Hitesh portfolio


(SSK) #2893

Dear sir,

What is your opinion on NGL fine chem and Hikal after the recent correction in prices. I have read about both companies for the past few months, is it a good approach to buy both as a basket or choose one between them.

May i also request you to share a few good names an individual should be evaluating for a investment horizon of 2-3 years in the current correction in mid/small caps.

I am hoping to rejig my portfolio by getting rid of some bad choices made earlier.
Thank you.


(Milind) #2894

Hi Hitesh,
Just a quick question, do you buy stocks in consolidation phase or do you wait for breakout first? Do you look in to stock which in consolidation phase for year and such stock makes new high?
Do you follow different strategy for different strategy for different consolidation period like…3 months …6 months…or say 3 yrs consolidation period…

Thansk for your guidance
Regards
Milind


(Hitesh Patel) #2895

@SSK, Both HIkal and NGL Fine chem are well run companies with similar situations in terms of future growth. Both companies have done/are doing big capex and likely to grow quite well over the next few years.

Hikal business mainly consists of pharma and agrochem sectors where they partner with innovators and supply the intermediates and APIs to their clients. Business model is built on years of trust with their customers which gives them some competitive edge as these relationships cant be built overnight by competitors.

NGL Fine chem is mainly into Animal APIs and has done capex after a long time. The recent quarterly results have been lacklustre because of a variety of reasons and hence stock price has corrected.

You can study both companies as resources on both of them are available on VP also.


(Hitesh Patel) #2896

@malthankar,

If I buy stocks based purely on fundamentals, i.e when all the things I need in my investment thesis fall in place then I dont give too much importance to technicals unless I get some very clear cut picture of a potential up or downmove.

In technofunda picks I look at the technical picture and prefer to look out for breaouts of some kind and subsequent consolidation/mild correction to take a position. In breakouts I look out for either 52 week or multiyear breakouts or some pattern breakouts like flag pattern, cup and handle, rounding bottom etc. These supported by good fundamentals makes things easy.


(Hitesh Patel) #2897

Some companies I invested in recently

Equitas:

The company is undergoing a transformation in its business model after the fiasco in MFI segment induced by demonetisation. As of March 2018, the MFI part occupies a small part of overall business of the company. I expect the company to return to strong growth trajectory in the newly launched product segments. Their borrowing profile shows an interesting change. Retail deposits, savings account etc now make up close to 30% of total borrowing and this figure is likely to increase going forward according to management in concall. This should help in reduction of cost of borrowing and have a big positive impact on profitability going forward. Plus as AUM increases, cost to income ratio also would go down. And write offs in MFI book had been largely been finished by Dec 2017 quarter. March quarter results could indicate things to come going forward.

MAS Financial Services.

Recently listed but in business of lending since 20 plus years. Developed by first generation entrepreneurs Kamlesh Gandhi and Mukesh Gandhi, company has grown its AUM at a rate of 40% plus cagr and has undergone dilution only 3 times till date which includes the recent IPO. Good asset quality. It has a differentiated business model which supports growth with minimal dilution. Anyone interested in researching this company has enough resources in the 2018 Annual report and company presentaion and concalls.

MAGMA Fincorp

Again a business undergoing transformation under a new management. They have included a top guy from Chola and a whole team is put in place to drive the company forward on the growth path. Last few quarters have been devoted to cleaning of books and now onwards company targets to increase its AUM now that its balance sheet has shown signs of improvement.

These are not recommendations and everyone is urged to do their own due diligence before investing. I am not a qualified advisor.


(paresh.sarjani1) #2898

@hitesh2710
Hello Sir , good to see your new investment in micro finance …
My question is … Why Satin Credit is not into your watchlist… Considering HFC added , doesn’t it provide better chances of getting good returns going forward?


(Rohit) #2899

Hi Hitesh , Did you analyzed Ujjivan financial also. If yes , what made you choose Equitas or other companies from Micro finance over Ujjivan financial. Would like to know your views on the same.

Thanks


(kartiks) #2900

@hitesh2710
Dr Hiteshbhai,
Jai shri krishna.
Can you help to get feedback on the Quality and popularity of these trade-names.
These are Eris’s top brands and major contribution to EBIDTA
Are these brands expected to remain evergreen . . .
Their new revenue may be expected from the acquisition http://uthhealthcare.com/ and Nutrition range.
Regards.


(kartiks) #2901

@hitesh2710
Attachment missed in thtop-brands.xlsx (9.3 KB)
e previous post.


(Invest) #2902

All recent buys from NBFC sector. Why is that, Hitesh bhai?

No other sector looks attractive to you?


(Sachin) #2903

@hitesh2710 What is your latest portfolio looks like ? If you can tell a brief liner about the rational behind its selection & future growth prospect that will be great.

Thanks !!


(Rits) #2904

Hitesh Bhai,

Thanks for portfolio update… Just a small query … are you still holding SKM Egg…

Regards


(Hitesh Patel) #2905

@Rohitsharma, @paresh.sarjani1

About Equitas vs Ujjivan, I tried comparing the two but preferred equitas as the percentage of MFI loans out of total lending is close to 28% as on March 2018. For Ujjivan that figure is much higher. I didnt want too much exposure to a company with predominantly MFI lending and hence opted for equitas.

Converting to small finance bank would improve the borrowing profile of both companies with CASA and retail term deposits likely to be a major driver of reduction in cost of borrowings. Against that the new branch rollouts would entail higher cost to income ratio. Once the newly opened branches start gaining traction and generating more business per branch, the cost to income ratio should moderate going forward.

With public sector banks reluctant to lend and private sector banks not too interested in small ticket lending I think if these SFBs get their act right then these can be an interesting space to be in.

I have never tracked Satin so not much idea about its financials or promoters etc. Main comparision was between Equitas vs Ujjivan. I think a combination of the two could also have been considered but the lower proportion of MFI segment in Equitas tilted the balance in its favour.

@Invest, About all the picks from the NBFC sector there’s nothing intentional. There are other sectors under watchlist but not yet zeroed in on any company.

@Rits I exited SKM recently because having given enough time I could not see the results I expected from the company. While topline growth was good bottomline remained subdued. Plus I felt I was getting better opportunities elsewhere.

@kartiks, I dont have much idea about eris life or its products. But a look at the link u mentioned seems to indicate products which are frequently prescribed by doctors. A lot would depend on how the company markets its products.


(ukdube) #2906

Dear Hiresh Sir, Are you tracking Sterlite Tech??


(butun) #2907

@hitesh2710, Any views on recent development in KRBL and specific views on frequent corporate governance issue that retail investors are exposed in India. Any pointers to mitigate this risk. Thanks


(ThinkLong) #2908

Personally, i have been holding Equitas since it’s listing and despite the poor performance of stock the most disappointing factor is its recent foray in to secured(?) lending space, which only led to higher GNPA which was sort of diworsification that they did I feel. Having said that the same mgmt have also raised 3500 Cr. of deposits by converting most of their branches in to SFB’s with 35% CASA in just a year of its operation is quite commendable which keeps me holding the stock during this entire roller-coaster episode going on for years :slight_smile:


(Binu) #2909

Hello Hiteshji, thanks for the ideas, shall take a closer look and try to read up on these companies.

What is your opinion on JM Financials? The stock has been corrected quite severely during the recent midcap correction. I couldn’t find anything fundamentally going wrong with the company, if not anything the price has become favorable to average down. Do you still hold it?

Thanks again,

Binu


(Rohit) #2910

Thank you Hitesh. I am holding both Equitas and Ujjivan (with Ujjivan having higher weightage). Your analysis certainly helps. Thanks for sharing your knowledge.


(tbhavesh) #2911

Hitesh bhai - post the recent fall in Avanti Feeds, what is your view on this stock? Is it good to hold or a partial exit is advisable now / in near future.


(Hitesh Patel) #2912

@tbhavesh,

Avanti has had a big fall from around 970 levels to current 483 levels which is close to 50% from its top. This kind of a fall in a company which has been loved a lot and closely followed will attract a lot of guys to buy at every fall.

What one has to understand is that routine corrections of the magnitude of 20-25% from top are a norm and should be considered as a buying opportunity if business momentum is intact.

When a stock has had a run up like avanti had from 160 to 960 within one year then it corrects, besides price correction it will also undergo time correction. So there should not be too much haste in buying. Let the stock price settle in a range and watch the company’s fundamentals for some time before taking a call. Just for example sake u can see what situation was there in pharma stocks like lupin, sun pharma etc. Those who were patient in buying suffered a lot less. Thats not to say Avanti can fall that much but its better to be cautious in buying. Another way could be staggered buying spanning a few months.