Decoding Dolly Khanna’s portfolio exits: Why she walked away from these 3 smallcaps

So, when names drop out of her disclosed list at once, it is worth a closer look. In the March 2026 shareholding filings, 3 stocks fell below the 1 percent disclosure line for the first time. Once a holding goes under 1 percent, the investor is no longer named separately in the public shareholding pattern. In plain terms, she has either trimmed these to a sliver or walked away from them entirely.

We should be honest about one thing up front. Dolly Khanna does not explain her trades, and nobody outside her family knows her exact reasons. What we can do is read the filings and the financials, which always leave a trail. So let us go stock by stock and let the numbers talk.

#1 GHCL: Why the Soda Ash Cycle Broke

Incorporated in 1983, GHCL Ltd is one of India’s largest makers of soda ash, the white powder that goes into glass, detergents and a long list of everyday products. With a market cap of Rs 4,000 cr, the company is almost debt free, pays a steady dividend, and for years behaved like a quiet compounder. So why would a value investor like Khanna step back from it?

Dolly Khanna held about 1.1 percent of GHCL, close to 9.9 lakh shares, at the end of December 2025. By the March 2026 filing, her name had slipped under the 1 percent line. To understand the exit, follow what soda ash did to the profit line.

Financial Year	FY21	FY22	FY23	FY24	FY25	FY26	5Y CAGR
Sales (Rs cr)	2,491	3,778	4,545	3,447	3,183	3,064	4%
EBITDA (Rs cr)	605	982	1,497	851	877	690	3%
Net Profit (Rs cr)	326	647	1,142	794	624	472	7%

Two things make a clean five-year reading tricky. GHCL demerged its textiles arm in 2023, so the older years are not strictly comparable with the newer ones. And FY23 was a once-in-a-cycle high, when soda ash prices were unusually strong. Strip those out, and the recent trend is plain. Sales have fallen for three years running, from Rs 4,545 cr in FY23 to Rs 3,064 cr in FY26. Net profit has more than halved over the same stretch, from Rs 1,142 cr to Rs 472 cr.

The capital efficiency picture has cooled with it. ROCE, or return on capital employed, is the profit a company earns on the capital put into the business. It has fallen from about 35 percent in FY23 to roughly 17 percent in FY26. Return on equity is around 13 percent, below its own five-year average of about 20 percent.

GHCL Valuation: Is the 9x PE a Value Trap?

The share price of GHCL was around Rs 260 in June 2021 and as of closing on 24^th June 2026 it was Rs 436, which is closer to its 52-week low of Rs 417. In fact, the price has fallen from Rs 575 in Jan 2026 by about 25% in the last 6 months. For a buyer who likes things cheap but improving, GHCL was cheap and still sliding.

The stock trades at a PE of 9x, which looks cheap on the surface. But soda ash is a commodity, and a commodity business is only as good as its current price cycle. A low multiple sitting on falling earnings is not the bargain it appears to be. The industry median is about 23x.

#2 IFB Agro Industries: The 1-Quarter Portfolio Trade

Incorporated in 1982, IFB Agro Industries makes industrial alcohol and bottled liquor, and runs a processed marine foods business on the side. It is a promoter-heavy company, with promoters holding a steady 65 percent.

With a market cap of Rs 839 cr, the company saw a holding by Dolly Khanna for just one quarter, as per the December 2025 filing, with about 1.1 percent, close to 1.06 lakh shares. However, in the March 2026 filings, she was already below the 1 percent line. In and out inside a single quarter.

Financial Year	FY21	FY22	FY23	FY24	FY25	FY26
Sales (Rs cr)	702	1,011	1,247	932	1,059	1,404
EBITDA (Rs cr)	55	75	73	-10	37	100
Net Profit (Rs cr)	59	49	-8	22	56	59

A single growth rate is left out here because an operating loss in FY24 makes any compounded figure misleading. FY26 figures show the signs of revival.

Tracking the 50% Share Price Drop

Let us look at the share price of IFB Agro jumped from around Rs 735 in June 2025 to its all-time high of Rs 1,795 in January 2026. But the ride was short lived and the price crashed to its current price of Rs 898 as of closing in 24^th June 2026. A fall of nearly half from the top.

Along the way the exchanges twice asked the company to explain unusual price and volume moves, and the company replied that it had nothing price-sensitive to share.

The numbers never quite justified the frenzy. The company posted an outright operating loss in FY24, swung back to a profit in FY25, and almost tripled from there in FY26. But this is not a smooth grower. ROCE (Return on Capital Employed) is about 13% and ROE (Return on Equity) about 9%. Both low, and the company pays no dividend at all.

So, you had a thin, on-and-off earnings base sitting under a stock that briefly tripled and then cracked. For an investor whose whole reputation rests on buying the unglamorous when it is cheap, a name that had already run that hard was the opposite of her usual setup. Booking out after a sharp spike, rather than riding a frothy chart, fits her style far better than it breaks it.

#3 KCP Sugar: The Danger of 0% Operating Margins

Incorporated in 1995, KCP Sugar and Industries Corporation makes sugar, spirit and ethanol, largely out of Andhra Pradesh. Sugar is a hard, weather-and-policy-driven business at the best of times.

With a market cap of Rs 251 cr, KCP had a holding by Dolly Khanna since September 2023, and she held 1.6% per the December 2025 filings, which went below 1% in the March 2026 filings.

Let us look at the financials to try and get a sense of what went sideways.

Financial Year	FY21	FY22	FY23	FY24	FY25	FY26
Sales (Rs cr)	329	319	290	346	310	260
EBITDA (Rs cr)	0	14	5	19	12	1
Net Profit (Rs cr)	23	4	58	66	14	11

Why KCP Sugar’s Net Profit Hides the Real Story

Read the EBITDA row slowly, because it is the whole story. In FY26 the company did about Rs 260 cr of sales but only Rs 1 cr of operating profit. The operating margin was effectively zero. The reported net profit of Rs 11 cr did not come from making and selling sugar. It came from other income, meaning interest, treasury and similar items outside the main business, of close to Rs 29 cr. The same was true in the better-looking years. FY23 and FY24 profits leaned heavily on other income of Rs 85 cr and Rs 77 cr.

That is why a clean profit growth number means little here. The core sugar operation is barely breaking even, and sales have actually shrunk over five years. ROCE is about 4 percent and ROE under 3 percent.

The share price of KCP Sugar was around Rs 25 in June 2021 and as of closing on 24^th June 2026 it was Rs 22, which is also its 52-week low. It trades below its book value, which some investors call cheap.

But a business that earns almost nothing from operations, and whose profit depends on what sits in its investment book, is probably closer to a value trap than a clear bargain. For a patient holder finally heading for the exit, the math is not hard to follow.

The Retail Investor Takeaway – Value Traps or Strategic Exits?

I started with a question we cannot fully answer. Dolly Khanna does not narrate her trades, and her exact thinking stays private. But three balance sheets, read side by side, tell a surprisingly consistent story.

Every one of these names was weak on the things that matter most to a long-term owner. Sales were flat or falling. Returns on capital were thin or negative. In KCP Sugar the headline profit leaned on other income rather than the core business. In GHCL, a cyclical peak had clearly passed. In IFB Agro, a thin earnings base sat under a stock that had already run hard and then snapped back.

None of this is a forecast that these three are finished. Cycles turn, and cheap, unloved stocks are exactly where Dolly Khanna has made her money before. She may well buy some of them back later. But the exits carry a quiet lesson for retail investors who like to copy star portfolios. Following a super investor into a stock is the easy part.

Spotting when she has quietly walked out, and asking why, is the harder and far more useful habit. The filings are public. The numbers are right there for anyone willing to read them. Add them to a watchlist and keep an eye on them to ensure you don’t miss out on any big movements.

Disclaimer:

Note: We have relied on data from http://www.Screener.in and http://www.trendlyne.com throughout this article. Only in cases where the data was not available, have we used an alternate, but widely used and accepted source of information.

The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.

Suhel Khan has been a passionate follower of the markets for over a decade. During this period, he was an integral part of a leading Equity Research organisation based in Mumbai as the Head of Sales & Marketing. Presently, he is spending most of his time dissecting the investments and strategies of the Super Investors of India.

Disclosure: The writer and his dependents do not hold the stocks discussed in this article. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein.