Vijay Kedia’s latest bets: Rs 73 cr in 2 smallcaps with surging profits

The two stakes were worth about Rs 73 cr at the close on 21st October 2026. That is roughly 5% of the Rs 1,357 cr he publicly holds across 24 stocks. Small money for Kedia, but a loud signal. He is the investor behind the SMILE framework: small in size, medium in experience, large in aspiration and extra-large in market potential. SME stocks are where that idea gets tested hardest. Neither stake was built the usual way, through steady buying in the market.

One came through a share swap. The other began with a preferential allotment. And what both companies have told the exchanges in the past few weeks is more useful than the price Kedia paid. A word of caution before we go deeper. These are both SME stocks and trade in large lots, report results only twice a year and can be hard to exit when the mood turns. Investors should treat them as risky bets and size them accordingly.

Let us dive in. FE Stock Insights on WhatsApPGet instant alerts on high-conviction investment themes and fundamental deep dives—direct from Financial Express.Join now #1 Sattrix Information Security: Vijay Kedia’s SME Cybersecurity Position Incorporated in 2013, Sattrix Information Security builds and runs cybersecurity systems for companies in India, the US and the UAE. Its work covers round-the-clock security monitoring, software licences, implementation and managed security services.

The company listed on the BSE SME platform in June 2024 at an issue price of Rs 121. At Rs 304.75 on 21st October 2026, the stock trades at about 2.5 times that price, with a market cap of about Rs 346 cr. The Share Swap Mechanics: What Kedia’s 8% Equity Stake Actually Cost In February 2026, Sattrix bought 100% of Sattrix Software Solutions, an unlisted firm run by the same promoters, for Rs 157.83 cr.

It paid in its own stock, issuing 45,48,379 new shares at Rs 347 each, as per its BSE filings. Kedia Securities was a shareholder in the unlisted firm and received 9,14,906 Sattrix shares in the swap. What is new is that the stake now appears in the September 2026 shareholding pattern. At Rs 304.75, that holding is valued at about Rs 27.9 cr, against roughly Rs 31.7 cr at the swap price. Valuation Realities: Decoding the 52x Sales Multiple in the Sattrix Acquisition The firm Sattrix bought had a turnover of just Rs 3.02 cr in FY25, as per the company's disclosure to BSE.

The price works out to about 52 times sales. Promoters sat on both sides of the deal and received most of the new shares, lifting their stake from 73.53% to 74.96%. The company has said the deal was done at arm's length and backed by an independent valuation. Most of that price now sits on the balance sheet. Fixed assets jumped from Rs 7.44 cr in FY25 to Rs 163.78 cr in FY26. That is why book value looks large at Rs 179 a share, and why return on capital employed slid to 9.6% from 23.6% a year earlier.

Sattrix FY26 Earnings Analysis: Revenue Acceleration Meets Margin Compression Financial YearFY21FY22FY23FY24FY25FY265Y CAGRSales (Rs cr)21.1222.9436.5940.3744.6360.8324%EBITDA (Rs cr)3.302.664.902.516.8912.4730%Net Profit (Rs cr)1.942.144.001.804.058.0833%Source: Screener.in EBITDA here refers to operating profit before other income. FY26 was the company's best year by a distance. Sales rose 36% and profit roughly doubled.

The second half did the heavy lifting, with operating margin at 27.7% against 12.1% in the first half. That is the half in which the acquired business joined the books. The cash story is weaker. Debtor days rose to 234 from 177 a year earlier, which means customers are taking about eight months to pay. Cash from operations was just Rs 2.23 cr in FY26, against operating profit of Rs 12.47 cr. Cybersecurity Order Book Dynamics: Navigating the Volatility in Monthly Disclosures Sattrix files monthly order updates with BSE, and they swing hard.

Orders came to Rs 12.45 cr in June and Rs 18.17 cr in August. In between, it won a three-year Rs 9.3 cr order from a public sector bank and a one-year Rs 17.35 cr contract from a private bank. September brought orders of only about Rs 47.5 lakh. The filings themselves have needed fixing. In April, the company rectified a disclosure on a Rs 9.30 cr bank contract. It later corrected its June order figure.

On 7th October, it withdrew a press release on September orders that it said was issued by mistake, then filed a revised one. Small slips, perhaps, but monthly updates are much of what SME investors have to go on. Sattrix Valuation Metrics: Assessing the 42x PE Ratio Against Sector Averages The stock trades at a PE of about 42x and the industry median currently is 24x. A 10-year median PE comparison is not possible here as Sattrix has been listed for under two and a half years.

The share price is about 32% below its 52-week high of Rs 451. Some of the damage came from a sector-wide scare. In February, when Anthropic launched an AI tool that finds flaws in software code, Kedia's cybersecurity holdings sold off, and Sattrix fell 5% that day. It operates a fleet of about 285 vehicles, as per CARE Ratings, and counts AWL Agri Business, Jaquar and Emami Agrotech among its customers.

It listed on NSE Emerge in May 2025 at Rs 95, and opened 10% lower on day one. At Rs 375 on 21st October 2026 the stock has jumped close to 300% since listing. It trades at nearly four times its issue price, with a market cap of about Rs 432 cr. Preferential Allotments and Bulk Deals: The Making of Kedia’s 10.35% Iware Stake On 5th June 2026, Iware allotted 7,90,800 new shares at Rs 255 each in a preferential issue.

Vijay Kedia and Kedia Securities took 3,45,600 shares each. On 8th July, Kedia Securities bought another 5,00,400 shares in the open market at about Rs 348, as per NSE bulk deal data. The seller that day was promoter entity Inter India Roadways, which sold a 6.12% stake. Promoter holding has fallen from 74.09% in March to 69.01% in June, due to the new shares, and to 62.84% by September, due to the sale.

Kedia's 11.9 lakh shares cost him about Rs 35.1 cr, or roughly Rs 294 each. They were worth about Rs 44.7 cr at Rs 375, a gain of around 27%. Iware Supplychain FY26 Financials: Top-Line Expansion Amid Operating Margin Pressures Financial YearFY21FY22FY23FY24FY25FY265Y CAGRSales (Rs cr)18.9024.3543.5558.7185.82257.6669%EBITDA (Rs cr)2.203.056.2110.8817.0029.1068%Net Profit (Rs cr)1.060.970.424.178.0215.0670%Source: Screener.in EBITDA here refers to operating profit before other income.

The growth is real, but read the five-year profit CAGR with care. It starts from a base of about Rs 1 cr, so it flatters. In FY26, sales tripled to Rs 258 cr while operating margin fell to 11% from 20%. Profit still rose 88% to Rs 15.06 cr. Cash went the other way. Operations used up about Rs 20 cr in FY26 as receivables swelled, and borrowings rose to Rs 70 cr from Rs 30 cr. Debt Strain and Liquidity Risks: Evaluating the CARE Ratings Downgrade for Iware On 8th October 2026, CARE Ratings assigned a CARE B+ rating with a stable outlook to Iware's Rs 73 cr of bank loans.

The company disclosed it to NSE the next day. B+ sits well below investment grade. CARE called liquidity stretched. It noted delays in loan instalment (EMI) payments in the 12 months to August 2026, with the last one in May 2026. That was weeks before Kedia's open-market buy. Its cash credit limit was used about 80% on average, peaking at 92%. And the top two customers made up 75% to 82% of sales over the past three years.

CARE expects yearly cash earnings of Rs 21 cr to Rs 24 cr through FY29. Debt repayments will take about Rs 17 cr to Rs 18.5 cr of that. Iware Market Valuations: Factoring Price Premiums and High PE Ratios Iware’s share trades at a PE of about 30x and the industry median currently is 26x. On book value, it is far pricier at about 7.2 times. A 10-year median PE comparison is not possible, as Iware has been listed for only 17 months.

The stock is about 30% below its 52-week high of Rs 539.40. Vijay Kedia SME Portfolio 2026: Forward Outlook and Key Financial Triggers to Watch Kedia did not buy either stock the way a retail investor would. One stake came through a share swap. The other started with a preferential allotment and was topped up from a promoter who was selling. The price he paid says little about the price on your screen.

The businesses are mirror images. Sattrix has fat margins but slow-paying clients and a costly deal with its own promoters. Iware is growing fast on thin margins, with heavy debt, two big customers and a credit rating that flags strain. 1% profit growth: Why Hindustan Zinc still trades near its 52-week low Both companies will report first-half FY27 numbers in November. For Sattrix, watch whether receivables come down and cash catches up with profit.

For Iware, watch whether loan payments stay on time. Until then, a sensible move would be to add these stocks to a watchlist and keep a 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, including filings made available on the BSE website.

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