One of India’s most respected and highly followed super investors, the founder of Abakkus Funds, Sunil Singhania, has just made two big sell decisions. Singhania, known for his strategic focus on midcap and smallcap stocks across varied industries, always attracts attention when he picks or drops stocks.

Now, Singhania is someone who does not get affected by market noise and likes to maintain conviction through volatility, a very Warren Buffett quality. However, Abakkus fund has just made two startling small cap sell decisions which has got the investor circles worried about the small cap sector.

Let us try and find out what went wrong in these 2 companies, especially because they were both bought by the fund not so long ago.

Denta Water & Infra: A Rapid Growth Story Cut Short?

Incorporated in 2016, Denta Water and Infra Solutions Ltd is in the business of GWR (Water Management), Irrigation, Operations & Management pertaining to water projects.

With a market cap of Rs 759 cr, the company provides water and infrastructure solutions and is engaged in design, installation and commissioning of water management infrastructure projects with expertise in ground water recharging projects.

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In addition, company undertakes construction projects in railways and highways.

Singhania had bought 1.3% stake in the company worth Rs 12.2 cr under the Abakkus Diversified Alpha Fund-2, as per the filings for the quarter ending March 2025. However, as per the filings for the quarter ending December 2025, this holding has gone below 1% which means a partial or complete sell off.

Interestingly, the company has recorded some very strong figures. It is therefore a mystery why Singhania sold the stock.

The stand-alone financials of Denta Water show that the sales of the company grew from Rs 1 cr in FY20 to Rs 203 cr in FY25, which is a compound growth of 186%. For H1FY26, the sales logged by the company are Rs 141 cr, which is 45% higher than the figure in H1FY25 of 97 cr.

Looking at the EBITDA, the company did not make any operating profits in FY20 but in FY25 logged operating profits of Rs 68 cr. And for H1FY26, EBITDA was Rs 46 cr (Higher than 33 cr for H1FY25).

As for net profits, the company wasn’t making any till FY20, but staged a turnaround and closed FY25 at Rs 53 cr. For H1FY26, profits of Rs 38 cr were already recorded.

The share price of Denta Water & Infra Solutions Ltd at listing in January 2025 was around Rs 340 and as of closing on 19th January 2026 it was Rs 285, a drop of 16%.

The company’s share is trading at a PE of 12x while the industry median is 18x. While it would be too soon to look at the long-term PE of the company, the industry median for the last decade is 23x.

The company is almost debt free and has a dividend yield of 0.9% while the industry average when compared to peers is a flat 0%.

Despite Denta Water’s explosive triple-digit revenue growth and improving margins, Abakkus Fund’s decision to trim its stake below the 1% reporting threshold suggests a move toward capital preservation and profit-booking. Or it could just be that the fund manager found a more lucrative investment opportunity.

The exit follows a volatile period for the stock, which saw it retract from October highs of Rs 480 amid a controversial exchange filing error by the company’s management. For an investor like Singhania, the stake reduction may reflect a preference for companies with more seasoned disclosure practices, even as Denta’s underlying turnaround metrics remain statistically cheap relative to its peers.

TTK Healthcare: Profit Booking After a Two-Year Stint

Established in 1958, TTK Healthcare Ltd is engaged in the business of Pharmaceuticals, Consumer Products, Medical Devices, Protective Devices and Foods.

With a market cap of Rs 1,417 cr, the company is a part of TT Krishnamachari group; whose flagship company, TTK Prestige Ltd is one of the leading kitchen appliances companies in India.

Singhania’s Abakkus Funds held a 1.13% stake in TTK Healthcare since the filings for the quarter ending September 2023. This stake was purchased after the company’s failed effort to de-list from the markets.

As per the exchange filings for the quarter ending December 2025, this holding has fallen below 1%. This could mean a partial or complete exit.

Let us dive into the financials to see if we can figure out the reason behind the sell off.

The company’s sales logged a mere 4% compound growth from Rs 646 cr in FY20 to Rs 801 cr in FY25. And for H1FY26, the company logged sales of Rs 430 cr.

The EBITDA grew from Rs 28 cr in FY20 to Rs 35 cr in FY25, which is a compound growth of 4.6%. For H1FY26, the EBITDA logged was Rs 8 cr, which is almost half of the H1FY25 figure of Rs 15 cr.

In case of the Net Profits, the company had seen a turnaround up until FY23 but then fell drastically only to jump again a bit in FY25.

YearFY20FY21FY22FY23FY24FY25
Net Profit/Cr1246426406382

For H1FY26, Net Profits of Rs 33 cr have been logged by the company, which is a 33% drop from the Rs 49 cr figure of H1FY25.

The share price of TTK Healthcare Ltd was around Rs 560 in January 2021 and as of closing on 19th January 2026, it was Rs 1,004, which is an 80% jump in 5 years.

The share is trading at a PE of 20x, and the industry median currently is 22x. The 10-year median PE for the company is 33x while the industry median for the same period is 17x.

The decision by Abakkus Funds to trim its stake below the 1% threshold appears to be a reaction to the company’s stalling growth and significant margin contraction. While the divestment of the Human Pharma division in FY23 provided a massive one-time boost to the bottom line, it also removed a high-margin growth engine from the portfolio.

Since then, the remaining business segments have struggled to find their feet, which is clear by the 4% sales CAGR.

Another big red flag is the H1FY26 performance, where EBITDA nearly halved compared to the previous financial year. For a fundamental-focused value fund that give precedence to operational efficiency and compounding growth, this sharp fall in profitability likely signalled that the original investment thesis had weakened, prompting a sell decision.

Verdict: High Valuations or Sector Re-Rating?

For an investor of the calibre of Sunil Singhania, sell and buy decisions do not come by easily. A lot of research goes behind each pick and drop, which makes everyone of it get serious attention from smart investors.

The two stocks that Singhania’s Abakkus Fund pulled out from, Denta Water and TTK Healthcare, have shown promise when it comes to turnaround in profit. However, both have also shown some red flags like the ones given above, which could have prompted Singhania’s sell decision.

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To find out if the sell decisions were the right ones or mistakes that Singhania might later regret will be a ride very fascinating to watch. We recommend adding the two stocks to a watchlist and keeping a very close eye on them.

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.