Best Stocks from RK Damani Portfolio: Investing in the stock market can be a daunting task, due to the large number of stocks available to choose from. To simplify things, many investors follow the portfolio of successful investors like RK Damani, who amassed wealth through equity investments.
In this article, we will take a closer look at the Best Stocks of RK Damani Portfolio and analyze their business, financials and more.
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Who is RK Damani?
RK Damani is one of India’s most successful investors also known to have mentored ace investor Rakesh Jhunjhunwala.
The ace investor started his career as a stockbroker after dropping out of college. Later, he started investing in the market as he realized that they could earn real money.
RK Damani witnessed a major increase in his wealth in a short order when the Harshad Mehta Scam made the headlines in 1992. He later moved on to Entrepreneurship and founded his own hypermarket chain, DMart.
The investor rose to the top with the issue of the DMart IPO, which was a huge success. This success made him one of the richest men in India.
According to the March filings, RK Damani publicly holds 14 shares with a net worth of around ₹ 1,74,805.9 Crore as on November 23, 2023.
5 Best Stocks from RK Damani Portfolio
We will now look at the 5 Best Stocks in RK Damani Portfolio based on the highest stakes he held since the September quarter, FY24.
1. Avenue Supermarts Ltd
Popularly known as Dmart, Avenue Supermarts was founded in 2002 by RK Damani himself. The company is a one-stop supermarket chain that offers a wide range of basic household and personal products under one roof to its customers.
Each of the company’s stores stocks home utility products – including food, beauty products, toiletries, clothing, kitchenware, bed and bath towels, home appliances and more – available at competitive prices.
During its launch, the company set up its first store at Powai. Currently, it has established its stores in 337 locations across Maharashtra, Andhra Pradesh, Gujarat, Madhya Pradesh, Karnataka, Telangana, Chhattisgarh, NCR, Tamil Nadu, Punjab and Rajasthan.
If we look at the financials of the company, we can see that it has a net income of ₹ 42,839.56 Crore and a net profit of ₹ 2,378.34 Crore.
The 4-year CAGR for sales and net profit stood at 20.97% and 27.41%, respectively. This indicates a steady growth in the overall performance of the company.
The company’s RoCE and RoE stood at 16.03% and 21.02% respectively. These figures suggest that the company has given a good return to the shareholders’ equity and has also used the company’s resources effectively.
Notably, the company maintains a debt-to-equity ratio of zero, signifying its reliance on internal funds for operations.
As of Q2FY24, RK Dhamani holds 67.20% stake in the company. This stock accounts for 43,74,44,720 shares and is worth Rs.166,229.0 Crores till November 20, 2023.
2. VST Industries Ltd
VST Industries was founded in 1930 and is a subsidiary of British American Tobacco (BAT). Its business is the sale of tobacco products and related goods.
The Company has sales in India and outside India. Its products include cigarettes, unmanufactured tobacco, cut tobacco and other articles of paper and paper. The company’s manufacturing facility is located at Hyderabad in Andhra Pradesh.
The company’s portfolio consists of several well-known brands such as Charminar, Charminar Special Filter, Charms Mini Kings, Charms Virginia Filter, XL Filter, and Shaan. These products cater to the lower end of the market and enjoy a significant market share in the micro-segment of small cigarettes (less than 60mm).
If we look at the financial performance of the company, it reported a net income of ₹ 1,292.44 crore and a net profit of ₹ 326.98 crore in FY23.
Over the last four years, their sales and the company’s profits have grown at a CAGR of 4.14% and 9.57%, respectively.
The company has an ROE of 29.06% and a RoCE of 38.06%, respectively. This indicates optimal return to shareholders and efficient use of company resources.
In addition, the company has zero debt suggesting that it operates primarily using its own funds.
As of the September quarter of FY24, the ace investor owns 4,741,720 shares, which accounts for 30.70% of this company. These shares are worth Rs.1,515.9 crore as on November 20, 2023.
3. Advani Hotels & Resorts (India) Ltd
Established in 1987, Advani Hotels & Resorts (India) Limited is engaged in the hospitality industry, offering short-term accommodation and restaurant and mobile catering services.
The company operates primarily through its Caravela Beach Resort located in South Goa. This resort is a luxurious five-star establishment that spans 24 acres and includes 192 rooms, 4 Suites and 6 Villas, each with private balconies.
The resort provides various types of accommodation, including garden view rooms, pool/ocean view rooms, ocean front view rooms, luxury suites, family villas and presidential villas.
For dining, guests can enjoy a variety of options at the resort, such as Castaways, Beach Hut, Carnaval, Sunset Bar, Island Bar, Atrium Bar, Lanai and Cafe Cascada. The company also offers various activities and amenities such as golf course, swimming pools, spa, yoga sessions, gym and live music performances to enhance the guest experience.
Coming to the company’s financials, we can see that the company reported net sales of ₹ 98.49 crore and net profit of ₹ 28.6 crore as of FY23.
This gives the company a remarkable 4-year CAGR growth of 8.86% and 25.94% on sales and net profits respectively.
In terms of efficiency, the company shows a strong performance with a RoE of 50.82% and a RoE of 67.76%, which are the highest among the list and mean an exceptionally efficient use of company resources.
Additionally, the company maintains a low debt-to-equity ratio of 0.01, indicating reliance on its own funds to operate its business.
The ace investor consistently held 4.2% of the company over the past few quarters. This stake accounts for 19,30,009 shares and is worth Rs. 20.7 crores till November 20, 2023.
4. Aptech Ltd
Aptech Ltd. is a pioneer in the informal vocational training business with over three decades of strong experience in vocational skill and informal academic curriculum-based training programs. With a significant global presence, Aptech Ltd. has left its mark in more than 800 centers worldwide since its inception in 1986.
The company has diversified its portfolio into various sectors such as IT training, media & entertainment, retail & aviation, beauty & wellness, banking & finance, and pre-school education.
It has successfully trained students, professionals, universities and corporates through its two main streams of business – Individual Training and Enterprise Business Group.
In addition, it also offers online training through ProAlley, specializing in graphic design, animation, VFX and game design.
In the fiscal year 2023, the company recorded a net income of ₹ 456.92 Crore, accompanied by a net profit of ₹ 67.69 Crore.
Over the last four years, the company has achieved an impressive CAGR of 21.66% and 38.83% on net revenues and profits, respectively.
In FY23, the company is debt free. Additionally, RoE of 29.3% and RoCE of 35.63% suggest that the company has given an excellent return on shareholders’ capital and has also used its resources efficiently.
Over the last few quarters, the ace investor has continuously held a 3% position in the business. As on November 20, 2023, the value of this 17,57,317 equity share is Rs. 43.8 crores.
5. Sundaram Finance
Sundaram Finance, founded in 1954, is one of the leading names in the NBFC sector. It is a prominent member of the TSF group and was founded by Sri TS Santhanam.
The company started with an aim to finance the purchase of commercial vehicles, the company today has grown into one of the most trusted financial services groups in India.
Currently, it has a broad presence in Mutual Funds, General Insurance, Housing Finance, IT, Business Process Outsourcing and Retail Distribution of a wide array of financial services and products.
It has a presence of nearly 1000 branches, more than 2 lakh depositors, and 3 lakh commercial vehicle and auto finance customers across the nation.
If we look at the bank’s financials, we can see that its income from the interest earned has increased from ₹ 3418.17 crore in FY19 to ₹ 4110.20 crore in FY23.
On the other hand, it reported a decline in net profit from ₹ 1126.31 crore in FY19 to ₹ 1088.31 crore in FY23.
For FY23, the company reported a GNPA of 2.10%, which indicates the portion of the NBFC loans or assets that are non-performing.
Coming to the return ratios, the bank reported ROE and ROA of 14.9% and 2.8% respectively. This suggests that the company has earned a good return on the shareholders’ capital and effectively used its assets to earn income.
The ace investor consistently held 2.4% of the company over the past few quarters. This stock accounts for 26,30,434 shares and is worth Rs.852.4 crores till November 20, 2023.
List of Best Stocks from RK Damani Portfolio
The table below brings together more such stocks from RK Damani Portfolio along with those covered above.
In Closing
As we conclude our article on “Best Stocks of RK Damani Portfolio”, it is important to note that the top 5 stocks mentioned above are based on the highest investment of the investors in the company.
It is also worth noting that the exact time and price at which they acquired their shares is often disclosed to the public. This can lead to a situation where we may invest in fundamentally sound stock but at an unfavorable price, potentially affecting our overall performance.
Thus, investors should do their own analysis and not invest in these stocks only based on the investment of ace investors.
Written by Aaron Vas
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