Tobacco and alcohol consumption are both harmful to health. For well-known investor and D-Mart promoter Radhakishan Damani, the space appears to be an opportunity to create wealth.
The latest shareholding data showed that the market maven and its investment arms further increased its stake in two sinful stocks, including VST Industries, which manufactures and distributes cigarettes and related products, and the maker of United Breweries beer in the January-March quarter. Winding stocks are stocks of companies operating in the fields of gambling, tobacco, alcohol and cannabis, among others.
Lately, United Breweries announced a 67.92% increase in its consolidated net profit to Rs 163.78 crore for the fourth quarter ended March 2022, driven by volume-based growth. Brokerage Nirmal Bang Securities is positive on United Breweries with a target price of Rs 1,665.
“United Breweries saw a continued recovery in demand in Q4FY22. The quarter started in January 2022 with subdued demand due to the Omicron variant scare, but ended with a record month in March 2022. This was driven by a continued recovery in demand, which was observed in almost all markets. The company also saw stock growth, both in the quarter and in year-to-date performance,” said Nirmal Bang Securities.
Shares of VST Industries traded at around Rs 3,240 on the afternoon of April 29, while United Breweries was at Rs 1,607.
Commenting on VST Industries, Centrum Broking said in a previous report that growing demand for the value segment could provide strong tailwinds for VST to gain market share.
Elara Capital believes United Breweries should post a strong first quarter of FY23, thanks to a positive seasonal effect, as April-July accounts for about 40-45% of the company’s annual volumes.
Damani, Bright Star Investments and Derive Trading and Resorts together increased their stake in VST Industries to 32.34% in Q4FY22 from 32.26% in the prior quarter. Similarly, its holdings with Derive Trading and Resorts also rose to 1.21% from 1.20% previously.
On the other hand, he dumped some shares of Blue Dart Express and Metropolis Healthcare during the same period. Overall, Damani owned more than 1% of the capital of at least 12 companies as of March 31, 2022.
With a net worth of $20.70 billion, Bloomberg Billionaire Index showed that Damani is the 5th richest person in India after Gautam Adani ($124 billion), Mukesh Ambani ($104 billion), Azim Premji ($31.4 billion) and Shiv Nadar ($27 billion).
Damani, also known as Mr. White in the financial world, has retained his stake in companies such as 3M India, Astra Microwave, BF Utilities, India Cements, Andhra Paper, Trent, Avenue Supermarts and Sundaram Finance Holdings.
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