Ashish Kacholia to Pick Stake in Multibagger Smallcap Stock that Rallied 2,000% Since Listing

For the past few trading sessions, a smallcap multibagger stock, which was already sitting on heavy gains, has started to inch even higher.

The stock in question is shipping company Knowledge Marine & Engineering Works.

Shares of the company have gained 687% in the past one year. In November 2022 so far, shares are up around 36%.

What triggers are responsible behind the recent surge? Well, it surely has something to do with one of the investing gurus of India - Ashish Kacholia.

Apart from that, stellar Q2 results is another reason why the stock is rallying.

Who is Ashish Kacholia?

When we talk about successful investors in India, it's impossible not to mention Ashish Kacholia. He has generated a net worth of Rs 17 bn by investing in Indian stock markets.

Ashish 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.

What's the connection?

Earlier this week on Monday, the company announced to issue 565,000 preferential shares at an issue price of Rs 700 each aggregating to Rs 395 million (Rs 39.55 crore).

What followed was shares of Knowledge Marine hitting the daily circuit limit.

Seasoned investor Kacholia is among the seven entities that will get the preferential allotment of the equity shares.

He will own 200,000 equity shares in the company.

According to Knowledge Marine's September 2022 shareholding data, Kacholia's name did not appear in the list of investors holding 1% stake.

This will change soon as he will now own 1.85% stake in the shipping company.

The allotment is subject to the approval of shareholders. The company has called for an extra-ordinary general meeting (EGM) on 9 December 2022 to decide the same.

Knowledge Marine currently trades on the BSE SME Platform. This platform is for companies whose post-issue paid-up capital has less than or equal to Rs 250 m.

On a growth trajectory...

For the quarter ended September 2022, Knowledge Marine reported a 425% surge in its net profit to Rs 238.4 million (m).

The sharp rise in profit was on the back of heavy surge in revenues. Revenue zoomed 540% YoY to Rs 1,227.1 m.

Quarterly Results Snapshot

Rs m, consolidated	Sep-21	Sep-22
Revenues	190	1227
Expenses	100	880
Operating Profit	70	350
OPM (%)	37%	29%
PAT	30	238
PAT Margin (%)	16%	19%

Data Source: Company

In its 2022 annual report, the company mentioned the Indian dredging and marine time industry is likely to experience significant expansion in the coming years.

The government's plans to create new waterways and ports, as well as upgrade and expand the current ports, will account for the majority of this expansion.

In November last year, the company was awarded its first international order for dredging and providing maintenance of access channel and port basin at Sittwe Port. The contract was value at Rs 1.3 bn.

The project is to be completed by late 2024 and can also be extended for further 2 years.

Over the years, the company has reported increasing revenues and profits. The year gone by was its best where PAT rose more than three times.

Financial Snapshot

Rs m, consolidated	FY18	FY19	FY20	FY21	FY22
Revenues	106.0	105.7	239.1	332.8	611.1
Growth (%)	-	0%	126%	39%	84%
Operating Profit	26.0	43.3	80.3	132.9	329.3
OPM (%)	24%	41%	34%	40%	54%
PAT	13.2	19.0	34.5	65.2	194.8
PAT Margin (%)	12%	18%	14%	20%	32%
Total Debt	69.2	113.6	161.3	169.4	264.0
Debt to Equity (x)	3.40	1.77	1.55	0.63	0.56

Data Source: Ace Equity

No wonder Ashish Kacholia is bullish on the company.

How Knowledge Marine has performed since listing

Knowledge Marine was listed on the BSE SME platform on 22 March 2021. The company allotted shares at an issue price of Rs 38 per share in its initial public offer (IPO).

It currently trades at Rs 900, a rise of over 2,200% from its IPO price in under two years!

In the past one year alone, the stock has risen over 650%.

Knowledge Marine shares hit a new high of Rs 950 yesterday but fell later as some profit booking was expected.

It has a 52-week low of Rs 121 touched on 18 November 2021.

About Knowledge Marine

Knowledge Marine & Engineering Works is primarily engaged in the business of owning, hiring along with manning, operation and technical maintenance of marine crafts and repairs/maintenance of marine crafts and marine infrastructure and allied works in India.

To know more, check out Knowledge Marine's financial factsheet.

You can also compare it with peers:

Knowledge Marine vs Cochin Shipyard

Knowledge Marine vs VMS Industries

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