Dolly Khanna's Big Bet on These 2 Stocks: What Investors Should Know

There is a preconceived notion that following a trend often leads to inefficient results.

However, not all trends can be categorised like that. Some trends are very useful, like the 'sale' trend, which comes around July every year.

Similarly, in the stock markets, the trend set by the top investing gurus is often profitable.

These investing gurus ace the market test and earn high returns.

Recently, ace investor Dolly Khanna rejigged her portfolio to a great extent and there were a lot of stocks she added to her portfolio.

Before we move to the stock details, let's take a look at who Dolly Khanna is and her top stock picks.

Who is Dolly Khanna?

Dolly Khanna is a Chennai-based investor, who is known for picking lesser-known midcaps and smallcaps. She has been investing in stocks since 1996.

Dolly Khanna's portfolio, which is managed by her husband Rajiv Khanna, is usually inclined towards more conventional stocks in manufacturing, textile, chemical, and sugar stocks.

In the most recent June 2023 quarter, she bought a stake in these two companies.

#1 Deepak Spinners

Deepak Spinners (DSL), located in Chandigarh, is a well-established name in the textile industry. Under the dynamic leadership of its Chairman, Mr. P. K. Daga, the company has evolved into a leading manufacturer of dyed synthetic yarn.

According to the latest shareholding pattern of Deepak Spinners, the Chennai-based investor bought 0.49% stake in the textile company. She now holds a total stake of 1.65% as on 30 June 2023.

Here's how her investments in Deepak Spinners has fared over the past couple of quarters -

Dolly Khanna's Shareholding in Deepak Spinners (June 2021-June 2023)

Quarter ending	Jun-21	Sep-21	Dec-21	Mar-22	Jun-22	Sep-22	Dec-22	Mar-23	Jun-23
Dolly Khanna's stake (%)	2.07	1.57	1.55	1.42	1.17	1.21	1.16	1.16	1.65

Data Source: BSE

While we do not know the exact reasons why she turned bullish on the company, there are some reasons we can guess.

Deepak Spinners regularly modernises and upgrades its manufacturing facilities. In FY2023, the company spent Rs 483.7 million (m) for the same.

During the year under review, it successfully commissioned 3MW solar power plant at the Guna unit. Savings from this are expected during the current financial year.

India's man-made fibre (MMF) products are known for their workmanship, colors and durability. The demand for MMF products is increasing consistently due to their versatility and scope for further development.

The demand is particularly growing for the millennial generation who prefers lightweight fabrics with low cost and low maintenance. High demand for fitness apparel (activewear) and low-cost and high-performance materials for automotive and industrial use have increased demand for synthetic and MMF products.

Limited cotton production, relatively high cotton prices and versatile applications of MMF are other contributors which may benefit Deepak Spinners.

How shares of Deepak Spinners have performed recently

Over the last one year, Deepak Spinners' share price has gone up by 12.6%.

The company touched its 52-week high of Rs 269 on 12 September 2022 and its 52-week low of Rs 213 on 18 July 2022.

#2 Prakash Pipes

Prakash Pipes manufactures a wide range of products such as agri pipes, column pipes, plumbing pipes, casing pipes, SWR pipes, garden pipes and their related fittings. Its products are used in irrigation, drainage, housing, and sanitation.

The company has ventured into flexible packaging with state-of-the-art plants. Its manufactures high-performance barrier films and laminates. These are used in the packaging of food, beverages, oil, personal care, and pharmaceutical products.

According to the latest shareholding pattern of Prakash Pipes, Dolly Khanna bought a 0.07% stake in the company. She now holds a total of 2.78% in the company as on 30 June 2023.

Dolly Khanna's Shareholding in Prakash Pipes (December 2021-June 2023)

Quarter ending	Dec-21	Mar-22	Jun-22	Sep-22	Dec-22	Mar-23	Jun-23
Dolly Khanna's stake (%)	1.35	2.39	2.71	2.78	2.83	2.71	2.78

Data Source: BSE

Prakash Pipes delivered a sound financial performance in the financial year 2023.

The company's revenue stood at Rs 7,308 million (m), up by 18% on a YoY basis. The stability in PVC resin prices supported by underlining demand momentum from real estate, agriculture, and infrastructure sectors provided strong growth.

The net profit of the company grew by 52% to Rs 712.9 m. The company's profit-earning capacity improved because of growth in sales.

The government's continuing focus on various initiatives, like Jal Jeevan Mission, Swatch Bharat Abhiyan, sanitation, affordable housing and smart cities is also driving the demand for PVC Pipes products.

Also, the government's focus on 'Har Khet ko Pani' for extending the coverage of irrigation and improving water use efficiency 'More Crop Per Drop' increased the scope of the PM Krishi Sinchayee Yojana.

This scheme will also be a key growth driver for PVC companies going forward.

How shares of Prakash Pipes have performed recently

Over the last one month, Prakash Pipes' share price was up 13.4%. In the past one year, it went up 10.3%.

The company touched its 52-week high of Rs 200.2 on 10 August 2022 and its 52-week low of Rs 134 on 17 January 2023.

Conclusion

Following a trend set by an ace investor may be good. But you should not forget that his or her risk appetite is quite larger than an average investor.

So, if someone blindly follows an investing guru, he will fail miserably. Investment is always subjective to everyone's financial condition and preferred investment horizon.

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...