The Rs 1,750-crore Chennai veteran who holds assets for 2 decades just picked 2 beaten-down cyclicals

Parikh, a chemical engineer who graduated in 1981, began his stock market career as a Chennai-based broker before turning a full-time investor by 1992. His most famous early bet, Ramco Cements, was made when the company was trading at three times its profit before tax and carried a market capitalisation of less than Rs 9 cr. He visited the AGM in person, was convinced of the management’s pedigree, and held on for decades. That single conviction now sits in his portfolio at over Rs 321 cr.

Parikh used to go on factory visits with Radhakishan Damani  back in the day, so it would be safe to say they shared a bond. What makes the man fascinating is how little he has changed. According to the latest exchange filings, Parikh publicly holds just nine stocks, mostly Chennai-headquartered legacy businesses like EID Parry, TVS Holdings, and Ramco Industries.

However, his latest picks are now drawing his attention. Both fit his lifelong template of buying old-economy businesses when the market has lost interest. So, what is the veteran spotting that the rest of the market is missing? Let us try and find out

The KCP valuation imbalance: Sector disconnect vs 1.08x book value margin of safety

Headquartered in Chennai, KCP Limited is engaged in the manufacture and sale of cement, sugar, heavy engineering, captive power, and hospitality. It runs cement plants in Macherla and Muktyala in Andhra Pradesh with a combined capacity of roughly 4.3 million tonnes, and a sizable sugar operation in Vietnam that has become its second largest segment.

With a market cap of Rs 2,118 cr, KCP is genuinely small for a cement business of this vintage. The Parikh family link is well documented. Per public shareholding filings, Sandhya G Parikh holds 2.8% and Chinmay G Parikh holds 2.5%, taking the family stake to roughly 5.4%, worth around Rs 95 cr at current prices.

Govindlal Parikh himself held 1.3% directly until early 2023 before that disclosed line dropped below the 1% reporting threshold. The family, in other words, has stayed in. He Once again has bought a 1.3% stake in the company as per March 2026 disclosures, which is currently worth Rs 27.4 cr.

Deconstructing the financial volatility: Why a 34% price capitulation masks operational eesiliency

Let us first of all look at the financials to see if we can get a sense of what is it that caught Parikh’s Fancy once again.

Financial Year	FY20	FY21	FY22	FY23	FY24	FY25	5-Year CAGR
Sales (Rs Cr)	1,424	1,693	2,108	2,254	2,846	2,529	12%
EBITDA (Rs Cr)	192	364	375	174	355	333	12%
Net Profit (Rs Cr)	58	185	240	91	280	253	34%

Sales have grown at a compound rate of 12% over five years, EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) at 12%, and net profit at a striking 34% from a low FY20 base. The 9 months of FY26 already show sales of Rs 1,893 cr, operating profit of Rs 225 cr, and net profit of Rs 155 cr, hinting at a steady, if unexciting, finish.

The share price of KCP Ltd was around Rs 112 in May 2021 and as on 19^th May 2026 it was Rs 164, which is a 42% correction from its all-time high price of Rs 282 and 29% from its 52-week high of Rs 230.

The one-year return is a painful -34%, the worst in its peer group. Yet on the operating side, KCP has not collapsed.

KCP currently trades at a PE just 14x against an industry median that hovers 28x. The 10-year median PE for KCP itself sits around 14x as well while the industry median for the same period is 25x. The stock is not unusually cheap on its own history, but it is unsually cheap against the sector it sits in.

The net asset cushion: Dissecting the 1.5x Price-to-Book Margin of Safety

The company has a current Return on Capital Employed (ROCE) of 13% and Return on Equity (ROE) of 11%. Over the past 10 years, the average ROE has been a steady 12%, fair for a diversified mid-cap with cement, sugar, and engineering bundled in. Borrowings stood at Rs 542 cr in March 2025, climbing to Rs 825 cr by September 2025, mostly to fund expansion. The cement cycle turned weak, sugar realisations have softened, and the market has chosen to focus on those headwinds rather than the underlying assets.

Also, the stock now trades at 1.08 times book value. For a company with a 4.3 million tonne cement capacity, captive limestone, a Vietnam sugar business, and a heavy engineering arm that has built launch pedestals for ISRO, that is the kind of price an old-school value investor like Parikh probably found hard to ignore.

IP Rings and the amalgamations heritage: Tracking a receptive asset under retail radar

Incorporated in 1991, IP Rings Limited is a member of the Chennai-based Amalgamations Group, the same legacy industrial house that controls Simpson & Co. and Tractors and Farm Equipment. The company manufactures engine and transmission components, mainly piston rings and precision forged parts, originally in technical and financial collaboration with Nippon Piston Ring Co. of Japan.

With a market cap of Rs 152 cr, IP Rings flies entirely under retail radar. Promoter holding is steady at 56.58% with zero pledged shares. Foreign and domestic institutions are conspicuous by their absence, with combined FII and DII holding at zero. The remaining 43.42% sits with the public, a category that historically includes long-term Tamil Nadu family money, the kind Parikh has often been part of.

Parikh bought a 1.5% stake in the company as per the exchange filings for the quarter ending March 2026, which is currently worth Rs 2.1 cr

The Margin Compression Trap: Inside the 3-Year EBITDA Degeneration

IP Rings is not in great shape on the bottom line. The consolidated financials make that clear.

Financial Year	FY22	FY23	FY24	FY25	3-Year CAGR
Sales (Rs Cr)	273	323	317	303	3.5%
EBITDA (Rs Cr)	33	26	23	21	-14%
Net Profit (Rs Cr)	8	2	-3	-4	Negative

The 3-year compound sales growth is just 3.5%, and EBITDA has shrunk from Rs 33 cr in FY22 to Rs 21 cr in FY25, a contraction of about 14%. Net profit slipped into the red in FY24 and FY25, before just barely recovering to Rs 1 cr on a trailing twelve-month basis. The TTM profit which sis just 1cr looks big percentage wise only because the base was so low (Negative).

The 9 months of FY26 tell a slightly more hopeful story. Sales have already crossed Rs 250 cr, operating profit is at Rs 21.5 cr, and net profit, while still tiny at Rs 0.6 cr, has stayed positive across each of the three reported quarters. Operating margins are stabilising around 8% to 9% after dipping to 3.6% in the December 2024 quarter.

The share price of IP Rings was around Rs 95 in May 2021 and as on 19^th May 2026 it was Rs 120.

The share is trading at a PE of a huge 163x even as the industry median is about 26x. The 10-Year median PE of the company is a modest 20x while the industry median for the same period is about 25x.

The Japanese disconnection: Assessing the post-partnership structural shift for FY27

On 28 April 2026, IP Rings and Nippon Piston Ring mutually terminated their long-running share subscription and technical assistance agreements, ending a three-decade Japanese collaboration. For a small auto ancillary, that is a meaningful structural shift. Whether it frees the company up or strands it without a partner will become clearer through FY27.

What works in the company’s favour is a textbook negative cash conversion cycle of -25 days. Suppliers fund the working capital, debtor days have come down from 90 in FY22 to 81 in FY25, and inventory days have trimmed from 236 to 185. Cash from operating activity has been steady at Rs 19 cr to Rs 42 cr a year. Free cash flow in FY25 was Rs 20 cr, against a current market cap of Rs 152 cr. That puts the stock at about 7.5 times free cash flow, even as the reported PE looks absurd at 163 because of the depressed profit base.

The stock trades at a price to book of about 1.5, with a book value of Rs 80 per share. Against an auto components industry where ROCE typically averages 14% to 16%, IP Rings’ 3.08% looks weak. But for the old-economy investor who buys based on assets, brands, and group lineage rather than current quarter earnings, the Amalgamations heritage is the underlying call.

The anti-momentum allocation: Escaping the sector-hype traps of Dalal Street

Govindlal Parikh has never tried to time the market. His core portfolio, dominated by EID Parry, Ramco Industries, Ramco Cements, Sundram Fasteners, TVS Holdings, Sundaram-Clayton and Rajapalayam Mills, looks almost identical today to what it did a decade ago. He buys when nobody is looking. He waits, sometimes for years. He refuses to chase momentum.

His family’s continued presence in KCP, a stock down 34% in the last year and trading near its 52-week low, is consistent with that template. So is the renewed look at auto ancillaries from the Amalgamations Group, even one as bruised as IP Rings. The two picks together send a clear signal. The veteran is leaning into beaten-down Tamil Nadu and Andhra industrial names at a time when the rest of the market is busy chasing AI, defence, and semiconductor narratives.

The big question for retail investors is whether this is contrarian conviction or simply the comfort of holding familiar names. KCP is the cleaner story, a diversified business at near book value with a 12% long-run ROE. IP Rings is the harder bet, a tiny ancillary still searching for operating traction after losing its Japanese partner. One feels like classic value. The other feels like a coiled spring, or a value trap, depending on which way FY27 numbers print.

Either way, a quiet investor with a public portfolio of over Rs 1.750 cr does not move on whim. The next few quarters of financials will tell us whether the man with an impressive memory on Dalal Street has read the cycle better than the crowd one more time. The smarter move for the rest of us is to add these stocks to a watchlist and keep an eye on the next set of filings.

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.