Ashish Kacholia ups stake in this multibagger smallcap stock; should you buy now?

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Market veteran and well-known stock picker Ashish Kacholia lapped up additional 1.41 lakh shares of Garware Hi-Tech Films (GHFL) at Rs 1,005 per share in a bulk deal on Thursday. Earlier, he had a 2.58% stake in the company as of June 30. Shares of the company opened 5% higher at Rs 1058.40 on the BSE.

Garware Hi-Tech Films (formerly Garware Polyester) is the flagship company of the Garware Group and a leading player in specialty polyester films in the country. Of late, the net profit of the company reported 163% growth in net profit at Rs 35.83 crore for the quarter ended June 30. It had reported a profit of Rs 13.61 crore in the same quarter last year. Revenue of the company increased by 80% YoY to Rs 169.44 crore.

EBITDA for the quarter stood at Rs 65.86 crore against Rs 30.88 crore in Q1FY21, reflecting a 21.56% EBITDA margin. “EBITDA margin up by 334 basis points on YoY basis due to increase in revenue including specialty products,” Garware Hi-Tech Films said in a release.

“The company’s performance in the first quarter was robust across all financial metrics,” said Monika Garware, vice-chairperson and joint managing director, GHFL. “As the markets are opening up, we hope to maintain the growth momentum. We continue to put efforts into growing our revenue share through exports, which witnessed a growth of 76% in Q1 on a YoY basis. Consistent improvement in our operating metrics reflects our relentless rigour of execution and our increased focus towards niche high margin specialty products, which has resulted in PBDT margin reaching 20.1% in Q1FY22,” she said.

Garware further added that the outlook for the rest of the year is promising with an anticipated incremental revenue contribution from the newly launched PPF line. “Given the current visibility and a promising demand landscape, we foresee better times for us going ahead helping us realize our growth aspirations,” Garware added.

Shares of the company have delivered more than 600% return to investors since March 2020 lows. Overall, Kacholia held more than 20 stocks in his portfolio as of June 30. This included companies like Mastek, Vaibhav Global, Poly Medicure, Birlasoft, Apollo Tricoat, Shaily Engineering, Phillip Carbon Black, IOL Chemicals and Pharmaceuticals, HLE Glascoat and DFM Foods, among others.