Ace Investor Ashish Kacholia Adds Stake in Finance Firm and Exits IT Stock

Indian stock markets are in a turbulent storm, battered by disappointing results and bearish global cues.

The 30-share BSE benchmark Sensex on 17 January 2024 tanked 1,628 points or 2.2% to settle at 71,500. The broader NSE Nifty plunged 460 points or 2.1% to end at 21,572.

The words bear market strike fear into the hearts of many investors, but these deep market downturns are unavoidable. They also tend to be relatively short, especially compared with the duration of bull markets.

However, investing in such a market requires hard work and skills.

Amid the fear, seasoned players like Warren Buffett, Rakesh Jhunjhunwala, and Ashish Kacholia rise above the noise, offering a beacon of hope.

For investors seeking such news, there is noteworthy stock market news.

According to the latest exchange data released investing guru: Ashish Kacholia acquired a stake in a finance firm and exited a stake in an IT company.

Before we delve deep into the reasons why Kacholia made such a move, let's look at who Ashish Kacholia is and what are some of his top picks...

Who is Ashish Kacholia?

When we talk about successful investors in India, it's impossible not to mention Ashish Kacholia.

Kacholia is known for identifying the best multibagger stocks. He is known as the 'Big Whale' of the Indian stock market.

Over the years, he has picked the best multibagger stocks by looking at the fastest-growing companies from the midcap and smallcap space.

He started his career with Prime Securities in 1993. In 2003, he started Hungama Digital Entertainment Company along with Rakesh Jhunjhunwala. He is also the proprietor of Lucky Securities.

To dwell deep into his portfolio, check out Ashish Kacholia portfolio: top 5 stocks

Which Stock did Ashish Kacholia Add and Why?

The stock in question is SG Finserve.

The company is engaged in the business of investing activities, investment research, investment banking, and wealth management.

The latest shareholding pattern of SG Finserve shows that Ashish Kacholia has added a 1.1% stake in the company, respectively, as of the December 2023 quarter.

Notably, in the September 2023 quarter, his name was missing from the list of shareholders.

Before this, in the June 2023 quarter, he held about 1.1% stake or 0.4million (m) shares.

This means perhaps he had a partial stake already and has now decided to double down, or he could have bought the entire stake in the quarter gone by.

While we don't know the exact reasons why Kacholia added SG Finserve, here are some we can guess.

One of the reasons for Ashish Kacholia's decision to add this stock can be attributed to the blockbuster Q2 result.

For the September 2023 quarter, the company reported a 29x to jump in revenue at Rs 438.7 m, up from Rs 14.5 m in the same quarter last year. Net profit came in at Rs 174.9 m, up 30x from Rs 5.6 m a year ago.

SG Finserve has not only exhibited strength in the current quarter but has also consistently displayed strong financial growth over the years.

Over three years, the company achieved a remarkable compound annual growth rate (CAGR) of 189% in revenue, and the net profit grew by 125.7%.

This impressive growth can be attributed to the company's expansion and customer base growth.

Additionally, for the December 2023 quarter, FIIs have increased their stake. FII holding stood at 0.1% in the September 2023 quarter. It now stands at 0.2%.

Look at the table below.

Quarter ending	Mar-23	23-Jun	23-Sep	23-Dec
Stake (%)	0	0.1	0.1	0.2

Going forward, the Indian finance sector is expected to grow at a compound annual growth rate (CAGR) of 12.7% from 2022 to 2027.

This will create new opportunities for financial services companies to provide products and services to businesses and consumers.

To know more about the company, check out its factsheet and quarterly results.

Which Stock Did Ashish Kacholia Exit and Why?

The stock in question is NIIT.

NIIT is a multinational skills and talent development corporation.

The company was set up in 1981 to help the nascent IT industry overcome its human resource challenges. NIIT offers training and development to individuals, enterprises, and institutions.

As of December 2023, Kacholia's name did not appear among NIIT shareholders (with over 1% stake) for the quarter. He held a 1.9% stake or 2.5 m shares in the September 2023 quarter.

It is difficult to ascertain whether he completely exited the company.

Kacholia entered NIIT in the June 2018 quarter by adding 4.2 m shares or a 2.57% stake in the company.

While we do not know for sure what exactly the reason is for the investing guru to sell this counter, there are some explanations.

One of the reasons can be poor second quarter.For the September 2023 quarter, it reported a revenue of Rs 417 m, down 69.4% YoY from Rs 1.3 bn a year back.

Meanwhile, the net profit for the quarter came in at Rs 102.9 bn, down 43.5% from Rs 182.1 m a year back.

Additionally, during the December 2023 quarter, promoters reduced their holdings in the company from 34.8% to 34.7%.

It's worth noting this isn't the initial instance of such a reduction, as promoters have been gradually reducing their stake in the company since March 2022.

Quarter ending	21-Dec	22-Mar	22-Jun	Sep-22	Dec-22	Mar-23	23-Sep	23-Dec
Stake (%)	35.1	35	34.9	34.9	34.9	34.9	34.8	34.7

This could have influenced Kacholia's choice of trimming his position.

Going forward, NIIT is looking to expand into new areas that have the potential for growth in the future. Notably, the role of AI is particularly intriguing and central to our endeavours.

The strategy involves diversification, with a focus on emerging sectors for talent acquisition.

NIIT Learning Systems was demerged from NIIT on 24 May 2023. The stock value of the combined entity stood at Rs 405 as on 7 August. However, the post demerger share price of NIIT was Rs 92.

For more details, see the NIIT company fact sheet and quarterly results.

To Conclude

While it may be tempting to follow the investment strategies of successful investors, there are important factors to consider.

Replicating their moves without careful consideration may lead to buying stocks at higher prices, as they may have made purchases when the stocks were undervalued.

Additionally, the timing of investments and market conditions play a crucial role in the success of a portfolio, and blindly mimicking someone else's holdings may not consider these contextual factors.

Additionally, the risk tolerance, investment size, and time horizon of successful investors often differ from those of retail investors.

Moreover, the financial landscape is dynamic, and the information available to investing gurus at the time of their decisions may have changed since then.

Blindly following their actions without assessing one's own risk profile and investment goals can be risky.

Therefore, investors need to conduct thorough research and analysis before making investment decisions.

Rather than blindly following gurus, it is advisable to focus on investing in fundamentally strong companies that align with individual goals and risk tolerance levels.

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