Tata Investment among 8 holding companies that have over 50% upside potential in 2-3 years
Holding companies’ index significantly outperformed the benchmark indices over a longer investment horizon. Specifically, it was observed that the outperformance accelerates during the market boom, as was evidenced during the periods of 2017-18 and 2023-24 when the index nearly doubled in a span of a year.
have consistently outperformed broader market indices as the returns across different investment periods have consistently surpassed those of benchmark indices, presenting better risk-reward prospects for passive investors over longer time frames, says a study by Ways2Wealth., , , , , Bengal & Assam Co, Bajaj Holdings & Investment and Corp are the top picks by the research firm with a growth potential of over 50% keeping a period of 2-3 years in sight.
Holding companies’ index significantly outperformed the benchmark indices over a longer investment horizon. Specifically, it was observed that the outperformance accelerates during the market boom, as was evidenced during the periods of 2017-18 and 2023-24 when the index nearly doubled in a span of a year.
Holding company investment acts as a great passive financial instrument, as a company's financial performance is derived from the performance of several portfolio companies, thus diluting the company specific risk.
JSW Holdings is the NBFC arm of the JSW Group. It has holdings primarily in JSW Group’s steel companies. Owing to a surge in dividend income during FY23, return on net-worth increased from 0.84 in FY22 to 1.55 in FY23.
JSW Holdings is currently trading at Rs 6,887.60 on the BSE.
Kalyani Investment is a part of Kalyani Group and formed by demerging ‘Investment Business’ of Kalyani Steels. It holds a significant stake in Hikal (31.4%), Bharat Forge (13.6%) and BF Utilities (16.5%). With 800 bps increase in net profit margin to 71.5%, return on net worth surged from 7.0 in FY22 to 10.6 in FY23.
The company is trading at Rs 4,330 on the BSE.
Summit Securities Ltd. (formerly known as RPG Itochu Finance Ltd.) is an RBI registered NBFC arm of RPG Group. The company has stakes in businesses like CEAT (2.6%), KEC International (11.0%) and Zensar Technologies (11.1%). It holds a strong balance sheet with near zero debt levels.
Summit Securities currently stands at a price level of Rs 1,342.60.
The company functions as a core investment company with main activity being investment in shares and securities of the Birla Group of companies and providing finance to them. Grasim, Hindalco, Ultratech Cement, and Century Textiles are some of its major investments and the outlook of these companies is positive for the long term.
The current market price of the stock is Rs 3,755.
Ramco Industries is a part of diversified Ramco Group, which has interest in cement, dry wall & ceiling products, roofing products, cotton yarn, surgical cotton and computer software. It has a large investment in Ramco Cements of 21.4%, followed by a 20.1% stake in Ramco Systems.
The stock is currently trading at Rs 231.35 on the BSE.
BACL majorly holds investment in almost all the group companies of the JK group, which was founded in 1918. The group is actively working in the core sectors of cement, paper, automotive tyre, sugar, agriproducts, etc. Significant investments in the form of listed shares of major JK Group Companies, including JK Tyre and Industries, JK Lakshmi Cement Limited, JK Paper Limited, JK Agri Genetics Limited etc., provide adequate financial flexibility.
On the BSE, the current price of the stock is Rs 8,450.
Bajaj Holdings & Investment (BHIL) came into existence in 2007 post demerger of erstwhile Bajaj Auto into Bajaj Auto Ltd. (BAL), Bajaj Finserv (BFL) and Bajaj Holdings and Investments (BHIL). It holds 39% and 34% in BFL and BAL, respectively, and also has 16.6% stake each in Bajaj Electricals Ltd. (BAJAJELEC) and Bajel Projects Ltd. (BAJEL).
The stock is trading at Rs 8,124 on the BSE.
Tata Investment Corp (TICL) is a non-banking financial company investing mainly in the Tata Group of companies, which are engaged in diversified businesses. It holds key stake in Tata Chemicals, Tata Consumers Products and Trent of 6.0%, 4.7% and 4.3%, respectively.
The stock stands at the current price levels of Rs 6,825.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Holding companies’ index significantly outperformed the benchmark indices over a longer investment horizon. Specifically, it was observed that the outperformance accelerates during the market boom, as was evidenced during the periods of 2017-18 and 2023-24 when the index nearly doubled in a span of a year.
Holding company investment acts as a great passive financial instrument, as a company's financial performance is derived from the performance of several portfolio companies, thus diluting the company specific risk.
Here are the top picks by Ways2Wealth for a horizon of 2-3 years:
JSW Holdings
JSW Holdings is the NBFC arm of the JSW Group. It has holdings primarily in JSW Group’s steel companies. Owing to a surge in dividend income during FY23, return on net-worth increased from 0.84 in FY22 to 1.55 in FY23.
JSW Holdings is currently trading at Rs 6,887.60 on the BSE.
Kalyani Investment
Kalyani Investment is a part of Kalyani Group and formed by demerging ‘Investment Business’ of Kalyani Steels. It holds a significant stake in Hikal (31.4%), Bharat Forge (13.6%) and BF Utilities (16.5%). With 800 bps increase in net profit margin to 71.5%, return on net worth surged from 7.0 in FY22 to 10.6 in FY23.
The company is trading at Rs 4,330 on the BSE.
Summit Securities
Summit Securities Ltd. (formerly known as RPG Itochu Finance Ltd.) is an RBI registered NBFC arm of RPG Group. The company has stakes in businesses like CEAT (2.6%), KEC International (11.0%) and Zensar Technologies (11.1%). It holds a strong balance sheet with near zero debt levels.
Summit Securities currently stands at a price level of Rs 1,342.60.
Pilani Investment and Industries
The company functions as a core investment company with main activity being investment in shares and securities of the Birla Group of companies and providing finance to them. Grasim, Hindalco, Ultratech Cement, and Century Textiles are some of its major investments and the outlook of these companies is positive for the long term.
The current market price of the stock is Rs 3,755.
Ramco Industries
Ramco Industries is a part of diversified Ramco Group, which has interest in cement, dry wall & ceiling products, roofing products, cotton yarn, surgical cotton and computer software. It has a large investment in Ramco Cements of 21.4%, followed by a 20.1% stake in Ramco Systems.
The stock is currently trading at Rs 231.35 on the BSE.
Bengal & Assam Company
BACL majorly holds investment in almost all the group companies of the JK group, which was founded in 1918. The group is actively working in the core sectors of cement, paper, automotive tyre, sugar, agriproducts, etc. Significant investments in the form of listed shares of major JK Group Companies, including JK Tyre and Industries, JK Lakshmi Cement Limited, JK Paper Limited, JK Agri Genetics Limited etc., provide adequate financial flexibility.
On the BSE, the current price of the stock is Rs 8,450.
Bajaj Holdings & Investment
Bajaj Holdings & Investment (BHIL) came into existence in 2007 post demerger of erstwhile Bajaj Auto into Bajaj Auto Ltd. (BAL), Bajaj Finserv (BFL) and Bajaj Holdings and Investments (BHIL). It holds 39% and 34% in BFL and BAL, respectively, and also has 16.6% stake each in Bajaj Electricals Ltd. (BAJAJELEC) and Bajel Projects Ltd. (BAJEL).
The stock is trading at Rs 8,124 on the BSE.
Tata Investment Corp
Tata Investment Corp (TICL) is a non-banking financial company investing mainly in the Tata Group of companies, which are engaged in diversified businesses. It holds key stake in Tata Chemicals, Tata Consumers Products and Trent of 6.0%, 4.7% and 4.3%, respectively.
The stock stands at the current price levels of Rs 6,825.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
Source: Stocks-Markets-Economic Times
