Calendar year 2023 has been a bumpy ride for Indian equities so far. First, the defeat in Adani Group shares dampened investor sentiment, leading investors to wonder if India is at war.
Calendar year 2023 has been a bumpy ride for Indian equities so far. First, the defeat in Adani Group shares dampened investor sentiment, leading investors to wonder if India is at war.
Second, Fed Chair Jerome Powell’s recent suggestion that the final interest rate could be higher than expected has made global equity investors nervous. This could spell further pain for equity markets.
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Second, Fed Chair Jerome Powell’s recent suggestion that the final interest rate could be higher than expected has made global equity investors nervous. This could spell further pain for equity markets.
Making money in these volatile times is a challenging task.
Luckily, a strategy of mimicking the portfolios of finance gurus is gaining popularity to outperform the market during these challenging times.
The main idea behind this strategy is to look at the buying and selling activity of the big names in the stock market.
These investment gurus have a successful track record of beating market-like returns and a knack for identifying multibagger stocks. One of these guru is Mohnish Pabrai.
Mohnish Pabrai is an Indian-American value investor known for spending $650,000 to have lunch with his mentor, Warren Buffett.
His investment preference is low risk, high value stocks in an established company with minimal losses and solid management.
According to recent company holdings filings, Mohnish Pabrai publicly holds three shares with a net worth of over €11.6 billion
Please note that the source of the stocks listed below is from Ace Equity and may be a complete list of stocks.
The first stock on this list is Rain Industries.
Mohnish Pabrai holds an 8.82% interest in the company, or a total of 29 million shares as of December 2022, in accordance with the Rain Industries ownership pattern.
Considering the company’s current market price of €On March 10, 2023, Mohnish Pabrai’s overall rating at Rain Industries was 162.8 €4.8 billion (bn).
His rationale for buying at the counter?
In the years that we’ve owned Rain, I’ve watched Jagan Reddy (CEO of Rain and 40+% shareholder) make one wise decision after another. In fact, I’ve never seen Jagan make even a stupid decision. He has made very large capital allocation calls over the past 12+ years and they have been flawless. It’s a remarkable record. He’s a dream manager.
He invested in Rain Industries back in 2015. Here’s how Pabrai’s stake in Rain Industries has changed over the past few years.
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Pabrai was first drawn to Rain Industries because the stock was cheap. He later explained that it trades at a price-to-earnings (PE) ratio of 1, putting it in that rare bucket of super cheap value stocks.
Since he bought Rain Industries, its stock price is up 422%.
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Unfortunately, Rain Industries is notorious for underperforming. The company’s shares have fallen 57% over the past five years.
Additionally, in October 2022, Rain Industries’ wholly owned subsidiary, Rain Carbon, announced the temporary closure of its European unit. The company is currently considering further energy-related plans for other European production units.
For the December quarter of 2022, a 35.5% year-over-year increase in sales was reported €54.6 billion. Net income for the quarter was €895.2 million, an increase of 192.3% from the December quarter of 2021.
The revenue increase was mainly due to market quotations, higher volumes due to shipping timing, and increased raw material prices and operating costs.
In the future, the company plans to expand its reach in the international market and diversify its portfolio with other commodities.
#2 Edelweiss Financial Services
The second company on this list is Edelweiss Financial Services.
According to Edelweiss Financial Services’ latest participation scheme, Mohnish Pabrai holds 6.72% or 63 million shares of total equity.
Considering the company’s current market price of €58.2 as of March 10, 2023 is the total value of Mohnish Pabrai in Edelweiss Financial Services €3.7 billion
This is how Pabrai’s stake in Edelweiss Financial Services has changed since March 2019.
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The value of his stake plummeted as NBFC shares plummeted like rocks during the IL&FS liquidity crisis of 2019.
Following his investment in the company, the shares have eroded over 60% of his investment.
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He increased his stake from 1.2% in March 2019 to 6.72% in December 2022.
Even after falling profits, his bet on the company can be explained as he’s known to grab stocks when they’re at rock bottom.
For the December quarter of 2022, Edelweiss Financial Services reported revenue growth of 13.5% year over year €EUR 21.4 billion, while net profit increased by 42.7% €1 billion
This earnings growth was due to an increase in net interest income.
For fiscal year 2023, the company plans to increase the company’s revenue by increasing the company’s investment quality.
The third stock on this list is Sunteck Realty.
Mohnish Pabrai holds a 6.68% stake in the Company, or 9.8 million (million) shares of Sunteck Realty, as of December 2022, per Sunteck Realty’s shareholder pattern.
Considering the company’s current market price of €304.3 as of March 10, 2023 the total value of Mohnish Pabrai in Sunteck Realty is around €2.9 billion
This is how its inventory has changed since March 2017.
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Since his investment in December 2021, the company’s shares are up over 118%.
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He increased his stake from 1.7% in March 2019 to 6.68% in December 2022.
This may be due to the uptrend in the real estate cycle since 2016 until the end of the first wave of the pandemic.
In fact, the pandemic has been a savior for this ailing real estate industry. It led to a paradigm shift in the attitudes of home buyers and restored the importance of home ownership.
For the quarter of December 2022, a 30.3% year-on-year decline in revenue was reported €893.3 m. Net income for the quarter was €111.1 million, down 81.4% year-on-year, due to rising interest rates.
This is because the rise in interest rates has also increased interest rates on home loans, making them more expensive for the borrower, reducing the affordability of buying a home and causing a liquidity crisis in the market.
In the coming quarters, the Company plans to commission the towers at Sunteck OneWorld and 4th Avenue SunteckCity.
However, the sector will also benefit from government initiatives such as Housing for All and the launch of RERA to increase transparency and boost homebuyer confidence.
Here you go. These were the three shares held by Mohnish Pabrai according to shareholding data filed with the stock exchanges.
Disclaimer: This article is for informational purposes only. It is not a stock recommendation and should not be treated as such.
