Ashish Kacholia and his investment arm Himalaya Finance & Investment Company have invested heavily in a micro-cap company known as Universal Autofoundry. Ashish Kacholia bought 10.34 lakh shares worth Rs 16.7 crore at an average price of Rs 161.59 per share, Himalaya bought 10.34 lakh shares at an average price of Rs 168.49 per share.
The promoters of Universal Autofoundry were the sellers. Urmila Gupta sold 1.17 lakh shares at an average price of Rs 193.4 per share, Kishan Lal Gupta 1.77 lakh shares at an average price of Rs 193.4 per share, Payal Gupta sold 9.85 lakh shares at an average price of Rs 160 per share, and Amit Gupta 7.71 lakh shares at an average price of Rs 160 per share.
It appears that Kacholia invested in Universal Autofoundry on the basis that it is a proxy for the automobile sector.
In Q1 FY24, the company reported a 6.28% increase in profit for the quarter ended June 30, 2023, at Rs 3.55 crore, compared to Rs 3.34 crore during the corresponding quarter last year. Sequentially, profits were higher by 132%, compared to Rs 1.53 crore in the previous quarter. However, its revenues from operations fell 5.9% to Rs 57.55 crore, compared to Rs 61.17 crore last year.
Its total income stood at Rs 57.67 crore in the June quarter of the current financial year, down 5.78% year-on-year (YoY) as compared to Rs 61.21 crore in the same quarter of the previous financial year. On a quarter-on-quarter (QoQ) basis, total income fell 5.2% to Rs 60.2 crore in Q1 FY24 from Rs 60.83 crore in Q4 FY23.
On a year-to-date basis, Universal Autofoundry shares have delivered multibagger returns to its investors, as they have rallied nearly 130%. It has also surged over 90% in the last six months, while it jumped over 80% in just one week.
At present, there is great euphoria surrounding the stock because of the investment by Kacholia. Once the stock cools down, we can also consider taking a stake in it with a medium to long-term perspective.