Drilers 1

Today's blog is based on one of the most mysterious investors,INDIAN TALENT, in the Indian Stock Market. Her name is Mrs.Dolly Khanna. She has never been interviewed
and is not much active in any social media. The only
time we know about her is when she buys 1% or more stakes in any company since Indian
laws make it compulsory to disclose it in the exchange.
Another mysterious secret about her is, it's actually her husband Rajiv Khanna who manages
the portfolio for her. Rajiv Khanna is an IIT Madras
chemical engineering graduate. He is around 68 years now
and started investing after the age of 40, which tells us that it's never too late to start
something new.
In his initial days, he started his career in Jagjit Industries which is a beer and other
drinks-making company.
He later worked for ICI Ltd a pharmaceutical company as a research person in the field
of industrial explosives and blasting physics. Later he worked in multiple
companies as a research associate.
Eventually, he got tired and wanted to start something of his own. In 1986 he started "Kwality
Milk Foods" which was a milk product and ice-cream
making company. They sold their ice-cream business to Hindustan Uniliver in 1995 which was his
first major break.
He then started investing in the stock market as a hobby and still considers it a hobby. Their
first decade of investment journey was full of ups
and downs. They suffered big losses in IT companies. It was after 2007 that their stakes started becoming
bigger. Their patience and perseverance paid when they identified their first multi-bagger
in Unitech. This stock appreciated 300 times in 2003.
In 2007, he invested in Hawkins Cookers which turned out to be their next multi-bagger.They
kept accumulating this stock till June 2009 at
130-140 levels, today that stock is @2700 levels. After this success, he never looked back.
In 2014, he picked up Nilkamal: one of India's top manufacturers of plastics, home, and office
furniture.
In the last 3 years, the stock is up nearly 900%, which means an investment of 1 lakh in 2014 would have
become 10 lakh by now. The stock went from 197 to 1960
levels.
He went on to identify many further multi-baggers like Wimplast(Which grew 7 times in 2 years), Cera
Sanitaryware(Which grew 7 times in 2 years),RS Software(which grew 4 times in less than 2
years), Liberty Shoes(Which doubled in 3 months),Nilkamal(Which
grew 10 times in 3 years),Trident, Manappuram Finance, etc
He believes in holding a stock for a long time but not against selling a stock if it
is making him a pretty profit. One such instance was
when he bought 1% stake in Amara Raja Batteries worth 13cr
in the June quarter of 2012 and sold the entire stake in less than 6 months for 39cr.He relies on
completely on publicly available information but considers meeting the management if he gets a chance. He compares his buying of stocks to different tennis courts such as the hard court, clay court, lawn, etc.
Similarly, stock can be a value stock, growth stock, momentum stock or technical
based stock.
His investment philosophy is as follows: 1)Invest in what you know: He follows Peter
Lynch investment philosophy,i.e buy what you know and
understand. Always do fundamental research before you buy a stock. I have given the links
of his books in the description, if you are interested
you can buy them.
2)Never depend on others: Always invest based on your knowledge and facts, never depend on
others or any insider information for investment. Because
it's your money and no one else should get control
of it except you.
3)Invest in small and mid-caps: He only invests in small and midcap stocks, because your chances
for finding multibagger stocks is high when you
go for smallcap and midcap stocks.E.g.A large-cap company
has 1,00,000cr market cap and a midcap company has 5,000cr market cap and both want to double
their market cap. Suppose existing customers of large-cap
are 1,000 and midcap are 50. It is easier to get the
next 50 customers for the midcap company than to get the next 1,000 customers for large-cap
company. But both companies have different levels of risks
and margin of safety.
4)Invest in consumption-based stocks: He invests mostly in consumption-based stocks
i.e the end customers of the products are normal public.E.g.
Cookers in Hawkins Cookers, Plastic chairs, and other
materials in Nilkamal, Shoes in Liberty Shoes, etc.All these deal in the middle-class consumption category,
where the consumption is expected to be very high.
5)Invest in few stocks: He invests in only a few stocks after doing careful research. Learn to exit once your target is achieved. Never get emotionally
attached to any stock.
6)Stay away from banking and pharma: He advises to stay away from banking and pharma stocks, because
he feels these stocks are risky since they are affected by RBI and US FDA regulation
and other news.
7)Ownership: He analyses the company and asks himself, "Will you buy the entire company
if given a chance ?"If the answer is yes, then only he
invests.
8)Valuation: He looks for companies with a low market cap to sales ratio, low P/E ratio
and companies with a huge potential to grow.
He considers himself very lucky and says that people just see the profits we make, nobody
knows the hits we have taken. He says, "It's not
the money, it's the challenge that is exciting. Money is
just the outcome. Once you start to understand the game, making money is not difficult."
Some of his portfolio holdings include: Dhampur Sugar Mills
Srikalahasthi Pipes Trident
Tata Metaliks Ruchira Paper Mills
Da-Ichi Karkaria Nitin Spinners etc
His total portfolio is now worth more than 200cr, and all this by buying lesser-known
stocks and identifying them at the right time.