A close look at the holdings of Bakshi’s ValueQuest India Moat Fund gives some idea where the ‘Fundoo Professor’ expects moat to create value.
There are seven stocks where Bakshi’s fund held over 1 per cent stake as per December quarter shareholding data. Notable among them were a 4.5 per cent stake in Ambika Cotton MillsNSE -1.12 %, 3.20 per cent in Accelya Kale Solutions and 2 per cent in TVS SrichakraNSE -1.96 %.
Ambika Cotton Mills manufactures specialty cotton yarn to textile mills and windmills. The company’s bottomline has grown over 10 per cent CAGR over the past five years till FY18.
Accelya Kale Solutions provides software, consultancy and related services to airline and travel industries globally. The company saw its bottomline grow to Rs 89.20 crore in FY18 from Rs 84.40 crore in FY13 as sales rose to Rs 381 crore from Rs 298 in the same period.
TVS Srichakra is engaged in manufacture of tyres and tubes. The company reported Rs 116.10 crore profit for FY18 against Rs 27.20 crore in FY13. Sales jumped to Rs 2,202 crore from Rs 1,646 crore during this period.
ValueQuest India Moat Fund is an offshore fund, which specialises in making long-term investment in high-quality businesses (‘moats’) at attractive valuations.
When contacted, Bakshi didn’t comment on his holdings, as SEC rules do not allow fund managers to speak about investments in public.
Among its other holdings, ValueQuest held 2 per cent stake in Bidadi, Bangalore-based amusement park operator Wonderla Holidays, 1.80 per cent in coffee powder manufacturer CCL ProductsNSE -0.18 % (India), 1.30 per cent in Cello furniture maker Wim Plast and 1.20 per cent in multi-speciality hospital chain Narayana Hrudayalaya as of December 31.
Like most other funds, many of the stocks in Bakshi’s portfolio also witnessed severe beating all through last year with Wim Plast falling 51 per cent, and TVS Srichakra, Narayana Hrudayalaya and Accelya Kale Solutions tanking over 30 per cent each. Ambika Cotton Mills and CCL Products slipped 13 per cent and 10 per cent, respectively, in 2018.
The fund has been holding CCL Products since September 2016 and increased its stake to 1.80 per cent from 1.40 per cent during December quarter.
Ambika Cotton Mills has been a part of the ValueQuest portfolio since March 2015 and the stock has more than doubled ever since. The scrip hit a high of Rs 1,716 in January 2018. ValueQuest has raised stake in the company gradually from 2.10 per cent in March 2015 to 4.50 per cent at present.
Shares of Wim Plast have fallen over 20 per cent ever since ValueQuest started figuring among the shareholders holding 1 per cent or more. The stock rose 70 per cent between June, 2015 and January, 2018, but witnessed strong selling pressure throughout last year.
The last calendar remained highly volatile for the Indian equity market, as over 80 per cent of the BSE-listed stocks wiped off investors’ wealth. BSE Smallcap and Midcap indices cracked 24 per cent and 13 per cent, respectively, during the year while BSE Sensex managed to eke out about 6 per cent gain.