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Hidden Gems? Ventura''s Vinit Bolinjkar bets on these two stocks that could deliver strong returns - BusinessToday

Hidden Gems: Ventura's Vinit Bolinjkar Highlights Two Stocks Poised for Robust Returns

In the ever-evolving landscape of the Indian stock market, where volatility often overshadows opportunity, seasoned analysts like Vinit Bolinjkar from Ventura Securities continue to unearth hidden gems that promise substantial returns for discerning investors. In a recent analysis, Bolinjkar has turned the spotlight on two under-the-radar stocks that he believes could deliver strong performance amid favorable economic conditions. His picks are rooted in thorough fundamental analysis, focusing on companies with solid growth trajectories, efficient operations, and untapped market potential. This insight comes at a time when the broader market is showing signs of recovery, with sectors like manufacturing, infrastructure, and technology gaining momentum. Bolinjkar's recommendations are particularly timely, as investors seek alternatives to overvalued large-cap stocks, turning instead to mid- and small-cap entities that offer higher growth prospects.

Vinit Bolinjkar, a prominent market strategist at Ventura Securities, has built a reputation for identifying multibagger stocks through his "Hidden Gems" series. His approach combines quantitative metrics—such as earnings growth, return on equity (ROE), and debt-to-equity ratios—with qualitative factors like management quality and industry tailwinds. In this latest edition, Bolinjkar emphasizes the importance of investing in companies that are not just surviving but thriving in India's post-pandemic economic rebound. He argues that with the government's push towards self-reliance (Atmanirbhar Bharat), infrastructure development, and digital transformation, certain niche players are positioned to capitalize on these megatrends. Bolinjkar's optimism is backed by data: he notes that the Nifty Smallcap 100 index has outperformed the benchmark Nifty 50 in recent quarters, underscoring the potential in lesser-known stocks.

The first stock on Bolinjkar's radar is Pitti Engineering Limited (PITTIENG), a company specializing in the manufacturing of electrical steel laminations, motor cores, and sub-assemblies. This firm operates in a critical segment of the electrical and automotive industries, supplying components essential for electric motors, generators, and alternators. Bolinjkar highlights Pitti Engineering's strategic positioning in the burgeoning electric vehicle (EV) and renewable energy sectors. As India accelerates its transition to green energy, with ambitious targets for EV adoption and solar power expansion, companies like Pitti are set to benefit immensely. He points out that Pitti has a diversified client base, including global giants like Siemens, GE, and ABB, which provides revenue stability and international exposure.

Delving deeper into the fundamentals, Bolinjkar praises Pitti Engineering's financial health. The company has demonstrated consistent revenue growth, with a compound annual growth rate (CAGR) of over 15% in the past five years. Its EBITDA margins have improved to around 18-20%, reflecting operational efficiency and cost control measures. Bolinjkar notes the firm's low debt levels, with a debt-to-equity ratio below 0.5, which minimizes financial risk in a rising interest rate environment. Moreover, Pitti's recent capacity expansions, including new plants in Aurangabad and Hyderabad, are expected to double its production capabilities by 2026. This expansion is timely, aligning with the global shift towards electrification. Bolinjkar projects that Pitti could see earnings per share (EPS) growth of 25-30% annually over the next three years, driven by higher order inflows from the EV and renewable sectors.

What makes Pitti a "hidden gem" in Bolinjkar's view is its undervaluation relative to peers. Trading at a price-to-earnings (P/E) ratio of around 15-18 times forward earnings, it appears attractively priced compared to larger players in the engineering space. He cautions, however, that investors should monitor raw material price fluctuations, particularly steel costs, which could impact margins. Despite this, Bolinjkar is bullish, estimating potential returns of 40-50% over the next 12-18 months, assuming sustained demand from infrastructure projects and export markets. He draws parallels to past success stories in the sector, where companies like CG Power have delivered multifold returns by riding similar waves.

Shifting focus to the second stock, Bolinjkar recommends Suprajit Engineering Limited (SUPRAJIT), a leader in the automotive cable and control systems industry. Suprajit manufactures a range of products including speedometer cables, brake cables, and halogen bulbs, serving both domestic and international automotive OEMs (original equipment manufacturers). With a strong presence in the two-wheeler and passenger vehicle segments, the company is well-placed to leverage India's booming auto industry, which is recovering from supply chain disruptions and gearing up for increased production.

Bolinjkar elaborates on Suprajit's growth drivers, starting with its robust export portfolio. The company derives nearly 60% of its revenue from exports to markets in Europe and the US, where it supplies to marquee clients like BMW, Ford, and General Motors. This global footprint not only hedges against domestic market slowdowns but also exposes Suprajit to higher-margin opportunities in advanced automotive technologies. He highlights the company's foray into electric vehicle components, such as wiring harnesses and control systems for EVs, which aligns with the global push towards sustainable mobility. In India, the rise of electric two-wheelers from players like Ola Electric and Ather Energy presents additional avenues for growth.

Financially, Suprajit stands out with a healthy balance sheet. Bolinjkar points to its revenue CAGR of 12-15% over the last few years, bolstered by strategic acquisitions like the buyout of Wescon Controls in the US, which has enhanced its product offerings and market reach. The company's ROE hovers around 20%, indicating efficient capital utilization, while its operating margins are in the 15-18% range. Bolinjkar appreciates Suprajit's prudent capital allocation, with consistent dividend payouts and minimal reliance on debt. Looking ahead, he forecasts a 20-25% EPS growth, fueled by capacity utilization ramp-ups and new product launches in the EV space.

One of the key attractions of Suprajit, according to Bolinjkar, is its valuation. At a forward P/E of 20-22 times, it trades at a discount to auto ancillary peers like Motherson Sumi or Endurance Technologies, despite comparable growth prospects. He attributes this to the stock's relatively low liquidity and smaller market cap, which keeps it under the radar of institutional investors. Potential risks include currency fluctuations affecting exports and competition from Chinese manufacturers, but Bolinjkar believes Suprajit's quality focus and innovation edge will mitigate these. He envisions returns of 35-45% in the medium term, positioning it as a solid bet for portfolio diversification.

In a broader context, Bolinjkar's picks reflect his confidence in India's manufacturing renaissance. He references government initiatives like the Production Linked Incentive (PLI) scheme, which incentivizes domestic production in sectors like auto components and electronics. Both Pitti and Suprajit are indirect beneficiaries of such policies, as they contribute to the supply chain ecosystem. Bolinjkar advises investors to adopt a long-term perspective, emphasizing that these stocks are not for quick trades but for compounding wealth over time. He stresses the importance of due diligence, suggesting that retail investors consult financial advisors before investing.

Comparing these recommendations to market trends, Bolinjkar notes that while the Sensex and Nifty have hit record highs, small-cap stocks have lagged in valuation, creating buying opportunities. His analysis aligns with bullish sentiments from other experts, who predict a 15-20% upside in mid- and small-caps driven by economic recovery, lower inflation, and stable crude prices. However, he warns of macroeconomic headwinds, such as geopolitical tensions or a global slowdown, which could dampen sentiment.

In conclusion, Vinit Bolinjkar's endorsement of Pitti Engineering and Suprajit Engineering as hidden gems underscores the potential in niche, fundamentally strong companies. By focusing on their growth catalysts, financial resilience, and attractive valuations, he paints a compelling picture for investors seeking alpha in a crowded market. As always, while these stocks hold promise for strong returns, they come with inherent risks, and a balanced investment strategy is key. For those willing to dig deeper, these picks could indeed prove to be the multibaggers of tomorrow, contributing to a diversified and rewarding portfolio in India's dynamic equity landscape.

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Read the Full Business Today Article at:
[ https://www.businesstoday.in/markets/stocks/story/hidden-gems-venturas-vinit-bolinjkar-bets-on-these-two-stocks-that-could-deliver-strong-returns-486344-2025-07-25 ]