Ashish Kacholia Did this Before Union Budget 2024. What's Your Strategy?

The D-day is finally here.

The union budget session of parliament began yesterday on 31 January 2024 and the economic survey was presented.

Now, all eyes are on finance minister Nirmala Sitharaman who will present the Union Budget soon.

The budget speech is an important annual event but this budget will be an interim one due to the general elections to be held in a couple of months.

This explains the lack of the usual market buzz.

But there's still a lot of interest... so much so that investors are also tracking what the top Indian investors like Ashish Kacholia, Vijay Kedia, and the likes are doing.

Just a day before Union Budget 2024, exchange data reported that Ashish Kacholia sold his stake in a multibagger stock via a block deal.

Before we delve deep into the stock details, let's take a look at who Ashish Kacholia is and what are some of his top stock picks.

Who is Ashish Kacholia?

When we talk about successful investors in India, it's common 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.

Which Multibagger Stock Did Ashish Kacholia Sell?

The stock in question is Venus Pipes.

The company is one of growing stainless-steel pipes and tube manufacturers and exporters in India.

It produces a wide range of products, including stainless steel welded pipes and tubes, stainless steel flanges, and much more.

Earlier this week on 30 January 2024, Kacholia sold 103,000 shares of steel company Venus Pipes & Tubes at an average price of Rs 1,511.68 on the NSE.

The value of the shares sold was Rs 155.7 million and translated to a 0.51% stake in the company.

Kacholia had picked up around a 2% stake in the smallcap company through a bulk deal on 11 April 2023. Back then, he bought four lakh shares or 1.97% stake, for Rs 288 million.

Other prominent shareholders in the company include veteran investor Madhulika Agarwal, who holds a 1.25% stake as of December 2023.

While we don't know why exactly Ashish Kacholia offloaded partial holding, one possible reason could be profit booking.

Back in April 2023, the purchase deal was executed at a weighted average price of Rs 720 a share, so Kacholia is sitting on multibagger gains in less than a year.

Venus Pipes recently reported its Q3 earnings where net revenue rose by 52% while profit more than doubled to Rs 230 million from Rs 110 million.

In its earnings call, the company had said that steel demand in India is on the rise and the pipes and tubes industry is benefiting from the capex cycle and new infrastructure projects.

The company has already increased its capacity by 3X to meet this demand and it also set up a piercing line for backward integration of seamless pipe.

The company enjoys location benefit as its main operations are located near Kandla and Mundra ports.

It also enjoys support from the government as the centre has imposed anti-dumping duty on stainless steel seamless tubes and pipes imported from China up to 2027 to prevent harm to the domestic industry.

In addition to this, import substitution will also aid the company in capturing the market share of unorganised players.

How Venus Pipes Share Price has Performed Recently

In the past five days, Venus Pipes share price has moved up by 4%.

After Kacholia sold partial stake, the stock saw a downtrend in yesterday's session and today again the stock is down 1%.

Venus Pipes has a 52-week high of Rs 1,580 touched on 30 January 2024 and a 52-week low of Rs 679 touched on 11 April 2023.

In the past one year, the stock price has moved up by 101%.

Here's a table comparing Venus Pipes with its peers -

Comparative Analysis

Company	Venus Pipes	Mahamaya Steels	Incredible Ind	Bedmutha Ind
ROE (%)	19.6	3.3	4.1	13.4
ROCE (%)	22.9	5.4	7.6	13.1
Latest EPS (Rs)	36.6	2.4	1.3	5.1
TTM PE (x)	39.8	57.7	34.2	60.1
TTM Price to book (x)	7.7	1.7	1.6	9.2
Dividend yield (%)	0.1	0.0	0.0	0.0
Industry PE	24.8
Industry PB	2.2

Data Source: Ace Equity

What's Your Budget 2024 Strategy?

In an interim budget, Indian governments have historically, not made major capital allocation decisions. But there is always space for certain exceptions.

Will we see something to that extent this time? For example, will India's startups get a dedicated fund to boost their prospects?

Will there be announcements concerning say, cryptos? What about the capital gains tax? Income tax slabs? Affordable housing? EVs?

We will have to wait and watch.

One thing is for sure. Equitymaster will cover the budget in detail.

Watch this space as we cover the budget announcements later in the day.

Happy Investing!

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...