As an investor, it is easy to get caught up in the hype of big companies and fast-growing trends. The prime-time discussion and the videos most people follow speak a lot about them after all. But the Warren Buffetts of India are a different breed. They are known to see things most investors tend to miss. They are always on the lookout for a ground floor entry into what they think are future multibaggers.
Especially when the less known companies demonstrate they are champions of capital efficiency by making the most on the capital they put into their business. These companies might not be the most famous, but they have a knack for turning every rupee they invest into enviable profits. Some of the Warren Buffetts of India have already found a couple of these hidden gems.
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Let us look at 2 such less known smallcap companies, that have caught the attention of some of the biggest names in the investor circles.
Vadilal Enterprises Ltd (VEL)
When you think of ice cream, one of the first names that pops up in your mind is this company.
Incorporated in 1985, Vadilal Enterprises Ltd does marketing and distribution of ice cream, dairy products, frozen desserts and processed food products. It is a part of Vadilal Group along with Vadilal Industries Ltd. As a brand, Vadilal is the 2nd largest ice cream brand in India, with a 16% market share in the organized Indian ice cream market.
With a market cap of Rs 689 cr, VEL has a current ROCE (Return on Capital Employed) of almost 39%. Which in simple words means that the company makes Rs 39 on every Rs 100 it puts into the business as capital.
The company can then use this money to expand or pay back to investors as dividends. When compared to the peers in its group, VEL has higher ROCE than its contemporaries like Adani Enterprises (9.9%), Aegis Logistics (15%) and Cello World (36%).
Sanjiv Dhireshbhai Shah, is one of India Warren Buffetts and a prominent Indian businessman. He is also a philanthropist known for his significant contributions to various industries.
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