Nemish Shah gains Rs 92,54,250 as his micro-cap holding jumps 20 per cent and hits the upper circuit!
The stock surged to a 20 per cent upper circuit limit and concurrently achieved a fresh 52-week high at Rs 137.15.
Mr. Nemish Shah stands as a prominent figure in the world of finance, co-founding ENAM, a distinguished investment house in India, in the year 1984. What began as a humble broking entity soon evolved into an investment banking powerhouse, and within a remarkably short span of six months, ENAM soared to the zenith of the IPO market. Since its inception, ENAM has played a pivotal role in orchestrating several esteemed IPOs in the country, solidifying its status as a premier financial institution.
At the heart of Mr. Shah's endeavors lies an unwavering passion for investment research. He is hailed as the trailblazer who introduced the concept of investment research to India at a time when it was a groundbreaking and innovative idea.
In a recent market development, Friday saw a remarkable resurgence after a tumultuous day of trading on Thursday. Amidst this resurgence, one remarkable feat that grabbed everyone's attention was the extraordinary ascent of Zodiac Clothing Company Ltd (ZCCL) on the stock exchange. The stock surged to a 20 per cent upper circuit limit and concurrently achieved a fresh 52-week high at Rs 137.15.
ZCCL traces its roots back to Mr. M. Y. Noorani, the visionary promoter who initiated the House of Zodiac as a partnership firm in 1954. The firm initially specialized in the production of neckties for men before expanding its horizons to exports in the 1960s and venturing into the branded shirt business, catering to the premium segment during the 1970s. The year 1984 marked the official incorporation of ZCCL, which currently operates in men's formal wear through its flagship brand, "Zodiac," as well as in the realm of party and club wear through its sub-brand, "ZOD!," and relaxed casual wear via its sub-brand, "Z3." These iconic brands are licensed by ZCCL from its group company, Metropolitan Trading Company (MTC), a partnership firm wholly owned by the promoters under a perpetual licensing arrangement. MTC levies a modest royalty of 1 per cent on the annual turnover generated by ZCCL.
A significant portion of ZCCL's turnover, over 60 per cent as of FY22, comes from the export of ready-made garments. The domestic branded business predominantly channels through exclusive brand outlets (EBOs) and multi-brand outlets (MBOs), with the company's stores spanning across 40 cities, primarily concentrated in tier-I cities, and extending into tier-II and III cities as well. The manufacturing facilities of ZCCL, engaged in cutting, stitching, washing, and pressing of fabric into apparel, are strategically located in Bengaluru, Karnataka, and Umbergaon, Gujarat, India.
With a market capitalization of Rs 356 crore, ZCCL falls under the category of micro-cap stocks. Now, connecting the dots between Mr. Nemish Shah and this remarkable stock, it comes to light that Mr. Shah holds a substantial 1.56 per cent stake in ZCCL, equating to 4.05 lakh shares. On the fateful Friday trading session, the stock surged by Rs 22.85, catapulting Mr. Nemish Shah's gains to a staggering Rs 92,54,250 in a single day—an impressive testament to his astute investment acumen.
The company's stellar performance can be attributed to a confluence of factors. Operating performance and key ratios received a favorable boost, partly due to activities generated and the divestment of an investment property, resulting in reduced debt and lower cost of funds. Additionally, consumer demand exhibited an encouraging upswing, both internationally in the Americas and within India's branded business, notably in the e-commerce channel. Stringent cost management measures further positively impacted operating results and EBITDA.
In line with the company's strategic vision, 9 new stores were opened, and an additional 16 are slated to make their debut before the close of the calendar year, underscoring ZCCL's commitment to bolstering its retail presence alongside its flourishing web-based operations. Notably, Zodiac remains at the forefront of sustainability initiatives in its industry, boasting manufacturing facilities meticulously engineered to minimize their environmental footprint.
Disclaimer: The article is for informational purposes only and not investment advice.