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  • Apr 19, 2023 - Ace Investor Vijay Kedia Raises Stake in This Multibagger Auto Ancillary Stock

Ace Investor Vijay Kedia Raises Stake in This Multibagger Auto Ancillary Stock

Apr 19, 2023

Ace Investor Vijay Kedia Raises Stake in This Multibagger Auto Ancillary Stock

Today's investors are faced with a myriad of investment options and strategies.

Whether you are seeking someone to manage your money or are a self-directed investor deciding to tackle the market on your own, the options can be overwhelming.

Therefore, many investors follow investment gurus who have achieved the pinnacle of success in the financial world as they can help investors become better traders and can aid them in creating wealth over the long term.

Retail investors closely follow ace investors' portfolios to find out value picks. They scan portfolios of market magnets to find out the direction in which smart money has flowed in the last quarter.

For such stock market investors, there is a piece of stock market news.

Ace investor Vijay Kedia has increased his stock in the multibagger auto ancillary stock during the March 2023 quarter.

Who is Vijay Kedia?

Vijay Kishanlal Kedia is an Indian investor and trader based out of Mumbai. 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 the 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.

Which auto ancillary stock did Vijay Kedia raise its stake in and why?

According to the latest shareholding pattern of Affordable Robotics and Automation, Vijay Kedia now holds a 13.4% stake in the company, against 12.3% in September 2022 quarter.

Vijay Kedia first picked up over 1 million (m) shares in the company in September 2018.

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%.

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

#1 Sectoral boost

The auto ancillary sector is set to see an increase in demand owing to the government's implementation of stringent safety regulations for vehicles.

Also, despite the weakening economic conditions in the United States and Europe, which account for more than 60% of India's shipments, the sector is projected to achieve a 20% YoY growth by the end of the financial year 2023, according to Automotive Component Manufacturers Association of India (ACMA).

This can be attributed to the adoption of strategies by companies in the United States and European nations to de-risk their sourcing from China, with the Chain plus-one strategy gaining momentum.

With China plus one strategy gaining momentum, India is seen as an attractive alternative destination.

The current size of India's auto component industry is just around 10% of that of China.

The current value of India's auto ancillary industry is estimated to be around US$ 56 bn, while that of China is around US$ 550 bn. China's annual exports of auto components stand at approximately US$ 200 bn, whereas India's exports amount to nearly US$ 20 bn.

This offers an opportunity for Indian auto component manufacturers, putting auto ancillary stocks in the sweet spot.

#2 Government Push

The government has approved the PLI scheme for the automobile and auto component industry with a budgetary outlay of Rs 259.7 bn.

Through this scheme, the government offers financial incentives to firms to boost domestic manufacturing of Advanced Automotive Technology (AAT) products and attract investments in the automotive manufacturing value chain.

It is expected to attract investments of Rs 748.5 bn in the next five years.

Further, having a presence in the niche market of manufacturing and supplying a comprehensive assortment of robotics solutions to the automobile sector, the company is set to benefit from low competition.

How the stock of Affordable Robotic and Automation has performed recently

Affordable Robotic and Automation share price have given multibagger return of 109% in the past one year. Despite the weak sentiment in the market, the stock has rallied 23% in 2023.

Affordable Robotic and Automation has a 52-week high quote of Rs 424.2 touched on 24 January this year while the stock touched its 52-week low of Rs 106.1 on 21 June last year.

About Affordable Robotics and Automation

Affordable Robotics and Automation is engaged in the business of providing turnkey automation solutions to automotive, semi-automotive and manufacturing industries.

The company programs and automates the functions of machines used in the manufacturing process of the automobile industry.

It is also in the business of assembling and installing automatic multilevel car parking systems.

It has also set up a new line of business, Secondary Packaging, which is aimed at FMCG industries by way of providing automation service in container packaging of the final packed product.

You can also compare with its peers:

Affordable Robotic and Automation vs Deep Industries

Affordable Robotic and Automation vs Arron industries

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

Investment in securities market are subject to market risks. Read all the related documents carefully before investing

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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...


Which are the best value investing stocks in India right now?

As per Equitymaster's Stock Screener, here is a list of the best value investing stocks in India right now...

These companies have been ranked as per their PE (Price to Earnings) ratio and PB (Price to Book Value) ratio. The lower the ratios, the more undervalued the stock is.

They also have low debt and high return on equity.

Note that, there are various other parameters you should take into account before investing in any company such as promoter holding etc. Sustained research must not be compromised despite the positive odds.

Can value investing make you rich?

Yes. However, note that value investing is not a get-rich-quick scheme, it's a buy-and-hold strategy.

Once you manage to find a fundamentally strong company that is priced lower than its actual value, you must buy and hold for a long term.

This will help you ride out the volatility in stock prices and avoid the pitfalls that come with trying to time the market.

How does Warren Buffet value stocks?

Warren Buffett evaluates stocks based on his value investing philosophy.

Buffett looks for companies that provide a good return on equity over many years, particularly when compared to rival companies in the same industry. He also reviews a company's profit margins to ensure they are healthy and growing.

Besides this, he focuses on companies that provide a unique product or service that gives them a competitive advantage. He also focuses on companies that are undervalued, ie. have a margin of safety.

Here's a list of Indian stocks that could qualify per Warren Buffett's criteria...

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