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Ashish Kacholia Portfolio Update: Fresh Entry in Two Consumption Plays

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Seasoned investor Ashish Kacholia has made fresh entries in two consumption-driven stories in the latest quarter ended June 2022. Kacholia invested a total of nearly INR60 crore in these two stocks for substantial shareholding above 1%. First among these to find a space in Ashish Kacholia portfolio is Barbeque-Nation Hospitality which brought IPO last year.

Barbeque-Nation Hospitality

Ashish Kacholia’s shareholding in restaurant chain was already revealed earlier and by the end of the quarter, the ace investor has accumulated 409,094 shares worth INR46.7 crore. These shares amount to 1.1% shareholding of the company. Interestingly, Jubilant Foodworks also has a substantial stake of 9.4% in the grill barbeque specialist.

Hit by the Covid-19 pandemic, the restaurant company posted a massive decline in revenues during the financial year 2021 while also posting a loss of INR112 crore. In the latest year ended March 2022, its sales recovered to post all time high of INR 861 crore but bottom line still remained in red. During FY 2022, Barbeque-Nation’s losses reduced to INR26 crore.

The company has Return on Capital Employed (ROCE) of 3.7% and trades at a Price to Sales multiple of 5. Both these multiples aren’t exactly compelling in terms of valuations, but this well-recognised brand is nicely placed to benefit from a consumption boom expected to take place in the coming years.

Inflame Appliances – Another Addition to Ashish Kacholia Portfolio

Consumption appears to be on top of Kacholia’s mind as he also made an entry in Inflame Appliances which specialises into manufacturing of cooktops, hobs and chimneys. The investor revealed a stake of 308,000 shares at the end of quarter ended 30 June 2022, according to the data published by Trendlyne. This amounts to 4.2% equity stake in the company which is quite substantial by any stretch.

The company has seen a massive increase in its stock price of nearly 10X in the last five years but the investor’s fresh stake reveals that there may be more growth in the offing. Its sales revenues have jumped 5X in the last five years justifying the surge in stock price. Nevertheless, its valuations are somewhat tricky with key return ratios of ROE and ROCE in negative territory. At the same time, its debt-to-equity ratio is also high at 4.5.

During the quarter, Ashish Kacholia portfolio also witnessed stake increases in his previous bets including Gravita India, Faze Three, La Opala and Fineotex Chemical.

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