After upto 10x return in two years, can these 2 Ashish Kacholia stocks rally further?

By Pawan Nahar

Select brokerages have initiated coverage of two Ashish Kacholia portfolio stocks namely Ador Welding and Gravita India. Brokerage firms have 'Buy' calls on these multibaggers. They see potential for these stocks to deliver up to 33 per cent potential upside going ahead.

Nuvama Wealth Research has initiated coverage on Ador Welding (erstwhile Advani-Oerlikon) with a ‘Buy’ call. The company is  welding company, manufacturing welding equipment, consumables, and welding automation solutions.

"We believe Ador Welding will be one of the major beneficiaries of current capex upcycle and internal changes position it for strong growth going ahead," said Nuvama Research. "We estimate it to deliver 15.2 per cent revenue CAGR over FY22-25E with 14 per cent/10 per cent/48 per cent CAGR in Consumables/Equipment/FPED segments."

Nuvama Research expects overall Ebitda margins to expand to 11.4 per cent in FY25E (from 8.8 per cent in FY22) leading to 20.4 per cent PAT CAGR over FY22-25E, said the brokerage firm. "Considering it a strong play on the industrial consumables demand cycle, we assign ‘Tactical BUY’ with target price of Rs 1,050, implying an upside of 33 per cent," it added.

According to data from BSE, Ashish Kacholia held 5,74,100 equity shares or 4.22 per cent in Ador Welding, as of September 30, 2022. Shares of Ador Welding have tripled in the last two years, the data suggests.

Shares of Gravita India have jumped to around Rs 435 on Wednesday, rising more than 1,000 per cent in, from its price of Rs 42.5 in November 2021. Ador Welding, on the other hand, has risen to Rs 800 on Wednesday over Rs 250 level in the last quarter of 2020.

The other stock is Gravita India, where the Dalal Street maverick owns 13,51,649 equity shares or 1.96 per cent stake. Lesser known domestic Research Analyst firm Kamayakya has initiated the coverage on the counter.

Gravita India has domestic scrap collection partners include Amara Raja, ATC India, Indus Towers, Tata Group, Reliance Industries, V-Guard, Asian Paints, Bharti Infratel, Tower Vision, Wyan, NTT and more.

International business contributes 36 per cent to revenue and 75 per cent to its profits, with just 31 per cent capital employed, said the brokerage firm. The company has a strong presence in African markets Ghana, Mozambique, Senegal, Tanzan, it said.

Even in the Indian markets, Gravita is the leader in the organized Lead recycling space in India, with an 18 per cent market share and regulatory tailwinds in the recycling industry, with a shift from unorganized sector to organized sector is likely to support the company further, Kamayakya said.

Other factors including capex to cater domestic volumes, guidance on volumes and profitability with sustainable Ebitda margins, diversification into high margin vertices and reduction of overall working capital requirements, are likely to aid the company in the coming days, said Kamayakya.

The brokerage has initiated the coverage on the stock with a target price of Rs 486 and an upside potential of 20 per cent. Interestingly the stock has already delivered a return of more than 1,000 per cent in the little more than two years.

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