In the realm of Indian investing, Nemish Shah stands out, often flying under the radar of the average investor. Co-founding ENAM Securities in 1984 alongside Vallabh Bhanshali—an individual frequently likened to Warren Buffett—Shah has carved a niche in the investment community. Recently, ENAM merged its investment banking and brokerage operations with Axis Bank, marking a significant shift in the financial landscape.

With a personal portfolio comprising seven stocks and a staggering net worth exceeding ₹2,888 crore, Shah’s investment moves are watched closely. ENAM Securities Pvt. Ltd. holds 37 stocks valued at ₹14,119 crore. This article delves into two midcap stocks that Shah has maintained in his portfolio for over a decade, illuminating what makes these companies significant in his eyes.

Lakshmi Machine Works Ltd (LMW)

Founded in 1962, Lakshmi Machine Works (LMW) is a cornerstone of global textile machinery production. Among a select few worldwide, LMW manufactures the complete range of spinning equipment. In addition to textiles, the company excels in producing CNC machine tools, heavy castings, and components for the aerospace industry. Essentially, LMW is pivotal to the Indian textile sector, facilitating everything from raw material processing to the final yarn stage.

• Market Cap: ₹17,313 crore
• Shah’s Stake: 5.43% (valued at over ₹1,500 crore as of December 2024)

Since December 2015, Shah has held a significant position in LMW. The company reported an impressive order book of ₹3,100 crore, with active orders at approximately ₹2,300 crore.

LMW’s sales have surged at a compounded annual growth rate (CAGR) of 12%, escalating from ₹2,712 crore in FY19 to ₹4,696 crore in FY24. For the first nine months of FY25, sales reached ₹2,208 crore.

Furthermore, LMW’s EBITDA saw a rise from ₹274 crore in FY19 to ₹435 crore in FY24, reflecting a CAGR of about 10%. The company’s net profits also exhibited steady growth, climbing from ₹185 crore in FY19 to ₹374 crore in FY24.

As of March 22, 2025, LMW’s share price was ₹16,206, marking a remarkable 575% increase from its five-year low of ₹2,400. However, it’s worth noting that this price represents a 16% discount from its all-time high of ₹19,200 achieved in late 2024.

• PE Ratio: 143x (well above the 10-year median of 36x)
• Debt Status: Nearly debt-free with a 24% dividend payout

Despite a challenging environment for textile machinery demand due to soaring cotton prices and narrowing profit margins, LMW’s management remains optimistic. The outlook depends on stabilizing raw material costs and supportive government initiatives as the industry grapples with these challenges.

Asahi India Glass Ltd (AIS)

Incorporated in 1984 as Indian Auto Safety Glasses, Asahi India Glass Ltd (AIS) has emerged as a leader in the integrated glass solutions market across various sectors, including automotive, architecture, and consumer goods. As the foremost manufacturer of automotive safety glass in India, AIS plays a vital role in the supply chain for major automakers like Maruti, Hyundai, and Tata.

• Market Cap: ₹15,262 crore
• Shah’s Stake: 1.38% (valued at over ₹900 crore as of December 2024)

Shah’s interest in AIS dates back to December 2015. The company has witnessed substantial growth in sales, increasing from ₹2,913 crore in FY19 to ₹4,341 crore in FY24, representing an 8% CAGR. For the first nine months of FY25, AIS reported sales of ₹3,415 crore.

AIS’s EBITDA grew from ₹510 crore in FY19 to ₹724 crore in FY24, reflecting a CAGR of over 7%. The net profit also jumped from ₹188 crore in FY19 to ₹325 crore in FY24, showcasing a compounded growth rate of 12%.

The stock price of AIS saw a major leap from around ₹150 in March 2020 to a peak of approximately ₹835 last September. As of March 22, 2025, the share price stood at ₹628, illustrating a 320% increase over five years but still about 25% below its all-time high.

• PE Ratio: 47x (compared to an industry median of 29x and a 10-year median of 16x)

The largest stakeholder, Asahi Glass Company Ltd (AGC), commands a 12% global market share in the float glass segment and 30% in the automotive glass sector. AIS is poised for growth, planning to invest ₹1,500 crore in capital expenditure for FY25 after spending over ₹900 crore in FY24.

Insights into Nemish Shah’s Investment Choices

Nemish Shah’s enduring commitment to LMW and AIS underscores an investment philosophy that transcends mere market trends. In a climate often fixated on short-term results, his long-term holdings raise intriguing questions about the underlying qualities he perceives in these companies.

Both LMW’s resilience and AIS’s dominance suggest that Shah favors foundational strength over transient momentum. However, the ultimate test lies in whether these investments will sustain their growth trajectories or serve as models for retail investors.

Beyond the numbers, the true indicators of success may rest in strategic acumen, adaptability amid industry challenges, and visionary leadership. Thus, the question remains: do these selections reflect Shah’s deep understanding of the Indian industrial landscape or are they strategic gambles on future growth?

For investors, keeping an eye on these stocks could yield valuable insights into the evolving market dynamics.

Disclaimer

This article serves to inform and engage readers with intriguing data and insights, but it is not an investment recommendation. Prospective investors should consult financial advisors before making any investment decisions.

Suhel Khan, with over a decade of market experience, has previously held a key role in a leading equity research firm in Mumbai. Currently, he analyzes the investment strategies of India’s top investors.

Note: The author and related parties do not hold shares in the companies mentioned.