The Worst Mistakes Made By Porinju Veliyath’s Ambit Capital

Porinju Veliyath

Admitting its blunders in the last 12 months, research and brokerage firm Ambit Capital has come out with a latest report which includes names such as Radhakrishnan Damani-led Avenue Supermarts, Jubilant Foodworks and Bajaj Finance.

Shares of Avenue Supermarts, which runs the D-Mart chain closed at Rs 1,606.1, up by more than 0.7% this afternoon.

Admitting its bloopers in the last 12 months, research and brokerage firm Ambit Capital has come out with a latest report which includes names such as Radhakrishnan Damani-led Avenue Supermarts, Jubilant Foodworks and Bajaj Finance. Notably, the firm had a sell call on the shares of D-Mart. The shares crossed the Rs 1 lakh crore market capitalisation yesterday, multiplying investor wealth by more than 5 times in the last 15 months.

D-Mart and the missed bus to Indias best grocery retailer: Despite the best pre-IPO research (management said so too!), we initiated with a SELL; the stock is up 35 per cent since then, Ambit Capital said in the note. Shares of Avenue Supermarts, which runs the D-Mart chain closed at Rs 1,606.1, up by more than 0.7% this afternoon. Apart from D-Mart prominent stocks such as Bajaj Finance and Jubilant Foodworks also form part of the list.

Bajaj Finance and our refusal to learn: It has delivered a 4-year CAGR (compounded annual growth rate) of 70 percent; were sellers throughout. Growth at the cost of asset quality thesis is yet to play out, said the firm. Notably, Bajaj Finance shares have risen by more than 150% in the last one year, and closed at Rs 2,263 on BSE this afternoon.

Another stellar performer in the last 12 months has been Jubilant Foodworks- India exclusive franchisee of Dominos Pizza. Jubilant Foodworks and the lowest target price on the street: Stellar same store growth (SSG) growth and margin expansion. The stock gained 175% in 12 months. Confession: It is the best performing stock in our coverage, Ambit Capital said in the release.

The firm has got many buy calls wrong too. Featuring in the list of buys gone wrong are the shares of Tata Power, VA Tech Wabag and PI Industries. VA Tech Wabag, DB Corp and Greaves Cotton: Stocks that we love that no one else cares about. Each is down more than 20%, Ambit Capital said in the note. Notably, ace investor Porinju Veliyath had recently pointed out that Va Tech Wabag looks attractive.

 

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