Ashish Kacholia Likely to Pick Stake in This Newly Listed SME Stock

Picture this: Bengaluru, the bustling IT hub of India. A major tech giant in the city is facing a commuting catastrophe. Employees brave the infamous Bangalore traffic, battling bumper-to-bumper chaos on choked roads.

Auto rickshaws are unreliable, public buses overflowing, and the metro barely scratches the surface. This daily struggle is zapping employee morale and impacting productivity. The company's management is at its wit's end.

Frustration with long commutes is leading to increased absenteeism and missed deadlines. The alternative of an in-house fleet seems like a logistical nightmare. Just when it feels on the verge of commuting collapse, a corporate mobility service provider emerges as their savior.

This service provider steps in, offering a customized solution - a combination of ride-hailing services like Ola and Uber, real-time traffic updates with suggested alternate routes.

This comprehensive solution tackles Bangalore's unique commuting challenges, putting IT companies back on the path to a happier and more productive workforce.

Recognising this growing need of such companies, it seems even savvy investors like Ashish Kacholia are taking notice. He is likely to pick up a stake in a newly listed corporate mobility company, hinting at the potential he sees in this growing market.

But before we explore this specific activity, let's get to know Ashish Kacholia better and understand why his investment choices are noteworthy.

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 Stock is Ashish Kacholia Likely to Buy and Why?

The company in question is Shree OSFM E-Mobility.

According to the NSE filling the management of the company met Ashish Kacholia on 29 May 2024. Soon after the meeting, the company filed another intimation stating the company will hold a board meeting on 6 June 2024.

In the meeting the board will finalise the proposal for issues of equity shares of the company on preferential basis to promoter/promoter group/ strategic investor towards raising additional capital by the company.

First the meeting and then the intimation to raise funds, suggests that the ace investor is likely to buy stake in this company.

While we don't know why he might buy shares of Shree OSFM E-Mobility, there are some reasons that we can guess.

#1 Good Financial Performance

The company's 3 financial trajectory is quite promising. Between 2021-2023, the net sales and profits have registered at a 3-year compounded annual growth rate (CAGR) of 41.1% and 64.2%, respectively.

The returns are also strong, with a 5-year average RoCE and RoE of 11.8% and 9.7%, respectively.

Shree OSFM E-Mobility Financial Snapshot (2021-23)

Year	2021	2022	2023
Revenue (Rs in m)	292	303	821
Profit after tax (Rs in m)	7	16	31
Gross profit margin (%)	8	10	9
Net profit margin (%)	2	5	4
Return on capital employed (%)	4	10	21
Return on equity (%)	5	9	15

Data Source: Ace Equity

For FY24 the total revenue of the company stood at Rs 1,190.6 million (m), up 44.1% compared to the last year.

The rise in revenues was on account of a significant rise in demand.

The company's net profit for FY24 also witnessed an impressive 178% increase, reaching Rs 81 m.

This jump is a result of both rising revenues and a healthy growth of demand, ensuring consistent revenues throughout the year. The company's net profit margin also received a boost, climbing 329 basis points.

#2 Bright Growth Prospects

The corporate mobility industry is booming as companies move away from traditional commutes. It offers employees flexible and sustainable travel options, while meeting environmental goals.

This rapidly growing market presents a wealth of opportunities for innovative solutions.

Shree OSFM E-Mobility is well positioned to capitalise on this opportunity. As employee preferences lean towards flexible, sustainable commutes, the company can tailor its services to meet these evolving needs.

Unlike traditional transportation companies that own and maintain fleets of vehicles, the company adopts a lighter approach.

By doing so it bypasses the need for massive upfront investments in vehicles and infrastructure. This allows them to rapidly scale their services to new regions without the burden of managing physical assets.

In essence, its asset-light model is a strategic advantage. It allows for rapid scalability, caters to diverse needs with flexible solutions, fosters efficiency through focused operations, and builds resilience against disruptions.

Also, the company is making big strides in the corporate mobility market by generously integrating electric vehicles (EVs) into their offerings.

By offering EVs, they cater to the rising demand for greener commutes from both environmentally conscious companies and employees, solidifying their position in this dynamic and rapidly evolving space.

How Shree OSFM E-Mobility Share Price has Performed Recently

In the past five days Shree OSFM E-Mobility went up 11.9% and in the last month, it is rallied 32.8%.

In 2024, so far it surged 75.9%.

The stock touched its 52-week high of Rs 184 on 3 June 2024 and a 52-week low of Rs 63 on 21 December 2023.

About Shree OSFM E-Mobility

Incorporated in 2006, Shree OSFM E-Mobility provides transportation services to employees of large multinational companies in major Indian cities.

The company operates a fleet of more than 1,475 vehicles, including small cars, sedans, SUVs, luxury cars, and buses.

Of these, 217 vehicles are owned by the company, while the rest are leased from various providers. Thus it operates on an "asset-light" model.

Typical operating parameters are a monthly rental, per kilometre, per passenger trip, and package mode. The company has branches in 42 locations in cities such as Mumbai, Navi Mumbai, Pune, Bengaluru, and Kolkata. Shree OSFM E-Mobility's clients include JP Morgan, Morgan Stanley, Cape Gemini, Accenture etc.

The service portfolio of Shree OSFM E-Mobility includes: travel desk management, roster management services, logistics for corporate events, fleet management.

To know more about the company, check out Shree OSFM E-Mobility's fact sheet and quarterly results.

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