Introduction:
Picture this: You are interested in chess and know the game inside out. You decide to appear in state-and-national-level matches and aim to prepare like a winner. You don’t just practice; you practice like the winners, the seasoned players whose games left people wondering if that move was even possible.
You study a game to understand the players’ thoughts and analyze a situation, right? Similarly, it helps you greatly if you study the portfolio of ace investors and take it as a guide to smarter investments.
In this article, we will explore Nemish Shah’s portfolio and follow his stock market journey to success. If you are new to the stock market, studying his portfolio can teach you how to pick stocks and build a well-diversified portfolio with your investments.
Who is Nemish Shah?
Nemish S Shah is the director and co-founder of ENAM Holdings, one of the country’s most reputed investment houses. He is a top investor in the equity market, known for his interesting and diversified portfolio. Nemish’s stock-picking skills are noteworthy, even though he trades in only a few stocks.
Nemish graduated from Lala Lajpat Rai College, under Mumbai University, in 1977. He began his journey in the stock market in 1984 when he co-founded ENAM Holdings, a stockbroking firm. Within a few years, he expanded into investment banking. It took him six months to join the top investment banks dealing in IPOs. Nemish’s exceptional research and investment skills led the company to multiple IPO deals in the country.
He is a leading philanthropist, and his views are highly respected today. Investors closely follow his market views and anticipations. Regarding Nemish Shah’s investment style, his latest portfolio reflects his extraordinary stock-picking skills. Nemish prefers investing in traditional companies over technology-driven ones. He is particularly fond of industrial machinery and automobile businesses.
Nemish Shah’s Portfolio:
As of March 31, 2024, Nemish S Shah holds seven stocks, and his net worth is Rs 2,732.8 Cr, according to corporate filings. These holdings are reported in the shareholding data filed with the exchanges. As per the exchanges’ data, Nemish Shah’s portfolio includes the following stocks-
| Sr. No. | Companies | Holding value (Cr.) | Quantity Held | Percentage Changes in March 2024 | % Holding in the company (March 2024) | % Holding in the company (Dec 2023) |
| 1 | The Hi-Tech Gears Ltd. | 139.4 | 1347049 | New | 7.2% | – |
| 2 | EID Party (India) Ltd. | – | – | Less than 1% | – | 1.2% |
| 3 | Asahi India Glass Ltd. | 687.5 | 11119635 | 0 | 4.6% | 4.6% |
| 4 | Bannari Amman Sugars Ltd. | 84.6 | 325000 | 0 | 2.6% | 2.6% |
| 5 | Elgi Equipments Ltd. | 327 | 5360000 | 0 | 1.7% | 1.7% |
| 6 | Lakshmi Machine Works Ltd. | 1490.3 | 938873 | 0 | 8.8% | 8.8% |
| 7 | Zodiac Clothing Company Ltd. | 4.7 | 405124 | 0 | 1.6% | 1.6% |
(Source- Trendlyne)
What does Nemish Shah’s portfolio highlight?
Nemish Shah has diversified his portfolio into textile machinery, compressors, sugar-producing, and the textile sector. His portfolio has become a guide to diversification for many aspiring investors.
Nemish Shah’s investment strategy focuses on long-term investments. He looks for companies with high return on capital employed (ROCE), sustainable competitive advantages, strong growth rates, and stable management. This disciplined method has helped him create a portfolio that consistently outperforms the market. His holdings reflect the principles he follows. His top stock, Lakshmi Machine Works Limited’s substantial holding worth Rs.1490.3 crores, is a testament to his disbelief in the company’s strong potential.
Nemish Shah’s Investment Philosophy:
His philosophy is similar to Warren Buffett’s, focusing on firms that benefit from growing consumption. He uses fundamental bottom-up research to find high-quality, structurally strong businesses with sustainable competitive advantages and consistent long-term growth.
According to Nemish Shah, the key difference when choosing investments in India is closely evaluating the quality of the management. He is comfortable with a business if the management is focused and understands capital allocation. Nemish Shah often ignores companies where the management doesn’t inspire confidence.
He bought Asahi India Glass Ltd. when the share price was deeply undervalued due to the company’s solid fundamentals and management understanding. The company later led to significant gains.
His principles are straightforward:
- A company is a wealth destroyer if its return on capital employed (ROCE) is less than 9%. To be worthwhile, a business must generate a sustainable ROCE.
- Nemish Shah dislikes situations where promoters constantly raise capital, which dilutes equity. The most important factor is how the fund’s future growth is planned.
For example, promoters often take money in the infrastructure sector based on high traffic projections, low interest rates, and quick project completion. This leaves little room for error. If projections fail, companies struggle to pay off their debt. Despite external problems affecting debt, Nemish Shah believes good management can find ways to survive and grow in challenging markets.
In summary, he always mentions three parameters to measure a company before investing-
- Consider the size of the opportunity, and look for businesses that have room for growth in the industry.
- Check the management quality
- Analyse and calculate the entry price
Conclusion:
Nemish Shah’s success story in stock market investing has inspired many investors. He has an eye for the nitty-gritty of a company’s fundamentals, resulting in a portfolio of select rare gems that have consistently reaped returns over the years. You can also take inspiration and invest in value stocks like his. But before following his footsteps, consult a SEBI-registered securities advisory to see whether his investment style and philosophy align with your goals.
*Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as recommendation or investment advice by Research & Ranking. We will not be liable for any losses that may occur. Investment in securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL, and certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.
FAQs
Who is Nemish Shah?
Nemish S. Shah is regarded as one of India’s top ten public shareholders. He is the co-founder and director of Enam Securities, a highly esteemed holding company.
What is Nemish Shah’s net worth?
As of the quarter ending June 2024, Nemish Shah’s (stock market) net worth is Rs.2708.08 crores.
What is Nemish Shah’s investment strategy?
Nemish Shah has always focused on investing in fundamentally strong companies for the long term. He prefers traditional companies over technology-driven ones and stresses the importance of a high ROCE.
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I’m Archana R. Chettiar, an experienced content creator with
an affinity for writing on personal finance and other financial content. I
love to write on equity investing, retirement, managing money, and more.
