Narayana Murthy buys a stake in this small-cap multibagger stock with zero net debt
Company managed to generate an impressive Rs 48 crore in cash from operations during Q1FY24, excluding cash generated from working capital changes
When you think of Mr. Narayana Murthy, the iconic co-founder of Infosys, you instantly associate him with the tech giant that revolutionized the IT industry. However, there's a lesser-known facet of Mr. Murthy's endeavors that's equally fascinating and impactful. He's the driving force behind Catamaran Ventures, a silent catalyst for innovation and entrepreneurial growth in India.
Catamaran Ventures, led by Mr. Murthy, manages an impressive portfolio of over USD 1 billion across various asset classes. What sets Catamaran apart is its focus on investing in listed companies that cater to vast markets while maintaining impeccable corporate governance standards. This approach ensures resilience across economic cycles, a rare quality that elevates them in the investment world.
A recent development that caught the attention of keen-eyed investors and market enthusiasts was Catamaran Ventures' involvement in Gokaldas Exports Ltd (GEL), a Small-Cap company that's making some significant waves in the industry.
Gokaldas Exports Ltd is a powerhouse in the apparel export business, proudly representing India on a global stage. With more than 22 manufacturing facilities primarily situated in and around Bangalore, the company is in the midst of an expansion spree, driven by the robust demand conditions it currently enjoys. Its clientele boasts some of the most renowned brands in North America and Europe, and GEL serves their requirements across a diverse range of product categories.
What's truly captivating is Gokaldas Exports' stellar performance in the past year, where its stock price surged by a jaw-dropping 122 per cent, solidifying its status as a multibagger stock. Over the last five years, the company has recorded an impressive 47.7 per cent CAGR in profit growth. It's clear that GEL is not just keeping up with the industry; it's setting the pace.
It's particularly noteworthy that GEL managed to navigate through a challenging market landscape. During April - May 2023, major apparel-importing countries like the US, UK, and EU witnessed declines of 26 per cent, 23 per cent, and 19 per cent, respectively, compared to the previous year. India's exports during this quarter plummeted by 17.8 per cent year-on-year. The root cause lies in the excess inventory held by major brands, coupled with sluggish retail activity, which adversely impacted demand.
In the face of this adversity, Gokaldas Exports Ltd managed to generate an impressive Rs 48 crore in cash from operations during Q1FY24, excluding cash generated from working capital changes. This speaks volumes about the company's operational efficiency and adaptability. Their robust liquidity position ensures they have the means to meet their current obligations, even in challenging times. The company continues to be a ZERO NET DEBT company.
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Disclaimer: The article is for informational purposes only and not investment advice.