Warren Buffett of India Stocks: Do FII Inflows Signal an Opportunity?

FIIs Turn Bullish: Indian Stocks See Fresh Inflows

After months of outflows, foreign institutional investors (FIIs) are making a comeback to Indian stock markets. This renewed interest, coupled with the backing of popular investors like Ashish Kacholia and Madhusudan Kela, has sparked curiosity among retail investors. Are these FII inflows a sign of a promising opportunity, or just a temporary blip?

Yasho Industries: A Chemical Powerhouse with Strong Growth

One of the stocks attracting FII attention is Yasho Industries Ltd, a manufacturer of specialty chemicals. With a market cap of Rs 2,164 crore, Yasho Industries boasts a impressive clientele including prominent names like Dabur, Continental, and Apollo Tyres.

Here’s what makes Yasho Industries stand out:

• FII Interest: FII holdings jumped from 1.41% to 7.24% in the latest quarter, indicating growing confidence.
• Strong Performance: Sales have grown at a compound rate of 18% from Rs 297 crore in FY20 to Rs 673 crore in FY25.
• EBITDA Growth: EBITDA has increased from Rs 40 crore in FY20 to Rs 108 crore in FY25, a remarkable 22% compound growth.
• Stellar Returns: The share price has surged from Rs 126 in May 2020 to Rs 1,795 currently, representing a 1,325% jump in five years.

However, net profits have taken a hit recently. The stock currently trades at a high PE of 360x, though its 10-year median PE is 31x, suggesting a potential for future growth.

Niyogin Fintech: An NBFC Embracing AI for Growth

Another stock attracting FII interest is Niyogin Fintech Ltd, a fintech company and registered NBFC. With a market cap of Rs 574 crore, Niyogin Fintech provides a digital platform for MSMEs, offering financial inclusion, credit, investments, and SaaS services.

Here are some key highlights:

• FII Presence: FII holdings have increased from 14.08% to 19.40% in the last quarter.
• Madhusudan Kela Backing: Another renowned investor, Madhusudan Kela, has been holding a stake in the company since September 2023.
• Rapid Sales Growth: Sales have jumped from Rs 28 crore in FY20 to Rs 196 crore in FY24, showcasing a strong 62% compound growth.
• AI Focus: Niyogin Fintech is strategically investing in AI to develop monetizable assets and enhance customer service.

While Niyogin Fintech is yet to achieve profitability, its aggressive growth and strategic initiatives suggest potential for future success.

Should You Follow the Big Money?

When investors like Ashish Kacholia and Madhusudan Kela, known for their astute investment strategies, show interest in a stock, it naturally attracts attention. Adding to this, the recent inflow of FIIs further fuels speculation. However, it’s crucial to remember that past performance doesn’t guarantee future results.

While Yasho Industries and Niyogin Fintech offer intriguing prospects, potential investors should conduct thorough research, consider their risk tolerance, and consult with financial advisors before making any investment decisions. These stocks offer promising opportunities, but it’s essential to approach them with caution and a well-informed strategy.