Aman Portfolio Feedback Required


(amanbindra) #1

Hello, I am sharing my portfolio with weightages below and small description of my reason for investing in the company. I had started investing at 21 when i got my first salary. Turning 24 in Dec and have a long term horizon of minimum 5 years and longer for business like Insurance /Banking where i plan to hold my stocks for longer.

Would be grateful if fellow members can give their feedback/Suggest restructuring. The portfolio is currently around 75:25 ratio in Equity VS MF(All ELSS ).

|Trading Symbol|Qty Available|Buy Avg|

|ASHOKLEY|574|108.4| 22% Weigtage
|ASIANTILES|18|480.1| 1 %
|FEDERALBNK|64|78.3| 3%
|HDFCLIFE|68|460| 5 %
|INDUSINDBK|4|1727| 1%
|INFY|7|710.4| 1%
|ITC|55|277.2| 5%
|NBCC|55|85.8| 2 %
|PCJEWELLER|16|278.5| 1%
|RELIANCE|6|405.4| 2%
|SPICEJET|22|111.2| 1%
|STRTECH|160|236.9975| >20 %
|SUNPHARMA|37|590.16|
|TATAGLOBAL|45|253.8|
|TATAMOTORS|13|244.3|
|TCPLPACK|5|426.13|
|TITAN|3|882|
|UFLEX|200|325.8| >20%
|YESBANK|180|278.3| >20 %

The Portfolio was in the green at the start of the year by around 20%, now has come into the red by around 5-7 %(Averaging down in Yes Bank Helped).

I will share my rational behind some of the larger holdings(% wise) in the following post.


(amanbindra) #2

Uflex - India’s largest flexible manufacturing company in a growing industry . The diffrentiator is that they have come up with their Aseptic Packaging plant and the entire market was handled by tetrapak (Complete monopoly). They had invested 560 Cr in their plant which is operational now and the first set of packaging is already in the market.

Challenges: Crude rising impacts margins/The Management is not clean. But trading at 0.6 book with a great set of long term clients and multiple business vertical ensuring a good growth is too tempting to miss. My biggest bet of this portfolio.

Indusind and Yes Bank: My employer is a company in the business of supplying Security Instruments like Cheques/Debit & Credit Cards etc to almost all banks in the country. Indusind and Yes are my clients and my personal experience with them has been phenomenal, Indusind specially with the Bharat Financial Version are really looking to tap at the Rural Segment as can be seen in the growth of their FI business. Lapped up more of Yes bank at around 200 Levels .

Sterlite: Long term bet on the 5G revolution with a stellar book and growth trajectory. Started buying at 100 levels. Now slighly uncomfortable at these levels and not adding more( Need advise here)

Ashok Leyland: Personally i want to hold this for very long but the new axle norms have hit this stock hard. I feel when the electric bus revolution comes in they will have the first mover advantage. Defence is another strong category for them.

HDFCLIFE: Insurance has less than 2% penetration in India and with every quarter private players taking the pie for LIC, i feel this should be a long term compounder specially with the HDFC name . Want to add more but no funds available.

Other than that al other shares are just tracking positions or misplaced buys like trying to catch a falling knife like PC Jewellars.

Please feel free to add your comments, also if there are any queries behind the rationale of investing in any stocks, let me know.

Would also be grateful if someone can add their 2 cents on NBCC.


(Ganhk) #3

There were some serious allegations in the
past about uflex promoter. Hope you know.otherwise pl google it.


(amanbindra) #4

@Ganhk - Yes i have read about the same and even today some are their busineses are not clean like excise labels, in hindsight the stock and the company did recover from the setback of Promoter being in jail . The business has been growing . Do you believe fundamentally the company is doing fine?


(Ganhk) #5

I don’t know frankly. An year ago I thought the stock is attractive. Then I read about the promoter. And I decided not to invest. Market usually look upon such companies with suspicion. You never know something comes up. If you are fully convinced you should brush aside such doubts and go on with the investment.


(Koka Vikram) #6

I find the following in Screener in the Cons section:

The company has delivered a poor growth of 5.73% over past five years.

Though the company is reporting regular profits, it is not paying out tax

Company has a low return on equity of 9.18% for last 3 years.

Contingent liabilities of Rs.629.70 Cr.

Dividend payout has been low at 6.42% of profits over last 3 years

Further,

ICRA Rating was suspended in 2016
They did not obtain ratings from CRISIL. Which became a standard if you are credit worthy.
Now rated by India Ratings( a Fitch company it seems). This is the first time I am seeing any company rated by them. May be my ignorance.

If promoters are not trust worthy, I would be better off going to Casino and enjoying. I am not motivated much to analyze numbers or the business further as I made up my opinion.


(amanbindra) #7

Hi @kokavikram .

Thanks for sharing your feedback, its my request that let’s not make it a Uflex exclusive discussion, i would really like if you could share your feedback and VP team on the overall portfolio.

Further coming to the points mentioned.

The Jammu Plant is given subsidy by the Government, that is going to be over soon and i hope that tax payment should start showing on the BS.

They have done heavy Capex for the Sanand Plant and Printing and Packaging is a Capex Heavy Business where regular investment is required, maybe that is hindering the growth and also the reason for Low ROE?

Thanks for sharing Divided payout information, did not know it is so low.


(Sanchit0403) #8

Aman, I think its better to avoid companies with corporate governance issues. If the promoter is unethical and doesnt believe in sharing weath with shareholders then a share is practically worth Rs 0 . A good indicator of this would be companies making profits and stashing it away in their balance sheets without any visibility on capex plans.


(Sanchit0403) #9

Also, in the automobile space I would recommend you try and find companies that would be immune from EV revolution. It is very difficult to predict the winner when the whole dynamics are going to change. Example: Nokia lost out in the transition from feature phones to smartphones.

In such cases the terminal value could be anything from a huge range of possibilities and as you would probably know around 60 - 70% of any stock is in its terminal value.

If you want to bet on an OEM, find a supplier of theirs who has a well entrenched position , will grow with them and will still be safe if your selected OEM doesnt win the EV race.


(Koka Vikram) #10

Here is my take on the overall portfolio.

If we go by the words of investment gurus, too much of diversification would not do us any good. ETF could be stress free alternative than diversifying ourselves . Perhaps, it would be worthwhile to consider reducing overall number of stocks ( I am guilty most of the time violating this rule)


(amanbindra) #11

Got some funds in terms of Yearly Bonus. Added 15K each in AB ELSS and L&T Long term fund.

Further 60K put in equity. Increased holdings in NBCC/Reliance/HDFC Life Insurance and a little bit of Sterlite.

Will share updated portfolio with new allocation %.

Portfolio is currently down 1.5% .