29 year old IITian value investor Makes 1500%- Here is how he did it.

Stock market has not seen a good news from last 1 year. Even though, Index is down insignificantly, Pain is individual stocks is visible across all the sectors and Hot names

There are few people who are counting on that and in-fact doing consistently good due to market cycles which happens every 2-3 years.

Nikhil Gangil, (Founder, intrinsic Value equity and smallcase manager) is one of those people who practice in the arena of cyclical investing and make money when focus of market shifts from one sector to another. Nikhil ,a cyclical investor is also an IIT madras Alumni and a structural engineer.

In an interaction with financial express, Gangil talked about his Top winners that include his first multibagger of 2023, a microcap called K&R rail which delivered him 1500% returns in 2.5 years 

Did he knew that railway theme is coming? Gangil says No.

But he did knew in 2020 that infra and specially Railway Infra stocks are very cheap, he bought the stock at 17,13 and avg it at 9.6 . He exited the same at 150.2 when railway infra became a visible theme, Finance minister also talked about it in Budget and he had already made 16X.

Earlier also in 2022 Nikhil’s stock Sawaca Business Machines delivered him 68 times or 6,700 per cent, return from the average down price.

the young investor said stocks like Meghmani Finechem delivered him 15 times returns (1400%) in 2022 Along with that Tata Power (6.5 times), Tata Motors (6.5 times), GNA Axles (5.8 times), Ramco System (5 times), Powermech projects (5.1 times), Nava (5.2 times), Marathon Nextgen Realty (4.4 times), Tejas Networks (4.5 times) and Fiem Industries (4.8 times).

what is cyclical shift in market?

Gangil explains this as “Market has a tendency to shift its focus from Hot Overvalued Stocks to Ice-cold Undervalued stocks, It has happened again and again for us to believe that it is true. So you turn as many stones as you can to find out the themes and stocks that have good fundamental and very very cheap valuations and you Buy and HOLD”

Gangil focuses on Basic Fundamental parameters like Profits, Cashflow, Networth and ROCE to calculate the Quality aspect of business and he buys it at MINIMUM INTRINSIC VALUE

Interesting to note ,he doesn’t calculate intrinsic value, but Min intrinsic Value i.e. the minimum possible value of stock given the fundamentals. He also calculates the Max intrinsic Value to find out the Target Exit price. 

Nikhil’s Smallcase is one of the best performing smallcase giving more than 22% CAGR over the last year. Recommendation service is providing 28% CAGR after this correction of Jan and Feb. In dec 22, the Peak performance was 42% of his recommendation service.

Gangil is currently looking at below sectors to find undervalued quality stocks

1. Generic Pharma -
2. Telecom revival + 5G-
3. Bank and NBFC-
4. Traditional Battery & Lubricant stocks-
5. Construction and infra- 

Gangil likes to find new opportunities in market, travel, read and watching movies in his leisure time.