Deepak's portfolio requesting feed back


(bully) #1
                     Price 	Percentage

MUTHOOTFIN 387 30.3%
CAPF 652 19.1%
AARTIDRUGS 581 13.4%
KRBL 451 7.9%
DEEPIND 191 6.2%
CANFINHOME 435 5.6%
PREMCO 397 4.3%
SKIPPER 231 4.0%
TIGERLOGS 201 3.4%
YESBANK 295 3.2%
UJJIVAN 332 2.4%

Hi I had been oblivious of this site for long and by just looking at the nifty returns from 2010 till 2014, i thought i wasn’t missing equity as an asset class since in those four years nifty was giving pedestrian results. After going through this site during infy buyback i realized how superficial i was. companies were discussed in detail and their financial numbers were crunched at the minutest detail some of which were beyond my comprehension. so when markets corrected a bit in February i started nibbling in .

  1. MUTHOOTFIN: great Q32018 results and i still dont understand why the stock corrected so much after the profits skyrocketed( maybe growth concerns??) and the stock offers a decent 20% upside in a small time frame
    2.CAPF : Vaidyanathan and how he transformed a retail lending company and when everyone were hoping CAPF would get rerated he merged it with IDFC giving me a decent entry point.
    3.AARTIDRUGS: diversification in my portfolio which is heavily loaded with NBFC and banks. December results were good.
    4KRBL : Diversification again and got it for 25% discount from the price where ace investor Pabrai picked it.
    5.DEEPIND: dint think ONGC issue would pull it further down after i thought all negatives are priced in. waiting to see how it unfolds in the Q4 results. Also bought it at a time southwestpinnacle was getting listed… so i hoped it would get a run up (alas i miscalculated)
    6.CANFINHOME: riding on the housing finance story. may be i boarded it too late
    7.PREMCO: bought it just before the results hoping this quarter they would have turned around but poor execution again. probably one stock in my pf where im not so happy with the performance but the story kept me holding on to it.
    8.SKIPPER just bought in correction happy with the script
    9.TIGERLOGS diversification in to logistics and this i could get at a decent valuation…

I know my portfolio lacks the zing (multibaggers/ great story waiting to unfold). learnt a lot from this forum so hoping to learn from the feedback as well.


(Jaclyn) #2

While I am invested in Yes Bank & Can Fin Homes, let me talk about something else which is common to my stock portfolio, that is ~50%+ being invested in financial sector. Your portfolio has that similarity. But my top holding in a company is <15%.

Since these are leveraged entities they can go bust very easily against all our assumptions and hopes. But if that happens, I would absorb the shock and still will have a good sleep. What would you do? Think.

Looking at your nick name, hope I am not bullying you. :smiley:


(Dinesh Sairam) #3

Any specific reason for the concentration in the BFSI segment? Just curious. Do you have good insights into the industry?

What is the story you hope will unfold in Premco Global? I have been tracking the stock for quite some time now. We could share notes.

Have you visited the VP thread on Skipper? You ought to. It would be interesting to know your takes on the accusations levelled against Skipper.


(Susindar) #4

Your biggest holding is Muthoot. Is there any specific reason for your high conviction? I think it had been a laggard for a while. GNPA/NNPA was very high in the most recent quarterly result which I think is the reason for its underperformance. 5 years sales and profit growth was only 5% for this script. Manangement doesn’t seem to be very aggressive in diversifying or scaling up operations like Manappuram. Although the price seems to be good now with decent dividend yield. Looks like an average script to me. I also held CAPF, but got disappointed with merger and sold. I think the combined entity will be a drag before things pick up.


(bully) #5

As you could see my top holding is in gold mortgage company whose loans are secured and is owned 73% by promoters. yes bank and capital first have great management and canfinhome is the only stock which is in green in my current pf(because of the good entry point). if these companies goes bust then i dont think other sensex and nifty companies would survive the onslaught… my exposure in equities is very minimal at this stage… so it shouldn’t matter

by the way if u could suggest some good scripts i will look in to it.


(bully) #6

Hi Susindar, thanks for your reply… i had followed your comments in this forum and im glad u posted here.

Muthoot if you look at the recent quarters the profit has zoomed in to 400 odd crores territory. Its subsidiaries have contributed in this quarter with profit showing increase approx 60% yoy… past five years is a long time frame to look in to its performance as it had some regulatory issues which pushed its price to 70 odd levels at one stage (gold can be mortgaged to lesser percent of its value as compared to before )…it can be an opportunistic bet … would be happy to get 20-40% upside and move off to better scripts… till i get a better understanding and opportunity in markets its a stop gap arrangement.Gross NPA of 1.5% is not that bad and also the loan is not unsecured . its collateralized.

CAPF yeah true agree with you. but it has a couple of more quarters to post results . i cant be very sure the merger would be a drag …what if the synergies work out favorably… its a private entity so why it has to take time to get in shape.


(bully) #7

Hi Dinesh,

learnt so much visiting your page…u introduced me to aswath and bakshi…i got ur valuations excel on krbI… had to go through it though… was getting started on valuations in ‘intelligent investor’ book but lost track… have to start reading again. i digress but coming back to ur points

I work as credit analyst in a automobile company but have no domain knowledge on BFSI … i have financial math and Business economics certification from actuaries institute… the great exposure to BFSI is because… i found the FMCG valuations expensive, Airlines and hotels in india are seldom making profits (especially when oil price is bouncing back) … lets not talk about cyclical sugar/steel industry plagued by over production and commodities price do crash sometimes …large cap IT companies growth have moderated and the challenges facing them now seems formidable… Auto stocks are in 30 multiples now, expensive in my view since the mobiity solutions and crumbling infrastructure means companies wont be able to see that many cars/bikes in future…dont know very good about auto ancillary industry

just my opinion though… if india have to grow to a 5 trillion economy then the financials would have to grow… im just choosing few safe players…

i currently dont have a long term growth story…till i develop my conviction on a long term story im just picking these safe scripts to play with…

nothing more than u already know about premco global … just that our fascination with jockey and haynes… u saw how page industries story panned out… hoping premco would come stronger after the poor vietnam plant execution… giving it some time a couple of quarters perhaps


(Susindar) #8

IFor Muthoot, last quarter GNPA was 5.5% and NNPA 5%. I wonder what would have been the actual profit if there were substantial provisions of let’s say 3% bringing NNPA to 2.5%. Probably management has a reason to not provide (maybe they expect to recover fully by selling gold). But the slippages were huge YoY which is a concern none the less.

CAPF May gain by synergies. But CAPF is probably only 20% of the combined entity and IDFC Bank is performing bad with halving of YOY profit. That’s why I think it will take a while for the combined entity to show good growth.


(bully) #9

Thanks for the information. And i have been breaking my head all this while why the stock price haven’t gone anywhere :slight_smile:


(Jaclyn) #10

We as a social animal look at if things go wrong how many others are also affected and from that we console ourselves that we were not alone in making the mistake. That is just a consolation. But what is needed is safeguarding ourselves irrespective what happens to others or how many others sink. From that perspective without high level of understanding too much concentration can turn out to be a risky affair.

But you have the consolation that your exposure to equities is said to be small. So any shocks can be a fee for your learning. Starting with diversification and then slowly concentrating as you get a hang of it may be a better option.

Through my statements, I do not mean that any of your holdings have some fault. It is just a caution which I highlighted.

As a CAPF shareholder, what IDFC brings to the table may be pain for some time to come than immediate benefits. That is my view. Probably you can listen to this video on Anil Singhvi’s argument against the broken merger of Shriram with IDFC.

Anil Singhvi’s arguments

Piramal & PNB Housing are two other financial sector companies which look interesting to me. You can explore them further.


(bully) #11

Cool interview but i think the person is a bit rude though.


(Jaclyn) #12

Oh yes, he had to be when it was 2:1. :slight_smile:️ Jokes aside, we need to look at the substance of his arguments rather than judging him for what he is or how he argued. Everyone of us have our own weakness, so let us ignore that and enjoy the positive side.


(bully) #13

So from the portfolio from being 5% in green it has gone to 10% in red. KRBL and Deep industries are two tainted companies in my portfolio. Dont know what to do with them at this point. Premco , god knows why i just keep waiting for one quarter results to next with poor results and even poorer results. Most of other stocks have been laggards too. Indeed its been tough phase in general with small caps and madcaps under performing. what a roller coster ride it has been the past 3 months following all the news closely. Takes a toll. Sometimes feel it is just not my cup of tea.


(mylu) #14

That is stock market… Patience is very much required here… You must have complete confidence of selected companies and hold on it during downside.

Yes bank is sure long term stock… You can even accumulate as well.

I would like know more on tiger logistics… Any uniqueness which u found compared to other players?


(bully) #15

Hi thanks for replying.

Most of the information i gather from this forum. its a logistic company started by first gen enterpreneur available at reasonable valuations when i bought it(or atleast i thought so when i bought).


(bully) #16

how prophetic your words were. Highly leveraged companies going bust. Witnessed in yesbank but added in recent fall. Anyways since then sold my holdings in muthoot finance after the quarterly results. stocks keep moving sideways.

from the liquidity i again nibbled in to financial companies like edelweiss, dhfl, repco . also bought into rain and averaged premco after the quarterly results and going through their AGM. High hopes on premco and rain in this quarter too.

In addition added kiri industries since chemicals are on upswing after so many china closures clamping down on pollution. Also the special opportunity of dystar.

added skipper hoping they turn around… management buying in to the script gave me confidence to add further

portfolio roughly down 25% but by this time im used to the volatility. Once the market recover i will cut down my weight on financials.


(Jaclyn) #17

If you want to cut down on financials, it should have been done yesterday or today and not tomorrow. :grinning:


(bully) #18

Could you please elaborate. Are you saying that financials are doomed in near future


(Jaclyn) #19

What I meant is if you have decided financials is occupying too much of your portfolio and you feel uncomfortable, it is time to adjust now and not tomorrow. How the market behaves is not in your control, but what portfolio allocation you want is in your control and do that.


(bully) #20

nice reply, thanks. let me see how the future pans out. the results for this quarter would be out soon and then its time to reappraise