Seasoned investors often reveal their convictions through their portfolios. When a market veteran takes a fresh position in a small-cap stock, it tends to draw attention from other investors looking for clues about the next potential turnaround story.
One such move has come from veteran investor Madhusudan Kela, who has recently picked up a stake in small-cap infrastructure company Simplex Infrastructures.
Who is Madhusudan Kela?
Madhusudan Kela is among the most widely followed investors in the Indian stock market, with more than 27 years of experience. Known for identifying companies with strong growth potential, he typically follows a value-oriented approach and prefers long-term investments.
Which stock did Kela buy?
According to the shareholding data for the March 2026 quarter, Kela has acquired a 1.2% stake in Simplex Infrastructures, valued at about ₹174 million.
He held no stake in the company earlier. While the exact reasons for the purchase are not publicly known, several developments could help explain the interest.
Improving financial performance
Simplex Infrastructures has shown signs of operational improvement in recent quarters.
For the December quarter (Q3 FY26), the company reported revenue of ₹2,477 million, up from ₹2,298 million a year earlier. More importantly, the company returned to profitability, posting net profit of ₹60 million compared with a loss in the same period last year.
This turnaround in earnings could be one factor behind the investor interest.
Rising institutional participation
Institutional interest in the company has also increased.
Mutual funds have gradually built positions in the stock, with their shareholding rising from zero in March 2025 to 4.55% in the March 2026 quarter. Growing institutional ownership is often viewed as a signal of improving confidence in a company’s prospects.
What next?
Simplex Infrastructures’ outlook presents a mix of opportunity and risk.
On the positive side, the company has recently returned to profitability after a period of losses. Improved execution and a steady inflow of orders—including projects in sectors such as power—have helped strengthen its order book visibility.
The company could also benefit from India’s ongoing infrastructure push, driven by increased government spending on roads, railways, and urban development.
However, challenges remain. The company continues to report weak return ratios, and sustaining the turnaround will likely depend on reducing debt, improving margins, and maintaining consistent project execution.
Stock performance
The stock has seen notable volatility.
Over the past five days, Simplex Infrastructures shares rose from ₹151 to ₹182.1. Over the last month, the stock is up about 2%, but it remains down 38% over the past year.
The shares touched a 52-week high of ₹343.8 on 13 April 2025, and a 52-week low of ₹136 on 30 March 2026.
About Simplex Infrastructures
Founded in 1924, Simplex Infrastructures is a diversified infrastructure company executing projects across sectors including transport, energy and power, mining, buildings, marine works, and real estate.
Its operations span roads, railways and bridges, industrial construction, power transmission, ground engineering, and urban infrastructure projects.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com