We had recommended Majestic Auto here at just Rs 60/- (then at approximately at 80% discount to its value of investments). The stock has been hitting upper circuits for last few days and is trading @ 138.75 now.
The valuation gap discussed earlier has now reduced to approx 52% now from 80% earlier. We would recommend investors to book profits at current levels and upsides.
The other stock idea on the similar concept is – BNK Capital. We had discussed the same at our blog here. BNK capital is still available at more than 75% discount to NAV value.
We earlier discussed about Hero Honda and Majestic Auto at our blog and the valuations just keep improving.
As expected, Hero Honda has appreciated from approx Rs 1,600 to Rs.1935 i.e. a gain of 21% in less than 5 months; while Majestic Auto is yet to follow. The current upside in Hero Honda is creating fresh opportunity for Majestic as the gap between the Market Value of Investments (16.25 lac shares of Hero Honda) and the companies own market cap is widening everyday.
The valuation of Majestic as of today:
Own Market Cap of Company: 65.50 Cr
Value of investment in Hero Honda (16.25 Lakh shares) : 314 Cr
Apart from these investments, the company also has a factory, land and other assets.
Majestic Auto Website
“Its’ the work on your desk…It’s the work on your desk. Do well with what you already have and more will come in.” – Charlie Munger
This post is to bring an update and review of all the stocks discussed till now.
Performance till now:
||Date of Recommendation
||Price of Recommendation
||Exit was advised earlier at higher price
||Book partial profits
||Exit was advised earlier
||Book partial profits
||Buy on declines
1. Shilpa Medicare: This stock has been a wealth-creater. The company has yet again posted excellent Q3 nos. Based on the same, the future looks bright and the stock is getting the attention of bigger investors (Read: ICICI Prudential mutual fund 🙂 ). On repeat or better financial performance, the stock has potential to reach 350 levels.
2. Jaihind Projects: The company has been doing well. As per a recent ET article, the co has to complete major projects by mid this year. One should continue to hold.
3. Albert David: This stock was picked as more of a value pick to park idle funds. One can consider booking partial profits.
4. Suprajit Engineering: The company has come out with excellent Q3 nos. The stock has also done well. To reward the shareholders, the management has proposed 45% interim dividend, 1:1 bonus and stock split. Though a bit aggressive than required, all these developments can take the stock to higher levels.
5. IST Ltd: As per the recent updates, the construction activities are going at good pace and co has built almost 10 lac sq ft of space. Leasing out of the same in due time will be a very positive development. If things keep going as per the plans, the stock has all the potentials of becoming a multi-bagger.
6. Manjushree Technopack: We have been providing updates in other threads.
7. Asian Hotels: Usually demergers create lot of shareholder wealth. So one should remain invested and look forward to buying on declines.
We are trying to bring some new picks from the Q3 nos. In the meanwhile some of my other favourite cos have come out with very good numbers and investors can consider them for investing: Balkrishna Industries & Poly Medicure.
Hero Honda has once again come out with brilliant performance. I have been missing investing into this company for quite some time.
Another beneficiary of the stock price of Hero Honda is Majestic Auto. Majestic holds 16.25 lac shares of Hero Honda valued at 262 Cr, as of today, while it’s own M Cap is just 69 Cr. It also has other hidden assets like factory, land and other business interests. The company will also benefit by way of higher dividend – which Hero Honda should payout this year.