1,000% return! Ashish Kacholia's biggest stock bet jumps 115% in 2023; shares up 11x since 2020 low

Seasoned investor Ashish Kacholia's biggest stock bet has rallied 115 per cent in 2023 so far, taking its gains from 2020 low levels to 1,050 per cent. Kacholia entered this luggage maker in the March 2020 quarter with a 1.71 per cent stake. He increased his holding in this company to 2.74 per cent by mid-2022, only to trim stake in recent quarters. Yet the multibagger stock remains his biggest equity holding roughly at Rs 200 crore. This is Safari Industries.

At last count, Kacholia owned 5,43,000 shares or 2.29 per cent stake in the company. Analysts noted that Safari has been consistently gaining share and is posing a credible threat to other players, intensifying competition within the luggage industry.

This month only Safari commenced operations of additional 125,000 units at its factory situated at Halol, Gujarat. Consequently, the production capacity of Safari Manufacturing Limited, a wholly owned subsidiary, has increased from 2,25,000 units per month to 3,50,000 units per month.

Prabhudas Lilladher said that the increased capacity is likely to further cushion gross margin as it would reduce reliance on outsourcing. "We maintain our positive stance on Safari as consistent gain in market share and rising share of indigenous manufacturing is likely to result in sales/PAT CAGR of 24 per cent/31 per cent over FY23-FY25," it said recently.

This brokerage has maintained 'Buy' on the stock with a target of Rs 3,728.

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Shares of Safari Industries stood at Rs 3,644.55 in Tuesday's trade, up 3.25 per cent. It traded at sub-320 levels on a closing basis in May 2022. Safari has ventured into premium range under the brand name Urban Jungle. This is comparable to premium luggage categories of VIP Industries and Samsonite. Safari has ambitious plans to grow its premium segments. This could provide additional boost to its margins over the coming 2-3 years, said IDBI Capital.

"We continue to applaud management’s ability to outperform industry sales growth and also expand operating margins to higher levels. Hence, we continue to have a positive view on the stock and maintain our BUY rating," the brokerage said recently while suggesting a target of Rs 4,089 on the stock (earlier Rs 3,223).

The scrip has an average target price of Rs 3,884, as per Trendlyne, which suggests a 7 per cent upside potential for the stock.

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