Mukul Agrawal makes fresh entry in these two smallcap stocks

Factors such as a company's fundamentals, corporate governance practices, and stock valuations should play a key role in decision-making. (Image: Pixabay)
Factors such as a company's fundamentals, corporate governance practices, and stock valuations should play a key role in decision-making. (Image: Pixabay)

Summary

Mukul Agrawal’s latest portfolio updates from December 2024 quarter highlights these new stock additions.

Mukul Agrawal, founder of Param Capital Group, is a prominent name in Indian stock markets. With over two decades of bold investing, he’s renowned for spotting multibagger opportunities and shaping market strategies, earning the trust of seasoned investors.

As per the latest corporate shareholding filings, Mukul Agrawal publicly holds 63 stocks with a combined net worth exceeding Rs. 70.1 billion as of 21 January 2025.

His portfolio reflects his sharp investment acumen, showcasing a mix of well-established firms and promising small-cap companies.

In the December 2024 quarter, the seasoned investor adjusted his portfolio, adding two smallcap stocks.

Which stocks did Mukul Agarwal buy and why?

Kirloskar Ferrous

Kirloskar Ferrous Industries Limited (KFIL), a part of the Kirloskar Group, is one of India’s leading manufacturers of pig iron and grey iron castings.

The company has manufacturing facilities in the Koppal and Chitradurga districts of Karnataka and in the Solapur district of Maharashtra.

Uniquely positioned as Asia’s only integrated player spanning mining to machined castings, KFIL offers a robust business model. Data from the exchanges reveal that Mukul Agrawal acquired a 1.2% stake in the company during the December 2024 quarter, underlining his confidence in its growth potential.

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As of December 2024, Mukul Agrawal holds 20 lakh equity shares in KFIL, betting on its turnaround amid industry challenges. Despite fluctuating costs, KFIL sees steady growth driven by rising demand in automotive and industrial sectors.

In the September 2024 quarter, the company reported a 6.8% revenue growth to 16.7 billion and a 13.8% increase in net profit to 776.4 million, despite smaller profit margins due to rising raw material costs.

Further bolstering the investment case for Kirloskar Ferrous Industries (KFIL), the company is also taking significant steps to reduce its operating costs by transitioning to green energy. This follows the merger with Indian Seamless Metal Tubes Ltd. (ISMT) in August 2024.

As part of this strategic move, ISMT had previously installed a 35 MW DC solar plant worth 1.4 billion in Maharashtra, which is expected to play a pivotal role in the company’s sustainability goals.

R V Gumaste, managing director of KFIL, highlighted that power and fuel costs currently constitute 15-16% of the company’s expenses. KFIL aims to significantly reduce this figure to 6-7% within the next two to three years through cost optimisation and efficiency measures.

The company is also diversifying its product portfolio to unlock new growth opportunities. By venturing into emerging sectors and creating innovative casting solutions, KFIL is positioning itself to meet evolving market demands and expand its footprint in high-potential industries.

Kirloskar Ferrous Share Price Performance - 1 Year
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Kirloskar Ferrous Share Price Performance - 1 Year

Ravindra Energy

Ravindra Energy Ltd specialises in solar pumps, solar power plant installations (both ground-mounted and rooftop), and power generation and sales.

In September 2024, the company approved a preferential issue of 24,324,313 equity shares at 10 each, with a premium of 64 per share, raising 1.8 billion to bolster its financial foundation for future growth.

Agrawal acquired 2,162,162 shares through this issuance, representing a 1.21% stake with an investment of approximately 160 million.

What likely attracted Agrawal to Ravindra Energy is its accreditation by the Ministry of New and Renewable Energy (MNRE), underlining its credibility and alignment with India's renewable energy goals.

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The company has been recognised as an empanelled supplier of solar water pumps and a roof channel partner. This certification allows the company to offer solar systems with all available subsidies, ensuring compliance with the ministry’s standards.

Additionally, Ravindra Energy has secured a significant power purchase agreement (PPA) with MSEDCL, Maharashtra’s state-run power distribution utility.

The agreement involves the development of a 100 MW AC solar project under the KUSUM C scheme, with a commissioning deadline of September 2025.

This move strengthens Ravindra Energy's position in the renewable energy sector, especially as it develops renewable energy parks to meet the rising demand from open-access customers.

In addition to Mukul Agrawal, Ashish Kacholia was allotted a 0.9% stake in the preferential issue, reflecting confidence from marquee investors.

The company aims to enhance its financial health as it moves forward.

 

Ravindra Energy Share Price Performance - 1 Year
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Ravindra Energy Share Price Performance - 1 Year

Conclusion

Replicating the portfolios of successful investors might seem like a shortcut to success, but it comes with significant risks. 

A key concern is that retail investors often end up buying stocks at inflated prices, as seasoned investors typically acquire them earlier when they are undervalued

Moreover, the risk appetite, investment horizon, and portfolio size of renowned investors differ greatly from those of retail investors. While experienced investors can afford higher risks and long holding periods, most retail investors may not have the same flexibility, making it unwise to blindly mirror their strategies.

Also read: Indian equities not overly expensive, reflect growth prospects, says Ben Powell of BlackRock Investment Institute

Instead of following others' moves, investors should prioritise their own research and analysis. Selecting fundamentally strong companies that align with personal financial goals and risk tolerance is crucial. 

Factors such as a company's fundamentals, corporate governance practices, and stock valuations should play a key role in decision-making. By focusing on a disciplined and informed approach, investors can build a portfolio tailored to their unique needs rather than relying on the strategies of others.

 

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

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