Big Whale Ashish Kacholia Increases his Stake in this Multibagger Stock

You might be wondering what is behind the recent rally in Inflame Appliances. Shares of the company are up over 8% in the past week.

Is it because the company reported stellar revenue growth and profit growth in the latest financial year and turned out to be the fastest growing stock of 2022? Or is it because the company received a rating upgrade?

Neither.

The primary reason was the allotment of 661,000 equity shares on a preferential basis to non-promoters.

The allotment was made on a cash basis at Rs 382 per equity share. The aggregate value of the allotment was Rs 252.5 m.

Ace Investor Ashish Kacholia and Nikhil Vora, along with other HNI investors, were among the top bidders for the shares of the company.

As per company's announcement to the bourses, celebrity investor Ashish Kacholia has invested Rs 117.7 m in Inflame Appliances picking up over 300,000 shares of the company.

Who is Ashish Kacholia?

Ashish Kacholia is one of the leading investors in the Indian stock market. He is very well known for his stock picks in smallcaps and midcaps.

Ashish Kacholia co-founded Hungama Digital with none other than the big bull Rakesh Jhunjhunwala and started his own company Lucky Securities in 2003.

He started his career at Prime Securities and also had a brief stint at Edelweiss Capital before establishing Lucky Securities.

As per a report, the fondly called 'Big Whale' of the Indian stock market, Ashish Kacholia, publicly holds 35 stocks with a net worth of over Rs 14.8 bn.

Why did Ashish Kacholia Invest in Inflame Appliances?

While we can't know for sure why the star investor bought into it, there are some reasons that we can guess...

For the half year ended on September 2021, the company reported over a 160% increase in its total revenues at 146.2 m against 55.8 m posted in the same period previous year.

The recent increase in order book also bodes well for the company.

On 4 July 2022, Inflame Appliances received a large order to supply 45,000 kitchen appliances of various models from well-known company Hindware Home Innovation.

Hindware Home Innovation owns the popular brand Hindware Appliances.

In April 2022, Inflame Appliances secured the first trial order for 700 chimneys from another renowned brand Stove Kraft.

Commenting on the order, Amit Kaushik, CEO & CFO, Inflame Appliances said:

• We are pleased to share this milestone development. Demand for home and kitchen appliances will grow manifold over the coming decade and Inflame Appliances is committed to the vision of growing production rapidly to be the leading manufacturer in India.

Note that Ashish Kacholia had bought fresh stake in Stove Kraft in the March 2022 quarter.

Apart from these, Inflame Appliances has also bagged trial orders for chimneys from Flipkart and Wonderchef in the financial year 2022.

Inflame Appliances also takes part in the Prime Minister Ujjwala Yojana (PMUY). The scheme aims to provide 50 m new gas connections to the people below the poverty line. The company has largely benefitted from the increased demand helping it achieve higher growth.

The PMUY scheme is being extended to other class of poor people under the name Ujjwala Plus. This will create another 30 m new connections.

Another factor here is promoters holding. Promoters are perceived to have in-dept outlook of the company's future. So, when they change stakes, it speaks a lot of their confidence in the company's performance.

The promoters of Inflame Appliances had started to reduce stakes form the March 2021 quarter. But this has hit a plateau.

The promoters have not sold any stake in the last two quarters hinting towards an improved outlook.

While all these reasons are compelling enough, do remember not to plunge into a company's stock just because a market guru has bought some stake.

Investing is not that simple!

How the stock of Inflame Appliances has performed recently

Inflame Appliances share prices are up by over 58% in the past one year. Despite the weak sentiment in the market, the stock has rallied 6.9% 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 19.3 times with a marketcap of Rs 2.7 bn.

As of March 2022, promoters hold 48.1% stake in the company, with no shares having been pledged. There are no FIIs holdings 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...