched its 52-week high of Rs 773 on 10 October 2022 and its 52-week low of Rs 359.5 on 08 March 2022.

#3 Lykis

The last stock on this list is Lykis.

Lykis is an India-based home and personal care company. The company's segments include Tea and FMCG.

Its personal care products include hair care, deodorants, perfumes, skincare, and baby care product.

The latest shareholding pattern of Lykis shows that Vijay Kedia offloaded his stake in the FMCG company during the September-December 2022 quarter.

As of September 2022, his stake in the company stood at 2.7%. In the quarter that ended December 2022, his name did not appear in the list of shareholders holding more than 1% stake.

This implies he has either sold all his stake or a partial stake from Lykis. Shareholders who hold above 1% stake in a company are made to file their statements.

Again, we can guess that Kedia might have sold stake in the company to book some profits and take exposure to other stocks.

In the past six months, Lykis share price has gained 56%. Owing to the overall positive market sentiment for FMCG stocks, Lykis share price also rallied.

The best FMCG stocks were on the rise owing to a number of factors including globally coordinated efforts to tame inflation, price hikes taken by FMCG companies and most importantly due to the festive season.

As a result, Lykis reported robust quarterly figures for the quarter ended September 2022.

Over the last one month, the share price of Lykis is down 9%.

In the past three years, the stock has rallied 124%.

The company touched its 52-week high of Rs 58 on 03 November 2022 and its 52-week low of Rs 22.9 on 20 June 2022.

Investment Takeaway

When we talk about tracking the buying and selling activities of ace investors, we have to keep in mind that their risk tolerance level, size of investment and investment horizon is often quite larger than that of a retail investor.

Hence, blindly following their moves might be risky.

An investor has to carefully study the fundamentals of the stock in question before making any investment decision. Investing in a fundamentally strong company should be the ultimate focus of investors.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...