Many retail investors closely track the holdings of ace investors like Dolly Khanna. The main idea behind this strategy is to look at their buying and selling activity and learn from their strategies. These stocks are then added to their watchlists for further analysis.
Dolly Khanna is a Chennai-based investor who started her investment journey in 1996. Her portfolio is managed by her husband Rajiv Khanna and it typically leans towards manufacturing, textile, chemicals and sugar stocks.
Here are the top 3 holdings in her portfolio, sorted according to their value:
Chennai Petroleum Corporation Limited (CPCL)
Chennai Petroleum Corporation is a downstream energy company and a part of the leading Indian Oil Corporation (IOC) Group. It is a small-cap stock with a market capitalization of ₹ 3,525 crore and its shares were trading at ₹ 237.10 apiece at 11:40 AM on Thursday.
Dolly Khanna holds a 2.2% stake as per the holdings for the October to December quarter of 2022. She has 32,76,408 shares in the company and her holdings are worth ₹ 76.9 crores as of Thursday.
The stock, however, did not rally as much after the ace investor bought a stake in June 2022. In fact, its share price has fallen by nearly 31% since then. This fall could be attributed to a 37.53% fall in the company’s net profit on a year-on-year (YoY) basis. The ongoing Russia-Ukraine war and accompanying inflationary pressures kept the oil and gas industry under pressure. Moreover, the government introduced a windfall tax that negatively impacted the industry.
CPCL has an excellent return on equity of 58.81% and very high earnings per share of ₹ 236.43. The company’s shares were trading at a price-to-earnings ratio of 1.00, which is significantly lower than the industry P/E of 5.56, indicating that it might be undervalued as compared to its peers.
KCP Ltd
The second stock on the List is KCP Ltd., a company that is engaged in the business of manufacture and sale of cement, sugar, heavy engineering, power generation for captive use and hospitality. It is a small-cap stock with a market capitalization of ₹ 1,252 crores and its shares were trading at ₹ 97.20 apiece on Thursday’s early deals.
Dolly Khanna holds a 2.4% stake in the company, as per the latest shareholding pattern. She holds 31,33,926 shares in the company and her holdings are worth ₹ 30.5 crores.
She initially bought the shares in September 2020 and increased her stake to 4.3% in June 2021. However, she has been continuously reducing her stake since then. This could be due to the fall in the profits of the company.
KCP Ltd had reported a net profit of 17.26 Million in the quarter that ended December 31 2021, however, it reported a loss of 7.80 crores in the quarter that ended December 31, 2022. The fall in the company’s profit was mainly due to the increase in raw materials expense of the company, which impacted the overall cost of production.
KCP Limited has a return on equity of 17.31%, and an ideal debt-to-equity ratio of 0.44. The company’s shares were trading at a price-to-earnings ratio of 25.34, which is higher than the industry P/E of 18.41, indicating that its shares might be overvalued as compared to its peers.
Monte Carlo Fashions
The company manufactures designer woollen/cotton readymade apparel under its brand Monte Carlo, which has also been recognized as a superbrand. It is a small-cap company with a market capitalization of ₹ 1498 crores and its shares were trading at ₹ 583.00 levels.
Dolly Khanna holds a 2.5% stake in the company. She has 5,26,356 shares and her holdings in the company are worth ₹ 30.7 crores.
The company reported 12.48% YoY growth in its revenue from ₹ 461.87 million reported in December 2021 to ₹ 519.54 crores in December 2022. Its net profit increased by 11.44% from ₹ 77.45 Million to ₹ 86.31 Million during the same period. The growth in revenue was on the back of end-of-season sales and encouraging festive and wedding season across India.
Monte Carlo Fashions has a return on equity of 17.65%, a dividend yield of 3.46% and an ideal debt-to-equity ratio of 0.55. Its shares are trading at a price-to-earnings ratio of 1.74, which is higher than the industry average of 62.04, indicating that the stock might be overvalued as compared to its peers.
Nitin Spinners, Pondy Oxides & Chemicals, Mangalore Chemicals & Fertilizer, Prakash Pipes and Control Print are a few other stocks that form the top holdings of Dolly Khanna.
Written by Simran Bafna
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