Divyansh jain portfolio

Hello all
My portfolio weathered well the last year downturn as ttk prestige , yes bank and Bajaj finance helped me in achiveing 15 % plus. Have added more of Safari and 3 m India in meaning ful way. The portfolio is of six stocks as of now

  1. Bajaj finance
  2. Piramal enterprises
  3. Yes bank
  4. Ttk prestige
  5. 3 m India
  6. Safari industries.
    It’s a very concentrated portfolio and I am looking for a name or two at Max to add.
    Views and comments are welcome
    Regards
    Divyansh
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Hello all
Recent updates on my portfolio…

  1. I have exited Bajaj finance at 3500 and piramal at 2350 … Bajaj was 4 bagger plus for me in a time period of less than 3 years and piramal gave around 50 % return …
  2. I sold off my yes bank at no profit or loss after the management came out with new npas and provisions. I think yes bank will take lot of time to be profitable and the cleaning process though healthy is painful. Since my buying price was pretty low …arnd 160 or so …I exited.
  3. I am currently in 70 percent cash and only hold three stocks in my portfolio.
  4. 3m India
  5. Safari industries
  6. Ttk prestige .
    I came into cash on the day of election results as I was really uncomfortable with the new highs when things on ground are real bad. There is a bad liquidity squeeze which has affected even consumption. The govt and the rbi have little leverage to correct this one. Earnings are no where in sight and there is for sure no feel good factor as I browse lot of companies for quarterly performance. Maybe except few chemical and financials where the valuations are too high.
    Globally also things look ripe for a slowdown. These are my personal views and I might be completely wrong. But I have realized the power of cash in bear markets and corrections. According to me this is the time to wait and enter at bargain valuations or let the earnings speak for themselves.
    Few companies I am willing to get in
    Are a ) indusind bank
    B) Bajaj finance arnd 2500
    C) 3m India , godrej consumer , britannia
    Also looking out for few small caps as I am sure a correction will offer decent bargain sooner than later .
    Views are invited
    Divyansh
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So the idea to be in cash might not be that bad after all. Though timing the market is futile but staying away from overpriced stocks is also decent. While the market was not factoring in any severe slowdown I think that is where most of people will get surprised. I am still in 70 percent cash and will not budge till I find valuation comfort. Though I have started tracking positions in few companies so as to keep monitoring their performances .
New additions for tracking :slight_smile:

  1. Nocil
    2.occl
  2. Indusind bank

Regards
Divyansh

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Then how come you are invested in Prestige when the PE is 48 and you average price must be 6000 or so? And 3M you must have bought at 20,000 but even that was high? Safari’s PE must have been high too at 50 when you purchased?

Valid points
Here I am willing to be a long term investor. Also I like their business quality and long runway ahead. So the strategy is to accumulate on all dips. Rest if I had exited all of my stocks, then becomes boring to follow and track the markets. Personally holding good ideas for long is also good for the temprament. :wink:
Regards
Divyansh

2 Likes

Hello all ,
Markets have been crumbling and it’s a sale going on. Though It might just be a start of a long price correction , staggered buying is what I believe in. I have started buying

  1. Indusind bank
  2. Vip industries
  3. Nocil
  4. Occl
  5. Aarti
  6. Britannia
  7. Godrej consumer
    Have only deployed 20 % of additional capital as of now. Still holding around 50 % which I will be deploying on further time or price correction.
    This is my third bear market , first being the 2008 , second 2013 and now 2019. Hence I don’t worry much and focus more on business quality , management and finally valuation. Also thanks to almighty I have decent reserve liquidity to invest in case of sudden opportunities…
    Old holdings where the corrections have been deep are ttk …avg buying price 5900 , safari avg buying price 720 , nocil 110 … Occl 1100, 3m India 22000
    Views are invited
    Regards
    Divyansh
4 Likes

@dj123 Have been tracking OCCL for quite some time with no position yet.
With the auto slowdown what is ur view on OCCL as they supply key chemical to the Tyre industry which in turn is supplied to auto sector

Sorry for the late reply…
Occl is a superior business according to me. Just check the way they have been growing and developing their products. Radial tyres need even more such treatment. Their opm and npm are something really rare and the company has been in business long enough. Even in previous downturns they were not affected much and continued with business growth and wealth creation.
Disc : invested

Hello all…
Update on my portfolio…
Throughout August I kept accumulating the stocks mentioned in my list… With ion exchange as a added name…
I am also now interested in crompton consumer durable as I was still under the impression that thapars were part of the promoter group. But just realised they are not. I think crompton has most of the qualities to scale up…

  1. Excellent product portfolio and decent brand recall.
  2. Ability to market and launch new products.
  3. There are early signs that they are gaining market share.
  4. Their products are of high quality and in good demand. Few product categories look encouraging. Fans, pumps, air coolers and food prep etc… Under a single brand name
    I also sold off all my gold etc at 3520 (hdfc gold etf) and booked profit of arnd 17 % … This should help the portfolio to stay neutral in such difficult market.
    Looking to buy aarti and ion exchange and crompton aggressively in further market correction.
    Still in 25% cash and keeping 25% more capital in untapped credit lines if the market gives the opportunity…
    Views are invited
    Regards

Hello all
Updated portfolio

  1. Indusind bank
  2. Aarti industries
  3. Ion exchange
  4. Britannia
  5. Apl Apollo
  6. Lux industries
  7. Max financial
  8. Godrej consumer
  9. Motilal oswal
  10. Marico

Since the market is giving to buy stocks at lucrative valuations , I am willing to buy more on dips for next few weeks. I have this observation and would like to extrapolate it that the small cap and midcaps will outperform the major indices for next 24-36 months and hence I am mostly looking for opportunities there.
Stocks I am willing to buy on dips
Mas financial
Transpek
HDFC life
Britannia
Aarti
Apollo tubes
Garware

Regards

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After having read capital cycle (and thanks for the beautiful writeup!), will you consider reallocating some of your capital to other businesses? Its clear you were quite bullish on leveraged financials, consumers and chemicals in the last post. Any changes made? Thanks!

  1. Thats why i said " i wish i would have read the book earlier". All this while i was mainly reading about moats, companies with superior returns and management attributes. All this though important doesnt give the real picture of the industry where the business operates and also kind of limits one as to how one should value them.
  2. Major learning for me during the covid lead crash was the understanding that financials are like double edged sword…as in tthings can go real bad for them real soon (though vice versa also hold true till certain extent). I took big losses in indusind as the bank was recovering from a big npa mess (in hindsight that was not the case though) and had over allocated with price anchor also in play. infact not for covid the bank could have given decent returns but one should be prepared well. Now i have fair bit of idea as to how and when financials should be brought ( during the downcycle of credit cycle coupled with the past history of management to navigate through such situations and finally the ability to collect the money back)
  3. As of now i am avoiding financials but do plan to own few after the picture becomes clear post the moratorium/covid lead npa becomes little clear.
  4. I was quick to add on to pharma names , like alembic pharma, neuland labs and shilpa being the latest one. i also made decent money trading long positions in few pharma names like cipla/dr reedy. i am also a active trader (swing/intra) both.
  5. New additions post the book have been KRBL, i did devote good amount of time reading about the basmati industry and how KRBL stands to gain. One rival did recently go bust and the industry was consolidating with KRBL being the leader. The market has its own reservations as of now but according to me its a good pari-mutuel bet being offered.
  6. second addition and increased conviction came into APL Apollo tubes where in the management commentary brought out that the weakers players are finding it difficult to survive. they are pretty confident of increasing their market share and surprisingly cash flows have also increased.
  7. i have exited all the financials , motilal at 10% loss and max financial at cost. portfolio as of now is chemical/pharma heavy. I am also invested in gold from lower levels and the ride their has been pretty rewarding. i would suggest one to watch video on IIC on gold.
  8. Will be getting decent amount of capital in next few months which will make cash around 40% of my portfolio. planning to few financials/consumer names (basically adding non pharma/chemical name to balance the portfolio.
    portfolio is as follows:-
    Aarti industries
    Alembic pharma
    Bharat Rasayan
    Lux industries
    Apl Apollo tubes
    GCPL
    BRITANNIA
    Neuland
    shilpa
    shilpa and neuland are technofunda plays till the time i read more about them. Incidentally bothhave been covered on this forum. bought inox at 200 and exited at 300 as things on ground were getting worse.
    Have been looking for a good real estate player as their has been enough cleaning visible in the sector along with demand being stable. might buy a asset to play this one.
    regards
    divyansh
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Nice observations, your point about financials is bang on. One more thing which might be useful for all of us to keep in mind, almost all Indian chemical companies have expanded or have announced that they will expand capacity. Capital cycle can easily play out here if demand forecasts are incorrect. Plus its the flavor of this season (so bullishness is already in price). There will be differentiation at some point between the specialty companies having some kind of competititve advantage and normal chemical players. Even then, price seems to be expecting an optimistic future. Its good to be careful and not go overboard with allocations. Good luck!

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I see that rightly you have a cautious stance on lenders, what are your thoughts on insurance - life, insurance - general and AMCs? Thanks

How has your investment ideas and approach changed after the book " capital returns ". What are the other sources specially in the Indian context where in one can read or relate to such cycles playing out. Any examples which you are currently tracking. I want to validate and learn the nuances of investing keeping capital cycle in mind.
Regards
Divyansh

I haven’t read the book, capital cycle is simply common sense (demand and supply). I have personally benefitted a lot from listening to Kenneth Andrade interviews. One book which I found somewhat useful in Indian context was Masterclass with Super-Investors.

I have personally learnt a lot about cycles by simply reading balance sheet of companies. When the gross block of a number of companies increase in a commodity sector, its probably a bad time to enter that sector. Because everyone is expanding capacity as they are bullish about demand, and demand is the hardest thing to forecast.

For learning more about the behavior aspect, read the sugar cycle thread at valuepickr. That is the perfect illustration of human psychology during sectoral booms. There are also a few nice videos by Jiten Parmar on youtube that helps understanding cyclicals. Another good resource is the Research Gurukul videos (link)

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@harsh.beria93, @dj123 - Just a question on the gross block which have mentioned, I have been following the commodity sector - steel, aluminium since Q4 FY20 and have been hearing the commentary of the management, the sense is it looks to be getting better.

From the gross block of one of the company, it has been increasing, how should one see this, in one hand the commentary is sounding positive of a commodity sector and the other hand gross block as increased Y-o-Y, how should a rookie investor like me decipher this.

Any thoughts would be helpful

Steel, aluminum prices are decided internationally. For that, looking at Indian gross block numbers wont help as China is the largest player. I simply look at LME prices for aluminum, there is some good research by @princevegeta on the NALCO thread that might help you better understand global aluminum cycle.

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thanks @harsh.beria93, I do look at the LME prices for Steel and Aluminium, thanks for your inputs, much appreciated

i am not an pro but what I observed and found that during lean period of the cycle i.e when the demand is more and supply is also more and pressing the price of the commodity to the corner most of the sound companies prefer to increase the capacity instead of focusing more on supply as the supply is already more but when the CAPEX is done during the lean time it will give advantage when the supply is reducing and reap the benefit in terms of low cost producer of that commodity . Most big companies have forward or backward contract of the commodities and sometimes they use hedging . But the forwarding contracts are no more longer than 6 to 9 months .

This reduce the inventory cost but this may be double edged for the supplier as well for the procuring company . so they come up with separate clause of passing the advantage in case of reduction of prices or escalation clause . It strengthen the relations between the supplier and procuring company it is win- win for both . But this practice is very limited .

I had seen this in sugar companies , pharma , metal or cement companies . the build the capacities when the prices are at al time low .
Regards

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