Ace investor and one of the Warren Buffetts of India, Vijay Kedia recently said in an interview that he has seen a fundamental shift in the Indian Market’s behaviour, as now bull markets are lasting longer while bear markets are getting shorter.
Kedia who has seen his portfolio lose over Rs 600 cr since the beginning of October 2024, also said that the markets are in a consolidation mode, and he does not rule out the possibility of further consolidation. The market volatility he said was a normal trend and the pains may be temporary.
And it makes sense to believe him as he has trusted many stocks over the years to beat such odds. In fact, there are two stocks that he has trusted for a decade and would still not sell them even in these markets. Both these favourites of Kedia are trading at big discounts.
Let us see what these stocks have in them to hold Kedia’s attention and money for a decade.
Atul Auto Ltd was incorporated in 1986 as a private limited and was converted to a public ltd in 1994. The company’s core business is manufacturing and sales of three-wheeler automobiles and spare parts. It provides after-sales support to the customers through the dealership network.
With a market cap of Rs 1,299 cr, AAL has 5% of the domestic market share and 3% of the overall market share in the three-wheeler industry.
Ace investor or as we like to call them, one of the Warren Buffets of India, Vijay Kedia, has been holding a stake in the company since December 2015 (since records were available on Trendlyne.com), either individually or through his company. As of the quarter ending in December 2024, he holds 2.71% stake in AAL through his company Kedia Securities Pvt Ltd and 18.20% stake in individual capacity.
That’s over 20% holding in the company, which speaks volumes about the trust Kedia has on AAL.
Now if we look at the financials, the questions of why Kedia has been holding this stock still even today just get bigger.
The company’s sales dropped form Rs 667 in FY19 to Rs 527 in FY24. That is a drop of 21%. And between April and December 2024, the company has logged in sales of Rs 511 cr already.
The EBITDA (earnings before interest, taxes, depreciation, and amortization) for AAL has also dropped by almost half from Rs 81 cr in FY19 to Rs 40 cr in FY24. And between April and December 2024, Rs 37 cr is already logged in as operating profits.
As for net profits, AAL has seen a drop that could shake the trust of even the most loyal investors. From Rs 55 cr in FY19 to Rs 7 cr in FY24.
However, between April and December 2024, the Net profits are at almost Rs 12.5 cr, which is about 79% jump on the previous fiscal year already.
It might seem like a turnaround story if we look at the net profits.
The share price of AAL has seen a jump of about 212% from Rs 150 in March 2020 to its price as on closing on 21st March 2025, which is Rs 468.
The all-time high price of the stock is Rs 844, so the current share price is a 44% discount on its all-time high price.
The company’s share is trading at a current PE of 75x, which is amongst the highest in the category and the industry median is 30x. The 10-year median PE for AAL is close to 26x while the industry median for the same period is 20x.
In 2023, the company also ventured into the electric space by introducing two electric three-wheelers, Atul Mobili & Atul Energie.
In the last annual report, the new Managing Director, Neeraj Chandra said, “Green energy is the future, and Atul Auto is ready to spearhead this revolution in the three-wheeler auto industry across the globe.”
Incorporated in 1993, Repro India Ltd is in the business of Printing of Books and Reproduction of recorded media. The company offers a full suite of print services to publishers and businesses, going beyond just printing. They handle everything from creative design and pre-press work, to binding, warehousing, and shipping. They also do digital printing and print-on-demand.
With a market cap of Rs 622 cr, Repro has clientele like Cambridge University Press, Oxford University Press, Taylor & Francis Macmillan Publishers, Penguin Publishing India Pvt Ltd, etc.
The company also has a relationship with key e-commerce players such as Amazon, Flipkart, JIO, Meesho, First Cry and Snapdeal for their Digital printing needs.
Kedia has held a stake in RIL at least since December 2015 (since records were available), per Trendlyne.com. Currently he holds 6.33% worth Rs 39.4 cr for the quarter ending December 2024.
Apart for Vijay Kedia, another Warren Buffet of India, Madhusudan Kela also holds 3.32% stake in RIL as per the exchange filings filed for the quarter ending December 2024.
The sales for Repro have seen a compound growth of 4% in the last 5 years as it jumped from Rs 399 cr in FY19 to Rs 479 in FY24. Also, between April and December 2024, the company has recorded sales of Rs 343 cr.
EBITDA grew from Rs 45 cr in FY19 to Rs 52 cr in FY24, logging in a compound growth of almost 3%. And for the period of the 3 quarters between April and December 2024, it has logged Rs 23.4 cr in EBITDA.
The net profit seems like an area of concern, as between FY19 and FY24, it dropped by 50% from Rs 24 cr to Rs 12 cr. For the quarters between April and December 2024, the company has recorded losses of over 3 cr.
Repro’s share price was Rs 320 in March 2020 and as on the market closing I 21st March 2025, the share was trading at Rs 434, which is a 35% jump.
However, the current price of Rs 434 is a huge 56% discount for the stocks all-time high price of Rs 994 which it hit in December 2023.
Repro’s PE is currently in the negative so not available on screener.in. However, the industry median when compared to peers from the same sector is around 18x. The 10-Year median PE for Repro is 45x while the industry median for the same period is 23x.
In the company’s last Annual Report for FY24, the company’s Chairman Vinod Vora said that the company is at an inflection point of growth due to multiple strategies.
He said, “The Integrated Solution has enabled us to pivot from the traditional cyclical service model to the secular and scalable distribution model. Import Substitution for multinationals enables publishers to increase revenues and offer more titles. Data driven analytics helps predict demand and Bookscapes enhances the book buying experience. The setting up of multiple production mini pods across India, closer to the customer, further drives efficiencies. With these strategies aligned, our infrastructure and investments in place, we are today poised at the inflection point of growth.”
The 10 Year Long Kedia Grip
The Warren Buffet of India, Vijay Kedia is known for his small and midcap picks, as most of many of them end up going big and making Kedia a boatload of money. So, when he picks smaller companies, it turns heads in the investor circles.
But things get more serious when he picks two less known small companies like Atul Auto Ltd and Repro India Ltd and holds them across market cycles for 10 years. What is it in these companies that Kedia sees and trusts it, which the common trader is probably missing. Especially given the profits for RIL look like a concern.
Which way will these two companies go and what they do with its investors, only time will tell. It would be a wise decision to add these companies to the watchlist, given that it is trusted by not one but 2 Warren Buffets of India.
Disclaimer:
Note: We have relied on data from www.Screener.in and www.trendlyne.com throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.
The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Suhel Khan has been a passionate follower of the markets for over a decade. During this period, He was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.
Disclosure: The writer and his dependents do not hold the stocks discussed in this article.
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