Amrutanjan was the first stock recommended by Stalwart Advisors back in 2014 and coincidently it was on the exact same day as today – 14th Nov when we had released the report, so we have held it for a good five years.

Our initial entry was at Rs 144 (adjusted) while today the stock price is Rs 467 implying a gain of 225% over this period.

It had generated a net profit of Rs 15 Cr on sales of 130 Cr in FY14, which rose to Rs 20-22 Cr in subsequent years and company is on track to register Rs 40-45 Cr net profit on sales of around Rs 300 Cr over next 12 months, due to mean reversion in gross margins. The company has around Rs 100 Cr in surplus cash and an idle land parcel in prime location in Chennai worth Rs 200-250 Cr.

We continue to like the strategy of aggressive investments behind brand building, expanding distribution network and using the cash flows from head balm to build presence in new categories like body pain management, sanitary pads and ORS.

However, at current market capitalization of Rs 1,370 Cr, we think most of these positives are fairly priced in and to justify any higher valuation company would have to step up the growth rates.

For now, we are exiting this position from Model Portfolio however we would continue to monitor the business and reconsider if growth rates indeed step up.