Big Whale Ashish Kacholia Buys Stake in this Kitchen Appliances Company

Over the years, the stock market has been a perplexing subject for most retail investors. Its inherent volatility, which results in profits and losses, is alluring.

Though it may seem implausible, renowned investors such as Rakesh Jhunjhunwala, Vijay Kedia, Ashish Kacholia, and many more, have successfully navigated the market and generated substantial wealth.

To attain comparable returns, mimicking the investment portfolios of these revered investors stands as a proven approach to beat the market returns.

Therefore, their every move in the market, including their decision to buy or sell stakes in specific companies, garners significant investor attention.

Ashish Kacholia is one such tracked guru.

Ace investor Ashish Kacholia has increased his stake in the consumer-durable company Inflame Appliances during the March 2023 quarter.

Before we delve deep into the reasons for which stock he bought and why, let's take a 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.

Why did Ashish Kacholia buy a stake in Inflame Appliance?

According to the latest shareholding pattern of Inflame Appliance, Ashish Kacholia holds a 4.2% stake in the company.

Ashish Kacholia first invested Rs 117.7 m in Inflame Appliances, picking up over 300,000 shares in the company in June 2022.

After holding shares till September 2022, his name was absent from the company's list of individual shareholders for December 2022 quarter, as his stake slipped below 1%.

Other prominent shareholders in the company include veteran investor Nikhil Vora, who holds a 2.4% stake.

While we do not know the exact reason why the investing guru decided to buy the counter, there are some explanations.

#1 Strong volume growth

For the March 2023 quarter, Inflame Appliance reported 103.8% year-on-year (YoY) growth in chimneys volume to 39,970 units. This was against 19,616 chimneys sold a year back.

While, for the financial year 2023, the company's chimney volume surged by 115% YoY, with 161,273 units sold, against 75,063 units sold in the previous year.

#2 Increasing manufacturing capacity

Inflame Appliance currently has the capacity to manufacture 300,000 chimneys at their Panchkula, Haryana facility.

It further established a new manufacturing facility in Hyderabad, Telangana, capable of producing an additional 300,000 chimneys, allowing the company to remain competitive in the region and provide a sustainable alternative to imports.

The addition of the Hyderabad facility increases the company's total chimney manufacturing capacity in India to 600,000 units.

Furthermore, it is expanding its production capabilities beyond chimneys and establishing a new capacity to manufacture 120,000 hobs and 300,000 gas stoves at its recently constructed facility in Hyderabad.

#3 Ambitious production targets

Going ahead, the company is exploring opportunities to diversify its product range in the kitchen appliances segment by introducing new products such as dishwashers, ovens, and built-in ovens.

The projected timeline for these products is 18-24 months.

For the financial year 2023-2024, the company has set ambitious production targets of 240,000 chimneys from Panchkula and 100,000 chimneys from the Hyderabad facility.

With an eye towards sustained growth, the company aims for a 50% CAGR (compound annual growth rate) over the next 3-5 years.

How the stock of Inflame Appliances has performed recently

Inflame Appliances' share prices are up by over 33% in the past one year. Despite the weak sentiment in the market, the stock has rallied 12% in the past month.

Inflame Appliances has a 52-week high quote of Rs 499.8 touched on 12 January this year while the stock touched its 52-week low of Rs 182 on 23 August last year.

Inflame Appliances currently trades at a price-to-book value multiple of 8.4 times.

As of March 2023, promoters hold 43.6% stake in the company, while FIIs hold 1.1% stake in the company.

To know more, check out Inflame Appliances' latest shareholding pattern.

About the company

Inflame Appliances was originally formed as a partnership firm in the name of M/s Techno Engineering Corporation. In the year 2017, the company got converted into a public limited company.

Based in Himachal Pradesh, Inflame Appliances is engaged in the manufacturing of kitchen appliances like chimneys, gas hobs, and gas stoves under its band Inflame.

Additionally, the company has marketing agreements with Indian Oil Corporation to promote LPG Stoves.

Inflame Appliances also manufactures glass top LPG stoves in the premium range for brands like Hindware and Avaante.

To know more about the company, check out Inflame Appliances' financial fact sheet.

You can also compare Inflame Appliances with its peers:

Inflame Appliances vs Acrysil

Inflame Appliances vs Aarti Surfactants

And to know what's moving the Indian stock markets today, check out the most recent share market updates here.

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...