Top 5 Stocks Held by Radhakishan Damani. Worth a Look?

In the stock market, there are two ways to learn - the first one is trial and error, while the second one is monitoring what successful investors are doing.

If you want to be a stock market investor and don't know where to start, one of the most important things that you can do is learn from the incredibly successful stock market investors in India, who've already done it before you.

Understanding how the top Investors in India invest, and which stocks they choose, may teach you a lot about the capital market as a whole.

Radhakishan Damani or RK Damani is one of the most successful investors in India. He is also known as the 'Mr. White and White' among the top traders in India.

Damani, founder of DMart, also manages his portfolio through his investment firm, Bright Star Investments.

According to Forbes 2022 Rich List, RK Damani is the 117th richest person on the planet, with a net worth of US$16.5 bn.

The marquee investor publicly holds 14 stocks. He has a well-diversified portfolio and invests in stocks that have the potential to grow in the future but are undervalued.

Let's take a look at these top 5 stocks held by RK Damani as per the publicly available information on the exchanges.

#1 Avenue Supermarts

Avenue Supermarts is an India-based company which owns and operates DMart stores. DMart is a popular supermarket chain that offers customers a range of home and personal products under one roof.

Each DMart store stock home utility products including food, toiletries, beauty products, garments, kitchenware, bed and bath linen, home appliances, and others.

The Indian retail hypermarket, reported 263 stores across 11 states in India in the current financial year 2022. A cumulative growth in the number of stores was observed as compared to the previous financial year.

The famous retail store was founded by Radhakishan Damani in 2002, with its first branch in Powai's Hiranandani Gardens Mumbai.

According to the data available with the BSE, RK Damani holds 34.3% stake in the company. While, his wife, Mrs. Shrikantadevi RK Damani owns 3.28% in the firm.

On 17 February 2020, the founder Radha Krishnan Damani sold 2.28% stake through offer for sale (OFS) to comply with the minimum public shareholding mandate and consequently, the promoter group hold 74.99% stake in the company.

For the December 2022 quarter, the company reported a 22% year on year (YoY) increase in its revenue growth to Rs 92.2 bn. Profit after tax for the quarter grew 24% YoY to Rs 5.5 bn.

However, gross margins declined marginally to 15.4% on account of unfavourable product mix.

Over the last one year, Avenue Supermarts share price is up 30.7%.

For more details about the company, you can have a look at Avenue Supermarts' factsheet and quarterly results on our website

#2 India Cements

The second stock on this list is from the cement sector.

India Cements is a leading cement manufacturing company headquartered in Chennai. The company is headed by former International Cricket Council Chairman N. Srinivasan.

Sankar Cement, Coramandel Cement and Raasi Gold are the brands owned by India Cements.

Interesting fact - The cement manufacturer also owned the Indian Premier League franchise Chennai Super Kings from 2008 to 2014.

According to a regulatory filing on 21 December 2021 Radhakishan Damani, Gopikishan Shivkishan, Damani & family increased their stake in India Cements to 22.76%.

Individually, RK Damani holds 11.34% in the firm.

Since 30 March 2020, they purchased an additional 6.3 m equity shares, or 2.03% stake in India Cements.

Before March 2020 quarter, he held 19.89% shares in the company.

This shows RK Damani has been gradually expanding his shareholding in the cement company since the last two years.

Indian cement industry comprises 130 large cement plants and 365 mini-cement plants. The total installed capacity in the country is estimated at 240 million tons per annum making India the second largest cement producer in the world after china.

The cement company reported 95% drop in its net profit of Rs 33 m in the third quarter of the fiscal 2022 against Rs 620 m in the same quarter a year ago.

Higher prices of coal - a key raw material for cement production - and its reduced availability are causing concerns and necessitating a further increase of cement prices.

For more details about the company, you can have a look at India Cements' factsheet and quarterly results on our website

#3 Mangalam Organics

Third stock on this list is Mangalam Organics.

Mangalam Organics is a chemical manufacturing company. The company is engaged in the manufacturing and selling activities of Camphor, Sodium Acetate and by-products, Terpene Chemicals, Synthetic Resins, and Phenol formaldehyde (PF) resins.

The chemical producer is involved in distribution through its brands, including Mangalam and CamPure.

Its products are also exported to Europe, the United States, African, Middle Eastern, and Southeast Asian countries.

The latest shareholding data, filed by the company on December 2021, showed that Radhakishan Damani still holds 2.17% stake in the smallcap firm.

In July 2020, the ace investor picked 1.86 lakh shares in the company.

For the December 2022 quarter, net profit of the company declined 49.06% to Rs 151.2 m in the quarter ended December 2021 against Rs 296.8 m during the previous quarter a year ago.

That apart, on 21 February 2022, Mangalam Organics informed that 'Mangalam Pooja Stores Private Limited' is incorporated as a new wholly-owned subsidiary of the company under Companies Act, 2013 with effect from 17 February 2022.

The new company is incorporated to carry on the business of opening of retail pooja stores for pooja related products.

Also, the company had successfully commissioned the new Steam Boilers and Thermopac to manufacture 10,000 MT per annum of camphor from present capacity of 5,000 MT per annum and the commercial production for the additional capacity of 5,000 MT per annum has been started with effect from 31 January 31 2022.

For more details about the company, you can have a look at Mangalam Organics' factsheet and quarterly results on our website

#4 VST Industries

VST Industries is engaged in manufacture of cigarettes containing tobacco and unmanufactured tobacco.

Founded in the year 1930, VST Industries got its name through its founder Vazir Sultan and now they are the third-largest player in the Indian cigarette market with over 90 years of operations.

The company has a portfolio of reputed brands and it sells cigarettes in India and abroad under different brands including Charminar, Charms, Special, Moments, Total, and Editions.

The market share of VST Industries stands at 9% in the legal cigarette market and 5% in the overall cigarette market in terms of value.

The veteran investor holds 1.63% stake in VST Industries. As per data available with the BSE, Mr. Damani owns 2.5 lakh shares in the firm.

Damani has been one of the key investors in VST Industries for a long time as he has made investments in this company through his firm called Bright Star Investments.

Bright Star Investments Private Limited, as per the December 2021 shareholding pattern of VST Industries, holds at least 40 m shares or a 25.95% stake in the company.

VST Industries has been one of the favourite stocks of Damani, and has been increasing the stakes in the company gradually almost every quarter through his Bright Star investment firm and now in a personal capacity.

VST Industries displayed robust financial performance in the third quarter of the current fiscal on back of sequential volume recovery while continuing to thwart the challenges of higher inflation.

Over the years, the company has been maintaining a healthy dividend payout and has a good track record of return on equity (RoE).

For more details about the company, you can have a look at VST Industries' factsheet and quarterly results on our website

#5 BF Utilities

The last stock on our list is BF Utilities.

BF Utilities is engaged in the generation of electricity through wind mills and infrastructure activities.

The company primarily generates wind power which is then utilised by Bharat Forge at its plant in Pune.

It has four subsidiaries - Nandi Infrastructure Corridor Enterprises, Nandi Economic Corridor Enterprises, Nandi Highway Developers, and Avichal Resources.

BF Utilities constructs many infrastructure projects. The company builds toll highways, township developments, power, water, telecommunications, sewage and waste water management facilities, and electricity generating wind farms.

According to the latest shareholding data, RK Damani holds around 1.28% stake in the company. Damani owns 4.8 lakh shares of the company.

The company reported net profit of Rs 92.8 m in the quarter ended September 2021 against net loss of Rs 62.2 m during the previous quarter ended September 2020.

However, the company firm has delivered a poor sales growth of 4.21% over past five years.

For more details about the company, you can have a look at BF Utilities' factsheet and quarterly results on our website

Should you blindly follow the stock market gurus?

People expect stock market gurus to have done their research. So the stocks they buy come 'pre-verified'...right?

If it were only that simple...

There are instances in the past where favourite stocks of these gurus have seen a bloodbath.

While keeping track of their purchases and sells is a good thing, following them blindly and replicating their portfolio is not advisable.

Richa Agarwal, editor of Hidden Treasure, agrees on this. Here's what she wrote in one of her 2018 editorials while discussing Rain Industries:

• This favourite stock of the likes of Dolly Khanna and Monish Pabrai recently saw a blood bath. Post the results declaration, the stock price tanked. The reason? Another big investor, BNP Paribas Arbitrage Mutual Fund, dumped almost 19 lakh shares.
  
  Devoted fans are wondering what to do next. It doesn't help some of their favourite investors are choosing to maintain stony silence. It may be too late by the time they hear from them.
  
  It's not just one-off example highlighting the perils of copycat investing. If you are blindly following your favourite investors, you are unlikely to make gains.
  
  The reason? You will always get information (and act on it) with a lag. The stock price would most likely be up by the time you hear about it and rush to buy it. And huge gains would have been pocketed by the time you would know your favourite investor has exited.
  
  You are quite likely to end up with the short end of the stick. At times, even losses.

To conclude...sustained research must not be compromised before acting on stocks recommended by the gurus of stock market.

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...