Multibagger

Topic: The hunt for Multibaggers.

Presented by:
Daljeet Singh Kohli, CIO
Tel: + 91 22 6639 3000 Email: [email protected]

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 Finding Needle In haystack
Bring process & science to over looked sectors/stocks

Catch them young

As these businesses grow from Mid/Smallcap to Largecap your
portfolio grows too

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 Better & Deeper Research Wins
Detailed Research Wins over Gut Feel and Market Sentiment.

Constant Monitoring & Tracking

Dedicated team of research Analysts on it everyday

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4 Pillars of stock selection for Multibagger Portfolio

01 Management pedigree / corporate governance. Alignment of

interest

02 Size of the opportunity / profit pool / scalability

03 Superior product and services

04 Capital allocation and business efficiency / cash flows and return

ratios

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Key ingredients for Multibaggers

Low Equity Scalability Pricing Power

Good Management High Growth Tailwinds

Higher Incremental
ROCE

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Corporate Governance – Core component of Risk
Analysis
We consider environmental, social and corporate governance (ESG) issues are core components of company risk
analysis.  ESG analysis is performed before and continues after we recommend any stock.

We believe that poor practice across:

Corporate governance
Environmental management
Human resource practice and
Sustainability management

Will inevitably result in lower investment returns and poorer outcomes for all stakeholders of offending
companies.

We believe that companies scoring high on these issues will result in superior investment performance over the
longer term.

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Drivers of Portfolio Returns

Right Allocation & Exiting the stock at right Time

Superior Portfolio Performance

Cut your losses fast. Ride the profits

Stop Loss is a Friend

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 Current Portfolio

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Multibagger Portfolio
Pharmaceu�cals, Consumer Food, 3%
Sector base Medical Equipment,
4%

Allocation (%) 4%
Healthcare Services,
4% IT - So�ware, 26%

Multibagger Portfolio Market Courier Services,

Cap wise 4%

Mid Cap 17%

Small Cap 73% Tex�le , 5%
Cash 10%

Mining & Minerals,

Multibagger Portfolio 5%
Performance

Ceramics, 5% Pes�cides &

Last 3 months 41% Agrochemicals, 11%
Last 6 months 63%
Last 1 year 97% Pipes - Plas�c, 6%
Depository Services, Cable, 7%
6%

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Monthwise Portfolio Growth (%)
120.00%

100.00% 96.91%
90.14%

80.00%
72.55%

60.00% 56.40%
51.44%

37.48% 38.36%
40.00%
27.63%
22.37% 22.71%
19.76%
20.00%
8.13%
0.00%
0.00%
Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21

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Monthwise Portfolio Returns (%)

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Multibagger- Stocks Investment Rationale

Astec Lifesciences Polycab (Allocation 6%)

(Allocation 7%)

Strong parentage backing with established Strong brand recognition in the electrical
track record in manufacturing fungicides industry
Backward integration and cater to new Transforming itself into a strong FMEG
products business
Leveraging new capacities to capitalize new Government initiatives in Power and infra-
markets structure
Strong demand for its product portfolio

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Multibagger- Stocks Investment Rationale

Intellect Design Arena

(Allocation 6%)

Established player in software product development within BFSI domain

Diversified product profile aids in de-risking the portfolio- 14 products across various sub-segments of BFSI
such as corporate banking, retail banking, treasury and capital markets, and insurance
Emerging as the leader in BFSI category with over 90 clients
Repeat revenue from existing customers stood at 85%
Steady growth in license linked revenue which constitutes cloud/SaaS, AMC and license revenue

Continuous deal wins to provide impetus to growth

Has aggressively invested in sales and marketing from past 5 years

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Multibagger- Stocks Investment Rationale

Prince Pipes & Fittings KPIT Technologies

(Allocation 6%) (Allocation 6%)

Strong brands in the pipes and fittings segment The role of electronics and of software will
increase in vehicles.
Comprehensive product portfolio serving
diverse end-use applications Software is required in CASE – Connectivity,
Autonomous driving, Shared Mobility and
Partnership with Lubrizol will bolster CPVC Electronification. KPIT serves all these areas.
pipes business- amongst the only two
companies using the Flowguard brand 12 out of the 15 top automotive OEMs are
customers. Top 25 (T25) clients account for
Beneficiary of demand shift to organized players ~85% of its revenue

Healthy rural & semi-urban demand to provide

impetus to growth

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Multibagger- Stocks Investment Rationale

CDSL (Allocation 5%)

NMDC (Allocation 5%)

Largest Iron Ore Miner in India Substantial growth in the number of

companies/Issuers admitted in Demat from 541
Increase in Volumes and Prices of Iron Ore to in FY 1999-00 to 14,018 in FY 2019-20, a
Aid Revenue Growth growth of 18% CAGR.
Restart of production of iron ore from Donimalai
mines in Karnataka-major trigger for stock price Gaining market share from NSDL (54%)

Expansion of iron ore production capacity from Duopoly business with high entry barrier
current 43MTPA to 67 MTPA
Diversified revenue stream with high
De-merger of the Steel Business Could operating leverage
Unlock Value

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Multibagger- Stocks Investment Rationale

IndoCount Industries Ltd

Tata Elxsi (Allocation 5%) (Allocation 5%)
Co is one of the world’s leading providers of Demand Improvement in the United States to
design and technology services for product aid Revenue Growth
engineering and solutions across industries
Co has established relationships with top retailers
including the Broadcast, Communications and
in US like Walmart, Target, Bed Bath & Beyond
Automotive sectors.
and JC Penney
Automotive sector (51% of revenue) is Capital Expenditure Plans to Increase Revenue-
undergoing a sea change ~20% increase in bed linen capacity from 90
million meters to 108 million metres by
Media & Communication is the new avenue for
its growth. debottlenecking and balancing its facilities for a
total capex of Rs. 200 crores
The company develops the technology platform
Beneficiary of China Plus One Strategy- US has
for FTH & DTH and OTT service
banned the cotton imports from China’s Xinjiang
FTH and 5G have opened up new opportunities region (contributing +80% of Chinese cotton
production)

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Multibagger- Stocks Investment Rationale

Cera Sanitaryware Coforge (Allocation 5%)

(Allocation 5%)

Amongst Top-3 organized players in Healthy order book aided by large deal wins
sanitaryware market
Scaling up Healthcare & Hi-tech verticals to
The Company has more than 3,600 dealers and provide next levers of growth
12000+ retail touchpoints.
Investing in new platforms and technologies to
Right outsourcing mix provide impetus to growth- strategic investment
Use of high tech in manufacturing-an innovator in WHISHWORKS IT consulting, a Mulesoft and
in the use of technology and automation in Big Data specialist
design and process

Recovery in Real Estate- best-positioned to ride

on real estate recovery

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Multibagger- Stocks Investment Rationale

Mastek (Allocation 4%)

Bluedart (Allocation 5%)

Leading market share in domestic air express Digitization and use of technology will be of prime
49% (up from 45% in 2015) importance - high demand for services like
i) digital transformation, ii) cyber security, iii) cloud.
Security infrastructure and upgrades in
automation and technology Mastek is emerging as Leader in Enterprise Digital
Transformation
E-commerce is emerging as a major growth driver.
Acquisition of Evosys- capabilities of Cloud
Integrated Air and Ground Pan-India Network
implementation and consultancy
Growth in volume becomes important for any Combined capability of Mastek & Evosys creates
courier company as majority of the costs are a new organization which can provide
fixed in nature
end-to-end services-lots of synergies for
co-sell & cross-sell

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Multibagger- Stocks Investment Rationale

Polymedicure Bharat Rasayan

(Allocation 4%) (Allocation 4%)

Beneficiary of ‘Make in India’ Boost Established player in pesticides industry

Acquisition of Plan1 Health S.R.L., Italy Varied product mix provides sustainability in
the business- insecticides, herbicides,
New Jaipur facility to drive growth fungicides, plant growth regulators, their
Expanding product basket formulations and intermediates
Integrated operations amongst group
companies to provide cost advantage

Continuous expansion of business to provide

growth- made investments towards new
capacities for critical inputs as part of backward
integration

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Multibagger- Stocks Investment Rationale

DFM Foods Thyrocare (Allocation 4%)

(Allocation 4%)

Extensive product portfolio- “Crax”, “Curls”, Affordable testing with emphasis on wellness
“Natkhat” and “Fritts” (65% market share) and preventive healthcare
Increased consumption of snacks and packaged Network expansion will boost volume growth
foods
Widening revenue channels to provide
New leadership and new strategy will drive significant growth opportunities
future growth
Leverage the strong brand via
“sub-segmentation”
Recent capacity addition of 5,000 MTPA will
enhance revenues and profitability

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Multibagger- Stocks Investment Rationale

Hikal Ltd (Allocation 4%)

Co has a strong product profile and entrenched relationship with leading multi-national pharmaceutical as well
as agro-chemical companies in the world
Co is the world’s largest supplier of Gabapentin (used to treat epilepsy, neuropathic pain, hot flashes, and
restless legs syndrome) with of ~35% as of FY20.

Co is also the world’s largest supplier of Thiabendazole (primarily used to control fungal diseases in fruits and
vegetables)

Healthy Pipeline of Generic APIs-under development stage -3-4 products in Pharma & couple of products in
crop protection

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Top Performers

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Worst Performers

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