Bulk Deal Alert: Vijay Kedia Buys Fresh Stake in This Steel Stock

One of the goals of a stock market investor is to get huge returns from the investment.

After all, who doesn't want to get rich fast by investing in a stock that increases your original investment manifold?

But identifying such stocks is not a walk in the park.

To reap sizable profits from the equity market, one must possess substantial skill and adeptly leverage their knowledge to identify top-notch stocks capable of generating exponential returns.

Thus, many investors seek the portfolio of renowned investing experts who have a track record of outperforming the market and a talent for spotting multibagger stocks.

As a result, every move these investing gurus make, including their decisions to buy or sell stakes in specific companies, garners significant market attention.

For investors seeking such news, there is big news today. Vijay Kedia, an ace investor, has added a substantial number of shares of a steel company to his portfolio.

Who is Vijay Kedia?

Vijay 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. A few of these stocks were Atul Auto, Aegis Logistics, and Cera Sanitary.

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

The stock in question is none other than Om Infra, one of India's leading construction companies.

According to the data available on exchanges, Vijay Kedia, through Kedia Securities, added around 2.56% stake in the company on 4 September 2023.

The ace investor bought 2.5 m shares in the company for Rs 152 million (m).

According to bulk deal data from the exchanges, the deal was executed at a weighted average price of Rs 61.7 a share.

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

Robust financial performance

Om Infra reported a strong set of numbers for the June 2023 quarter.

The company clocked 125% YoY growth in revenue from operations to Rs 2.6 bn in the June 2023 quarter, compared to Rs 1.2 bn in the same quarter the previous year.

The diversified conglomerate continued to clock a stellar performance in the June 2023 quarter, with its bottom line jumping more than 100% on a year-on-year (YoY) basis.

It reported a 122% increase YoY in its net profit, which came in at Rs. 159.7 m. Its net profit stood at Rs. 72 m in the corresponding quarter a year ago.

The company's order book remains strong at around Rs 25 bn, executable over the next two years while maintaining a debt-free and asset-rich profile.

The operating profit of the company improved close to 70% at Rs 220 m, with operating profit margins coming in at 8% for the June 2023 quarter.

Apart from this, it has showcased progressive financial performance over the years.

Furthermore, the company has exhibited consistent financial growth over the years, boasting a remarkable compound annual growth rate (CAGR) of 49% in revenue over three years, with net profit also showing a CAGR of 4%.

This impressive growth can be attributed to the company's successful sales expansion efforts.

Financial Snapshot (2021-23)

Particulars	21-Mar	22-Mar	23-Mar
Revenue (Rs bn)	2.4	3.1	7.9
Revenue Growth (%)	-	29	154
Net profit (Rs m)	109	264	128
Net Profit Margin (%)	4.5	3.8	4.6

Data Source: BSE

The company is currently working on multiple engineering projects, including some backed by the government, such as 'Har Ghar Jal' and various other infra and water storage projects including dams, canals and more in the various parts of the country covering almost 16 states including Nepal and Rwanda (Africa) in the foreign market.

Looking ahead, the company is poised to further excel in the ever-evolving water infrastructure sector, aiming for a four-digit topline.

Strong sectoral outlook

Om Infra's growth is poised for growth as the Indian steel industry is the second-largest producer in the world and is expected to grow at a CAGR of 7% in the next five years.

Expanding population, urbanisation, greater infrastructure spending, and high demand for automobiles are driving the growth.

To add to this, the government has introduced various initiatives to boost the production and export of steel.

One such scheme is the PLI scheme, where steel companies have committed an investment of Rs 295 bn to add a capacity of 24.78 MTPA by 2026.

Now, the government is planning to announce the second leg of the PLI scheme (PLI 2.0) with a focus on import substitution and taking care of the requirements of the Indian Railways.

These developments bode well for Om Infra's growth prospects in the coming years.

How shares of Om Infra have performed recently

The Om Infra stock rose around 72.3% in the past one year. In 2023 so far, the share price has gone up by 53%.

Om Infra share price touched its 52-week high price of Rs 62.9 on 30 August 2023. Its 52-week low was Rs 29.7 touched on 28 March 2023.

The company is currently trading at a PB (price to book value) multiple of 14 times.

About Om Infra

Om Infra is one of India's leading construction companies. It is a part of the Om Kothari Group, which is a diversified conglomerate with interests in metals, mining, infrastructure, and real estate.

The company's expertise lies in the construction of roads, bridges, buildings, and power plants. It also provides project management, consultancy, and engineering services.

It is pioneer in the field of turnkey execution from design, detailed engineering, manufacture, supply, installation, testing & commissioning of complete range of hydro mechanical equipment's for hydroelectric power & irrigation projects, PHED, PWD & various corporations.

For more details, see the OM Infra quarterly results and OM Infra share price.

You can also compare Om Infra with its peers:

Om Infra vs Likhitha Infrastructure

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

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