Whalesbook
Dolly Khanna Shifts Focus to Industrial Turnarounds
Veteran investor Dolly Khanna is reportedly shifting her focus from high-growth technology and AI stocks to undervalued 'old-economy' businesses and niche manufacturing. This pivot signals a keen eye for opportunities in sectors tied to the real economy, often overlooked for more speculative growth stories.
Prakash Industries: Boosting Steel Production with Integration
Prakash Industries, a steel manufacturer and power generator, is a key holding with increasing stake from Dolly Khanna. This reflects confidence in its backward integration strategy. The company is expanding its Bhaskarpara coal mine to 1 million tonnes annually, aiming to cut input costs for steel operations. Although Q3 FY26 revenue dipped to Rs 798.6 crore from Rs 925.9 crore year-on-year, net profit edged up to Rs 86.9 crore. This shows improved cost management and operating leverage. With steel production set to surpass 1 million tonnes, the firm is positioned for a potential infrastructure upswing.
Chennai Petroleum Corporation (CPCL): Expanding Refining Capacity
Chennai Petroleum Corporation (CPCL), an oil refiner, reported strong performance. Q3 FY26 revenue climbed 27% year-on-year to Rs 20,134.8 crore, and net profit surged 103.5% to Rs 3,137.7 crore, driven by better refining margins and efficiency. CPCL is progressing with its 9 million tonnes per year (MMTPA) greenfield refinery project at Nagapattinam. This project includes integrated petrochemical capabilities for long-term value. The company is also boosting sustainability by increasing RLNG consumption and adding renewable energy sources.
Rain Industries: Turning Around and Expanding into New Materials
Rain Industries, a global player in carbon, cement, and advanced materials, achieved a Q3 FY26 turnaround, posting a net profit of Rs 38 crore compared to a Rs 134 crore loss year-on-year. Consolidated revenue rose 17% to Rs 4,301 crore, boosted by improved margins and cost control in its carbon business. The company is also expanding into the electric vehicle battery supply chain. It is collaborating on coated spherical purified graphite production, with a demonstration plant in Ontario expected by early 2026.
Attractive Valuations and Future Outlook
Valuation metrics like EV/EBITDA, ROCE, and ROE for these three companies are generally below industry medians. Prakash Industries has an EV/EBITDA of 5.0 (vs. industry median 12.1) with competitive returns. CPCL trades at 4.7 times EV/EBITDA, and Rain Industries at 5.6 times. Analysts point out these are cyclical businesses, with performance tied to commodity cycles and economic activity. While valuations seem attractive, sustained improvements in returns and successful execution of integration and expansion plans are key for future growth. This strategy focuses on deep value in established industries over chasing speculative narratives.