Bulk Deal Alert: Ashish Kacholia Buys 100,000 Shares of this Smallcap Multibagger Stock

Just another fizzy drink? That's Coke.

Somebody say ordinary denim? Try Levi's.

Merely a communication device? Think iPhone.

Why do we consistently gravitate towards specific brands, paying a premium?

Everyone knows the importance of reputation for a company.

Highly reputable brands have multiple things going for them. And Ashish Kacholia's latest stock pick is a company that analyses multiple high-reputable brands to create a product design.

This company's business model is basically studying brands and, in the process, manufacture sample, get it approved from the brand, and outsources manufacturing activities.

Before we delve deep into the stock details, let's take a look at who Ashish Kacholia is and what are some of his top stock picks.

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 did Kacholia Buy and Why?

The company in question is Brand Concepts.

According to bulk deal data on the Bombay Stock Exchange (BSE), Ashish Kacholia bought 100,000 shares of Brand Concepts on 1 December 2023.

This represents close to 1% stake of the total equity.

This is the first instance of Kacholia buying this stock.

While we don't know why he bought shares of Brand Concepts, there are some reasons that we can guess.

Promoters of brand concepts have a decade-old experience in the industry, involved in the trading of branded bags, luggage, and travel gear.

This not only helps maintaining its relationship with customers but suppliers as well.

In the year gone by, the company made stellar additions to the team with two new brands - United Colours of Benetton and lightweight contender Aeropostale.

Some experts were concerned about the company's dependence on Tommy Hilfiger brand, but we could see it already making progress with the above reputed new additions. Around 90% of its revenue comes from Tommy Hilfiger at the moment.

United Colours of Benetton is expected to have a larger market compared to Tommy Hilfiger.

The company's license renewal is also up, and the Tommy Hilfiger brand is expected to be renewed until 2026.

For the next two years, Brand Concepts has big plans in store and it's looking to open 4-6 more stores by the end of the financial year 2024. A store costs around Rs 40-50 lakhs to open.

With this capex expansion, the company is looking to touch Rs 5 billion (bn) per year revenue and the impending merger is also expected to add value.

Brand Concepts is currently in the process of merging with IFF Overseas.

As far as its financials are concerned, Brand Concepts has grown its revenue 4 times between 2021-2023.

This turnaround performance has made the company profitable as it had posted a loss in FY21.

Financial Snapshot

Rs m, consolidated	FY21	FY22	FY23
Net Sales	428	862	1,632
Growth (%)	-	101%	89%
Operating Profit	-6	84	216
OPM (%)	-1%	10%	13%
Net Profit	-63	6	98
Net Margin (%)	-15%	1%	6%
ROE (%)	-35.7	4.3	43.9
ROCE (%)	-6.3	13	38.4
Dividend (Rs)	0	0	1
Debt to Equity (x)	1.7	1.4	0.9

>Data Source: Ace Equity

Brand Concepts declared its first interim annual dividend in FY23.

How Brand Concepts Share Price has Performed Recently

In the past one month, Brand Concepts share price has gone up by 34% while in the past 1 year, the stock is up 144%.

In 2023 so far, it has gained 125%.

Brand Concepts has a 52-week high of Rs 662 touched on 23 November 2023 and a 52-week low of Rs 186 touched on 18 April 2023.

The stock has been currently put under the ESM framework due to sharp moves seen in the month gone by.

About Brand Concepts

Brand Concepts is engaged in the trading of travel gear and small leather goods, handbags, and accessories.

The company works with brands like Tommy Hilfiger, AND, Global Desi & HEAD and also sells its in-house brands Sugarush and The Vertical.

To know more, check out Brand Concepts financial factsheet and its latest quarterly results.

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...