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This is the 13th post in our quarterly result update series for Q4FY21.

In this post, we’re sharing the latest updates of the stocks from our watchlist. Please don’t treat this as a buy recommendation. We find these businesses interesting and we may build position (or buy more of those that are already in our portfolio) in them in the future. The purpose of this post is to bring clarity to our understanding of the businesses we are tracking.  We make our notes on the quarterly results and conference calls. Putting it up here makes it easier for us to refer them at a future date.

You can see the earlier updates here.

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Please click on the read more button for more details on each stock.


Angel Broking Ltd

FY21 was a phenomenal year for Angel with gross client addition of over 300% YoY and a rise in equity market share to over 20% from 6.9% a year ago. The company has made good inroads in sourcing customers through the internet through social media and search engines which has seen them acquire >90% of customers in Q4 from Tier 2& 3 regions with an average age of 30 years only. Angel also has big plans to launch its super app to offer a variety of financial services from mutual funds to insurance and transform itself into a fintech powerhouse in the next 6-7 years. It remains to be seen whether Angel will be able to maintain its growth momentum amidst the highly competitive space with seemingly everyone in the financial sector from traditional banks like HDFC Bank & NBFCs like Bajaj Finance to fintech unicorns like Paytm & Zerodha looking to get a slice of the pie and go a similar way to become fintech giants. Nonetheless, given the sustained momentum Angel has in this crowded space and the history of successful pivots along with the vision of the new tech-oriented CEO, Angel Broking may prove to be a reliable bet in the ever-rising fintech space.

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BSE Limited

BSE had a decent quarter with rising volumes in all segments especially the commodity segment which has risen 13x in FY21. However, BSE Star saw a revenue decline of 24% in FY21 due to lowering of transaction costs on the platform despite a transaction volume rise of 59% YoY. The company is doing well to continue to expand its strength in the equity and commodity derivatives space and continue the growth momentum of BSE Star. The company is still looking for opportunities for value unlocking for BSE Star and has also received a few bids from investors. BSE’s venture into power exchange Pranurja has also gotten CERC approval and is expected to launch in the next 3 months. It remains to be seen how the company will get value unlocking from BSE Star and whether it will be able to exercise any pricing power on the platform & how will it handle the trio of new growth businesses going forward. Nonetheless, given the company’s long-standing brand value and its market execution experience, and the potential of its new businesses, BSE can turn out to be a dark horse wealth creator in the next few years.

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Manappuram Finance

The company’s current quarter performance has been mixed with 0.74% YoY revenue growth & 18% PAT growth. Gold AUM fell 5.6% QoQ mainly due to a 12% drop in gold prices. The company saw a good revival in Asirvad and collections have improved to 101% in March before falling 7-8% afterward due to the 2nd wave of COVID. The vehicle finance division has also come back strong and posted collections around 113% in March before declining in FY22 due to the 2nd wave of COVID. It remains to be seen whether the company will be able to sustain its growth momentum in the gold loan space with falling gold prices and how will things pan out for Asirvad and the MFI industry given the accelerated upcoming waves of COVID. Nonetheless, given the company’s resilient customer base and gold loan AUM along with the rising star among MFIs in Asirvad Microfinance, Manappuram Finance seems like a pivotal finance stock to watch out for.

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Stove Kraft Ltd

Stove Kraft has seen a good Q4 post the IPO in Feb with 28% YoY revenue growth in FY21 and PAT of Rs 81 Cr vs Rs 3 Cr last year. The company has also seen a good contribution of almost 30% from ecommerce which is a long way above the industry average of 10%. The company is also seeing good demand from export orders with an order book of Rs 130+ Cr. But the company’s manufacturing was stalled somewhat by the 2nd wave of COVID with May manufacturing at only 50% capacity to serve ecommerce and export demand. It remains to be seen how the company will be able to face off against big-name competitors with historic brands like Hawkins & Prestige and whether it will be able to maintain its growth momentum faster than the industry by capitalizing on ecommerce. Nonetheless, given the stellar growth in FY21 and the steady but rising brand profile of its products, Stove Kraft is a good consumption small-cap stock to watch out for.

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