3 weeks ago
Why Ashish Kacholia Owns Two Punished SME Defence Stocks
An Indian investor named Ashish Kacholia is famous for finding small companies that grow into big ones.
He bought shares in two very small companies that make things for the army and for airplanes.
These companies trade on a special part of the stock market called the SME platform, where buying and selling can be slow.
Their share prices have fallen a lot - one dropped by about half and the other by about 70 percent.
Instead of leaving, Kacholia bought even more shares when prices went down.
The companies are growing their sales quickly, which is exciting, but they also have problems like waiting a very long time to get paid by customers.
One company reported profits but actually spent more cash than it earned.
Some people believe these companies will become big winners because India wants to build more defence equipment at home.
Others worry they are too risky because reported profits look better than the real cash coming in.
The article says you should watch these companies closely but not copy Kacholia's bets blindly.
Star investor Ashish Kacholia holds stakes above 3.5% in two SME defence stocks: TechEra Engineering and C2C Advanced Systems, both on NSE Emerge.
TechEra Engineering, an aerospace and defence precision tooling maker, has fallen about 49% from its 52-week high of Rs 326 to Rs 166.
C2C Advanced Systems, a defence electronics company, has corrected about 72% from its all-time high of Rs 954 to Rs 265.
Both companies carry red flags: TechEra has debtor days of 178 and a PE of 122x, while C2C has debtor days of 602 and FY25 operating cash flow of negative Rs 115 cr.
Kacholia raised his stakes as prices fell, treating positions of roughly Rs 17 cr each as venture-capital-style bets in a portfolio worth thousands of crores.
- Who
- Ashish Kacholia, a prominent Indian small-cap investor, and the two SME defence companies TechEra Engineering (India) Ltd and C2C Advanced Systems Ltd
- What
- Kacholia has built and increased stakes in two SME defence stocks that have fallen sharply from their highs despite strong revenue growth, while facing valuation, cash-flow and governance concerns
- Where
- India, on the NSE Emerge SME exchange platform
- When
- As of August 5, 2026 share prices, with the latest holdings disclosed for June 2026 (TechEra) and March 2026 (C2C)
- Why
- Kacholia follows a venture-capital-style playbook of buying young companies early and letting winners grow over years, betting on India's defence self-reliance theme
Bull Case: Long-Term Growth
Bear Case: Overpriced Risk
Growth vs. Valuation
Bull Case: Long-Term Growth
India's defence self-reliance push gives small certified suppliers with real order books a long runway; today's messy numbers are the growing pains of businesses scaling faster than their systems.
Bear Case: Overpriced Risk
TechEra earns Rs 3 cr but is priced at 122 times earnings, and C2C reports profits it has not collected in cash; both trade on an illiquid SME platform where 70% drawdowns happen.
Financial Health
Bull Case: Long-Term Growth
Revenue scale-up is real - TechEra sales grew 6 times in five years and C2C grew from Rs 1 cr to Rs 146 cr; C2C management is acting, with a new CEO and expected receipts of Rs 20 cr by end-July and Rs 60-75 cr in August.
Bear Case: Overpriced Risk
Debtor days of 178 (TechEra) and 602 (C2C) show cash is not being collected; C2C's operating cash flow was negative Rs 115 cr in FY25, borrowings climbed to Rs 55 cr, and FY26 profit of Rs 18 cr leaned on Rs 16 cr of other income.
Owner Commitment
Bull Case: Long-Term Growth
Kacholia raised his stake in both companies while prices fell, signalling confidence that winners will grow into their valuations over years, not weeks.
Bear Case: Overpriced Risk
Promoter holdings are shrinking (TechEra from 42.3% to 36.9%; C2C from 41.35% to 37%), domestic institutions exited TechEra, and TechEra's CFO resigned with the promoter's son stepping into the role.
Key facts
- Kacholia's TechEra stake
- 3.57% as of June 2026; about 6.3% including Suryavanshi Commotrade, worth roughly Rs 17 cr
- Kacholia's C2C stake
- 3.82% as of March 2026, worth about Rs 17 cr at a market cap of Rs 445 cr
- TechEra price move
- ~49% correction from 52-week high of Rs 326 to Rs 166 (Aug 5, 2026)
- C2C price move
- ~72% correction from all-time high of Rs 954 to Rs 265 (Aug 5, 2026)
- TechEra FY26 financials
- Sales Rs 48.5 cr, net profit Rs 3.1 cr; PE 122x vs industry median 66x
- C2C FY26 financials
- Sales Rs 146 cr, net profit Rs 18 cr (incl. Rs 16 cr other income); PE ~24x vs industry median 67x
- C2C cash position
- Operating cash flow negative Rs 35 cr (FY24) and Rs 115 cr (FY25); debtor days 602; borrowings Rs 55 cr
- TechEra governance flags
- Promoter stake fell from 42.3% to 36.9%; CFO resigned in July 2026, replaced by promoter's son
Sources
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