Vijay Kedia: Betting on good R&D! Vijay Kedia shows the way & makes a killing

NEW DELHI: If an organization is investing closely on R&D time and again, does it make sense to purchase its inventory?

Seasoned investor Vijay Kedia entered Tejas Networks final 12 months, and the scrip has since develop into one in every of his prime three fairness bets.

Explaining his investing thesis for the inventory, the Dalal Street veteran says Tejas is amongst a number of firms, which spend about 10 per cent of their revenues on analysis and growth.

“Inform me one firm in India you realize that spends say 10 per cent of its income yearly, 12 months on 12 months in R&D. Tejas is one in every of such firms,” Kedia instructed ETNOW throughout an interview. He hastened so as to add his view is just not a suggestion to purchase the inventory.

Kedia purchased the inventory within the Rs 40-60 vary.

On Friday, the scrip traded at Rs 137 on BSE, up 246 per cent from the value at which Kedia began shopping for the inventory. Even at Rs 60 apiece, his funding made him 130 per cent returns.

Can one nonetheless purchase it? “I can’t say if you should buy Tejas at Rs 110 or Rs 120 or Rs 130. Please do your homework,” Kedia stated.

Tejas has been spending 10 per cent of its income on R&D and has to this point invested greater than Rs 1,200-1,300 crore on it this far.

In June-July, the inventory was out there at a market-cap of Rs 400-500 crore and the corporate had Rs 300 crore money within the financial institution.

“They’ve developed a product — it takes time – which you can’t construct in a rush if it’s a must to compete with Nokia or Ericsson or Huawei. That is what Tejas is doing. It takes time, as a result of in India R&D spends are very low. They’re nothing in contrast with what worldwide firms are doing,” Kedia stated.

He stated the product that Tejas has developed is utilized in fibre-to-home and 3G, 4G and 5G companies. “They’ve good technical information and are competing with all Fortune 500 and Fortune 50 firms on the earth. Due to Atmanirbhar, Mr Modi’s imaginative and prescient of India, the time has come to take a look at such firms. That’s the reason I’ve purchased the inventory. I could go flawed, I have no idea,” he stated.

Knowledge confirmed shares of Tejas Networks have risen 385 per cent from their 52-week low of Rs 28.50 hit in Could, 2020.

Kedia was first seen getting into Tejas within the June quarter with a 1.52 per cent stake buy. By the top of September quarter, he elevated his holding to 4.21 per cent. The corporate is but to report December quarter shareholding knowledge.

“In April and Could, I many sleepless nights and I assumed the world had come to an finish. I had simply 5-6 per cent in liquid money. I offered some shares at no matter value. After that I didn’t purchase something significant in amount. I purchased perhaps Ramco Systems and Tejas and a few NIIT. However that was at very low costs. Mind Design, once more, was one other inventory I purchased at a really low value. Now, they’ve gone up from my shopping for costs. So, please watch out and don’t purchase along with your eyes shut. Do your homework,” he instructed ETNOW.

Tejas is just not a extensively tracked inventory and had only one ‘outperform’ ranking as per publicly out there Reuters Eikon database as of Wednesday, January 6.

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