Rekha Jhunjhunwala is a prominent figure in the Indian investment landscape, known for her strategic approach to stock market investments. While her husband, Rakesh Jhunjhunwala, often steals the spotlight, Rekha’s impressive portfolio speaks volumes about her investment acumen. With a focus on thorough fundamental analysis and a patient approach, she has consistently identified high-potential stocks long before they gain widespread recognition.

Despite her lower media profile compared to other investors, Rekha’s results have garnered her the quiet admiration of seasoned market players. It’s no surprise that she has been dubbed the "Warren Buffett of India." Her steadfast commitment to holding positions in small-cap stocks for over ten years raises intriguing questions about the qualities of these companies that inspire such loyalty. Let’s explore her top picks and what they reveal about her investment philosophy.

Agro Tech Foods Ltd (ATFL): A Leader in Edible Oils

Agro Tech Foods, now rebranded as Sundrop Brands Limited, commands a significant presence in India’s edible oils and branded foods sector, featuring well-known brands like Sundrop and ACT II. The company operates through two divisions: the Branded Foods Segment and the Bulk and Processed Commodities Segment.

• Market Cap: Rs 3,058 crore
• Recent Acquisition: Acquired Del Monte Foods Pvt. Ltd. for Rs 1,300 crore in November 2024, projected to boost revenues by over Rs 500 crore.

Rekha has been a shareholder in ATFL since December 2015, holding 2.25% of the company as of February 2025. Interestingly, foreign institutional investors (FIIs) increased their stake in ATFL from 0.79% to 1.26% between September and December 2024, although it slipped back to 0.73% by February 2025.

Financial Insights: A Mixed Bag

While Rekha’s long-term investment in ATFL is noteworthy, the company’s financial performance tells a different story:

• Sales: Declined from Rs 812 crore in FY19 to Rs 760 crore in FY24, with Rs 595 crore reported for the three quarters ending December 2024.
• EBITDA: Dropped from Rs 65 crore in FY19 to Rs 34 crore in FY24.
• Net Profit: Plummeted by 70%, from Rs 34 crore in FY19 to Rs 10 crore in FY24.

Despite these financial challenges, ATFL’s share price has seen significant growth, rising from Rs 430 in March 2020 to Rs 811 by March 21, 2025—an impressive 89% increase over five years. However, the stock is still trading at a 30% discount from its all-time high of Rs 1,152 and currently has a price-to-earnings (PE) ratio of 445x, compared to the industry median of 31x.

In November 2024, the company appointed Nitish Bajaj as Group Managing Director, bringing extensive experience in consumer products and brand management to the helm.

Aptech Ltd: Innovating in Education

Founded in 1986, Aptech Ltd has established itself as a leader in specialized education, with a global network of 800 centers offering training in diverse fields such as IT, media, and finance. The company’s ability to serve both individual learners and corporate clients sets it apart in the education sector.

• Market Cap: Rs 729 crore
• Debt Status: Almost debt-free with a commendable 56% dividend payout.

Rekha has maintained a 21% stake in Aptech since at least December 2015. The company has shown resilient growth:

• Sales Growth: Increased from Rs 207 crore in FY19 to Rs 436 crore in FY24.
• EBITDA: Grew from Rs 29 crore in FY19 to Rs 42 crore in FY24.
• Net Profit: Rose from Rs 18 crore to Rs 29 crore during the same period.

The share price has also appreciated, climbing from Rs 55 in March 2020 to Rs 126 by March 21, 2025—a remarkable 130% increase. However, it is currently priced below both its 52-week high of Rs 265 and its all-time high of Rs 423.

Long-Term Vision or Risky Bet?

Rekha Jhunjhunwala’s steadfast investment in Agro Tech Foods and Aptech raises compelling questions about the future of these companies. Despite the concerning financial indicators from ATFL, her confidence in these small-cap stocks suggests there may be more to their stories than meets the eye.

Will these investments turn into the next big success, propelling Rekha’s wealth further, or are they potential pitfalls waiting to be uncovered? Only time will reveal the true potential of these companies. For investors, keeping an eye on these stocks could offer valuable insights into long-term investment strategies.

Disclaimer: This article provides a perspective on investment trends and is not intended as financial advice. Always consult with a financial advisor before making investment decisions.