2 investment themes and 3 preferred bets of Porinju Veliyath

Porinju Veliyath's Investment Themes and Bets

Porinju Veliyath, the Kerala-based investor known for his small- and mid-cap bets, likes railways and defence as two investment themes, and within these sectors, he prefers three stocks – Mazagon Dock, HBL Power Systems, and BEML. The value investor had mentioned a price range of Rs 180-200 for Mazagon Dock in the past. The stock has now surpassed the Rs 1,000-mark.

About railways, he says the capex was Rs 25,000 crore - Rs 30,000 crore around 10 years back. Now, it is Rs 2.4 lakh crore. Here are his views.

Bullish about railway story:

Indian Railways truly grasps the magnitude of India’s transformation, he highlighted. In the current year alone, capital expenditure worth Rs 2.4 lakh crore has been allocated to railways.

To put this into perspective, 10 years ago, in fiscal year 2013-14, the capital outlay for railways stood at a modest Rs 25,000 crore - Rs 30,000 crore.

Since then, the investment has multiplied nearly nine-fold, and there are expectations that this will continue. Projections indicate that it could reach Rs 4-5 lakh crore in the near future.

According to India Brand Equity Foundation (IBEF), India has the fourth-largest railway network, with over 22,593 operating trains and 75,439 miles of total track spanning 67,368 km route.

Liking for the defence space:

India is witnessing a monumental shift in the defence sector, Porinju said. The scale of manufacturing, both in the private and public domains, is unparalleled in the nation's history. This transformation represents a significant departure from past norms, presenting a vast landscape of possibilities.

Veliyath, an astute investor, holds a highly optimistic outlook for growth in this decade. Having established a strong base and platform for growth in the previous decade, he believes that the ongoing developments in defence, combined with India's remarkable reforms, will propel the nation even further.

Porinju’s three favourite bets:

Porinju recalled his earlier discussions about Mazagon Dock, a company which is engaged in shipbuilding and submarine construction. In the past, he had mentioned a price range of Rs 180-200 for the stock. To his surprise, the stock has now surpassed the Rs 1,000-mark, showcasing a remarkable five- to ten-fold increase.

He also spoke about HBL Power Systems, a battery-making company, which is also into Kavach kind of railway equipment, and has rallied a bit after the train collision in Odisha. Additionally, BEML, a divestment target, is one of the holdings in his portfolio.