Porinju Veliyath’s portfolio: Why the super investor just bet on 2 beaten-down stocks near 52-week lows

What makes this quarter interesting is the timing. Both stocks are sitting near or at their 52-week lows. Both have decent business stories that have been temporarily clouded by working-capital strain or earnings volatility. And both have promoters who own roughly 70% of the equity, a level Porinju typically prefers because it shows skin in the game.

So, what exactly has caught his eye? Let’s dive into the stories behind these stocks.

#1 Shigan Quantum Technologies: The Only Indian Firm with a Fully Indigenised CNG Fuel System

Incorporated in 2008 and listed on the NSE Emerge SME platform in March 2022, Shigan Quantum Technologies is in the business of designing, manufacturing, and supplying alternate fuel system components for compressed natural gas, liquefied petroleum gas, and hydrogen-based engines. Its customers are auto OEMs, locomotive makers, and stationary engine builders.

With a market cap of Rs 159 cr, it is the only firm in India that has fully indigenised the BS-VI plus OBD-II compliant CNG fuel system, built around its own multipoint gas injection technology. That is a technical-sounding claim with real commercial weight. With diesel emission norms tightening and CNG/LNG vehicles becoming the bridge to full electrification, this kind of in-house IP is hard to replicate.

Shigan also has two newer growth legs: fire detection and suppression systems for buses (mandated by the Ministry of Road Transport and Highways for school buses since October 2023), and a Surface Mounting Technology line for electronic circuit boards. A Singapore subsidiary, E-Mobility Exim, handles the export side.

Veliyath bought a 1.2% stake in the company per the exchange filings for March 2026, which is currently worth Rs 1.9 cr.

The Financial Pulse: Growth Meets a Bumpy Recovery

Here is how the company has scaled over the last five years on a standalone basis (to get a better and long-term perspective).

Fiscal Year	FY20	FY21	FY22	FY23	FY24	FY25	5-yr CAGR
Sales (Rs cr)	73	96	242	164	152	211	24%
Operating Profit/EBITDA (Rs cr)	6	7	17	10	13	20	27%
Net Profit (Rs cr)	3	4	10	4	5	8	22%

Sales compounded by 24% while the net profit compounded at 22% over five years, but the path was bumpy. FY22 saw a one-off spike, FY23 was a reset, and FY24 was a soft year. FY25 brought a clear recovery, with sales clocking Rs 211 cr and net profit at Rs 8 cr.

The first half of FY26 (April-September) has already delivered Rs 109 cr in sales and Rs 3 cr in profit.

Operating margin has nudged up from %8 in FY20 to 10% in FY25, suggesting the product mix is moving towards higher-value items.

The share price of Shighan was about Rs 64 when listed in March 2022 and as of closing on 13^th May 2026 it was Rs 78.

The stock currently trades at a P/E of 23x. The Auto Components and Equipments industry trades at a much wider median, but most listed peers are mainboard companies many times Shigan’s size, so a like-for-like comparison is difficult. Since Shigan listed only in March 2022, a 10-year median P/E is not available, a limitation worth noting.

The Liquidity Squeeze: Why Rising Debtor Days Are a Critical Watch-Point

Where the caution lights flash is on the working capital side. Debtor days have crawled up from 51 in FY24 to 68 in the latest reading. Cash conversion cycle has stretched to 132 days. Free cash flow has been negative, in three of the last four years, and the company is funding growth through a rising borrowing line, borrowings have moved from Rs 7 cr in FY20 to Rs 58 cr in September 2025.

The promoter holding has slipped from 74% to 70% over three years, with no shares pledged. That dip is modest, but worth keeping an eye on. The Government of India also holds a small 0.94% stake, picked up via an investment in late 2024.

The bet for Veliyath is straightforward. India’s commercial-vehicle CNG penetration is set to keep rising, school-bus fire-protection orders are now a regulated tailwind, and Shigan’s IP-led product portfolio is unmatched at this size.

The stock is trading at a discount of 53% from its all-time high price of Rs 167. The operating numbers have bounced back, and the contrarian gets in before the next cycle is priced in. The risk is the working-capital drag turning into something worse before the operating leverage kicks in.

#2 R K Swamy Ltd: 70% Price Crash for a 50-Year Ad Legacy

Founded in 1973 in Chennai, R K Swamy is one of the oldest names in Indian advertising. Its current avatar is broader: an integrated marketing services group spanning creative and media, customer data analytics, marketing technology, and full-service market research.

With a market cap of Rs 453 cr, the company is the 9th-largest position among India’s integrated marketing groups is built on five-decade relationships with clients such as Aditya Birla Sun Life AMC, Dr Reddy’s, Havells, Mahindra & Mahindra, and UltraTech Cement.

The company listed on the BSE and NSE in March 2024 at an IPO price of Rs 288. The IPO raised Rs 424 cr, Rs 173 cr fresh, Rs 250 cr offer-for-sale. Rs 52 cr of the IPO proceeds were still parked in fixed deposits as of December 2025, so the firepower is still on the balance sheet.

Veliyath bought a 1.2% stake in the company per the exchange filings for March 2026, which is currently worth Rs 5.6 cr.

Let us take a look at R K Swamy’s consolidated numbers over the last four years.

Fiscal Year	FY21	FY22	FY23	FY24	FY25	4-yr CAGR
Sales (Rs cr)	174	234	293	332	294	14%
EBITDA (Rs cr)	20	35	56	71	30	11%
Net Profit (Rs cr)	3	19	31	40	19	59%

As we can see, Sales scaled steadily from FY21 through FY24, peaking at Rs 332 cr. Operating profit hit Rs 71 cr in FY24. Net profit touched Rs 40 cr. Then FY25 broke the run and sales fell to Rs 294 cr, operating profit halved, and net profit dropped to Rs 19 cr.

Operating margin compressed from 21% to 10%. The 4-year sales CAGR is now a soft 14% and profit CAGR, however, is a strong 59%.

The share price of R K Swamy was Rs 278 when listed in March 2024 and as of closing on 13^th May 2026 it was Rs 90, which is a drop of 68% from the listing price and 72% from its all time high of Rs 321.

R K Swamy’s stock now trades at a P/E of 22x, with a dividend yield of 1.41% (in a flat market). Like Shigan, its small listing history (March 2024) means a 10-year median P/E is unavailable.

The pressure points are however visible. Debtor days are at 181, meaning roughly half a year of revenue is locked up in receivables. Working capital days have ballooned from 32 to 83. Cash from operations swung from a positive Rs 11 cr in FY24 to a negative Rs 10 cr in FY25.

For the first nine months of FY26 (April to December 2025), the company has clocked consolidated revenue of Rs 240 cr and net profit of Rs 6 cr.

The Contrarian Signal: Why the Promoters are Buying While FIIs Exit

The bull case rests on three pillars. The 3-year Return on Equity is still 21%, the company has been a steady dividend payer with a 24% payout ratio, and promoter holding has actually moved up from 66% at IPO to 70%, a rare instance of insiders increasing skin in the game during a sharp drawdown.

The bear case is equally clear. The marketing services industry is exposed to corporate ad spend cycles, debtor days are at uncomfortable levels, and the recent earnings collapse has not yet visibly turned. Foreign institutional holding has dropped from 6% at IPO to just less than 1% by December 2025, a clean exit. Domestic institutional holders have also trimmed from 10% to 5%. The retail public shareholders are now carrying nearly the entire non-promoter book.

For Veliyath, that is not a bug, it is the feature. The crowd is gone, the float has thinned, and management is buying. If the ad-spend cycle picks up and the receivables get collected, the operating leverage on a 50-year client roster could be sharp.

However, one must not forget that this a SME Board listed stock, which comes with its own warning, from trading in lots to exit difficulties and liquidity problems.

The Contrarian Playbook: Will These Overlooked Portfolio Holdings Deliver

Both moves rhyme with Porinju’s long-running playbook: small to mid-sized companies, decent businesses with temporary trouble, beaten-up share prices, and tightly held promoter blocks.

Shigan is the cleaner growth story of the two, niche IP, regulated tailwinds, and a possible operating recovery in the pipeline. The risk sits in the cash flow and the working capital, not in the demand picture.

R K Swamy is the deeper contrarian play. The earnings have collapsed, the institutional money has walked out, and the stock has lost more than half its value in a year. But it has 53 years of brand equity, a debt-light balance sheet, a 21% three-year ROE, and IPO cash still on the books. The recovery, if it comes, will be off a low base.

Whether Porinju is right will depend on two simple questions. Can Shigan turn its rising debtor days into actual cash collection? And can R K Swamy bring its marketing-services revenue back to FY24 levels in the next two to four quarters? The answers will come from the annual reports and the Q4 numbers, both due in the next few months.

The takeaway for investors is not to copy the trade. It is to add both names to a watchlist, and follow both the stocks closely in the coming months.

Disclaimer:

Note: We have relied on data from www.Screener.in and 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. The content of the articles and the interpretation of data are solely the personal views of the contributors/writers/authors. Investors must make their own investment decisions based on their specific objectives, resources and only after consulting such independent advisors as may be necessary