Building a micro-cap basket
I have some spare capital and I decided to invest in a few micro-caps. Would love the community’s thoughts on the picks.
- Freshara Agro
Found this one 3 months ago, primary thesis was that it’s an agri-export business which recently added new capacity and has now added a legacy customer base through an acquisition.
The company currently generates 84% of its revenue from a single product, gherkins. They are now diversifying and adding Spanish olives to their product mix. The recent Spanish acquisition also gives them some geographic diversification away from a single source of raw material.
I expect this company to grow 3x in the next 5 years
My average buying price for this company was Rs. 165 and I intend to add more after seeing their H2 results and hearing the management’s commentary on the medium term plan
- Advanced Enzymes
This is an interesting company with a strong technological moat. I believe it’s trading at a discount to its fair market value even after the recent recovery. Their products have a long tail and a very high degree of stickiness.
Real value unlock is 2-3 years away as API manufacturing takes off in India. This company’s enzymes could play a critical role in India’s next big pharma wave
My average buying price was around 290 and I will keep adding this on dips
- Danish
Danish is one of the largest inverter duty transformer manufacturers in India (second only to Shilchar). The thesis here is very simple, as India adds more and more solar energy they will need these specialized transformers, for which India simply does not have sufficient capacity, especially when you correlate our planned capacity increase for solar module production and government targets for renewable energy.
Danish will benefit greatly from these tailwinds, management can also explore a promising export market in the near future.
Bought in at an average of 750, bought a lumpsum and will let it ride out