A Backdoor Way to Invest in Booming Industries

He chose an indirect way to make the most of the opportunity and created generational wealth.

Most investors want to invest in well-known brands, companies, and trends.

This popularity often lands such companies and their stocks in the overvalued zone. The result is underwhelming returns.

The real money making opportunity in the popular themes and plays often lies elsewhere.

It's with companies that are a part of the value chain, enablers of the trend or theme.

But these companies are often overlooked as they get overshadowed by the direct plays.

In stock markets, some such examples include Accelya Solutions. The company is a niche IT service provider to aviation industry.

Now aviation over the years has become a big trend in India (barring the pandemic and lockdowns).

Multiple flight operators and budget flights have entered the industry. Flying is no more a luxury but a mass phenomenon.

Still, direct plays on the aviation industry haven't been big wealth creators. In fact, some of them have become bankrupt.

Yet, proxy play such as like Accelya Solutions has offered over 20% compound annual growth rate (CAGR) for over a decade.

This trend is apparent across industries. In real estate, the long-term returns from the direct plays are underwhelming.

However, proxy plays like Kajaria Ceramics and Cera Sanitaryware have offered great wealth to shareholders.

The smallcap space is rife with such unidentified players that are critical to the execution of big trends, or for survival of well-known companies and brands. These small stocks are still not getting their due in the current rebound rally.

The latest proxy play we picked for Hidden Treasure subscribers is the largest company of Indian origin in a niche chemical industry.

Despite its small size, its client list is impressive - Godrej Consumer, GSK, HUL, Britannia, Amul - among others.

The company's strong focus on R&D, intellectual property, and sticky and long-standing relationships with clients has given it a commanding position.

The chemicals it manufactures are critical to the product and brands of famous food, beverage, and FMCG companies. In fact, most of the companies in this niche industry have been in business for a century, given their criticality.

In these highly disruptive times, it's comforting to know that certain businesses and companies will remain relevant forever.

What makes me positive about its future is that it has the potential to grow revenues two to three times, with minimal capex. Food, FMCG, and Pharma, are some of the safest sectors to bet on in a pandemic. The best part is you can play this growth story without paying a high valuation.

Hidden Treasure subscribers can read the recommendation report here.

For more such updates on investing opportunities in smallcap space, stay tuned...

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure

PS: I'm starting a telegram group, called Smallcap Fortunes and would love you to join me. My aim is to filter market noise and keep you abreast of interesting developments in the economy, industries, stock market, and companies. This could help you participate in the long-term wealth building opportunity in small caps. Click here to join.