Hitesh portfolio


(DHUPER) #3338

Apologies. I wanted to ask “Are you of the view that Indian markets behave differently than what is mentioned in these books”.


(Hitesh Patel) #3339

@DHUPER

Markets are not obliged to follow a path outlined in these or any other books. Its practically very difficult to predict the market path atleast for the short to medium term.

What these books would provide is a way to find out good companies and a way to figure out a reasonably good level to buy these companies.

I have always found Peter Lynch’s teachings in his book to be easily applicable to Indian markets.


(Hitesh Patel) #3340

@whipsaw

My views on NBFCs have not changed much. I still think its difficult to imagine most of them giving above average returns. There would be the odd counter trend rally or some of these companies can remain range bound for a long time.

Ideal thing would be to focus on individual names in the NBFC sector and try to figure out how these would gain with a lot of smaller fly by night operators leaving the field. Dominant names in sector niches would make for good investments. Good thing is there would be plenty of time to accumulate these good companies over next few weeks and months.


(sandeep kochar) #3341

hello sir,
your view on Shaily Engineering plastics…they are niche plastic moulding company having ambitious target of doubling their revenue in coming 2-3 years. They are entering into carbon steel furniture business and seting up a plant for the same.
As far as i think CS furniture biz is not a niche segment and currently many unorganised players are into it. Shaily which known for their skillset in innovative plastic componentrs biz entering into ordinary CS biz may dent their profit margins.

How do you see this going forward …?


(skg) #3342

Hello Sir,
I have some tracking quantity of Coal India and want to know your views on it. I feel coal demand will be there in India for sometime as we dont have any other scalable alternative of power generation. Also it is the only company producing coal. But Coal India being a government company and it is not able to meet demand is a concern. So wanted to know your opinion.

Thanks in advance


(Hitesh Patel) #3343

@sanu1802

I dont track Shaily very closely currentlly but the overall impression I got when I visited their plant and meeting the management was very favourable.

I guess (its only a guess) if they have invested in CS plant then they wont do so without considering all aspects of the business. They are a B to B player and hence would put up plants only if they see consistent demand coming up. And the products they manufacture are top class and would be much better than peers in terms of finishing, durability and quality. I think they might have had commitment from a big customer for regular offtake of the product before putting up any kind of capex.


(Hitesh Patel) #3344

@kumars1672

I dont track Coal India as understanding the business is a difficult job as there are a lot of moving parts in the business and there is also an element of cyclicality to it.


(sandeep kochar) #3345

Yes sir , they are putting this plant for IKEA. As IKEA is planning to expand in India so I think demand for CS furniture will be there for Shaily. But I am more concern about CS biz…as far as i think it’s not a niche segment as compare to their existing industrial plastic segment…
But IKEA as a client, we can expect high quality product in CS …let’s see how things move going ahead…


(SOHAN) #3346

Hello hitesh bhai are you tracking ceramic companies basmati rice exporters and piber cement bord companies?


(Sarabjeet Singh) #3347

Hi Hitesh Sir,

Do you track Infra Companies which are into road construction. I like companies dealing majorly in HAM projects. As per my understanding following are pros and cons

Pros:

  • Strong order book
  • Good execution by top companies in the sector
  • India needs a lot of roads due to huge growth in traffic and that gives gud business visibility for next several years

Cons:

  • NHAI slowdown in project auctions in last two quarters
  • Election year and no surety if next govt (if no BJP) will continue their focus on infra
  • Liquidity crunch due to recent ILFS havoc in NBFC market

Pls let us know your views on this sector in general and few companies that you may be tracking.


#3348

Sir, i saw many brokers suggesting Indian Hotels, what is your kind views on this?


(riddhi) #3349

@hitesh2710 Sir,
I am a newbie investor trying to get my hands dirty in the indian capital markets after reading few books on stock market and following various post in Valuepickr. In one such post I happen to read the book of Pat Dorsey, to get hold of the science part of the stock selection. After reading the book, I selected eClerx, Bajaj Auto and Page Industries. My selection rationale is as follows-
Though a technology company eClerx moat seems to me as a classic text book one, in multiple historical parameters like NPM, ROIC, ROE, financial leverage and free cash flow generation. Its valuation is also attractive with high margin of safety.
Bajaj Auto is another one where the parameters are attractive and i feel that its present valuation is just about right to enter the stock.
Page is the only stock which seems to test my nerves as it is expensive in terms of the conventional parameters like PE, PB, PS, cash return ratio, etc. but its free cash flow generation stands out. It offers high margin of safety if we consider the business as a whole. Typical time horizon that I am considering is between 5-10 years as I believe, market takes time to reward companies with high free cash flow generation.
Your view point in my above selection and possible loopholes will not only help me become a better investor but also make my day! Thanks in advance.


(django) #3350

Dear @hitesh2710 Sir,

Have you ever looked at any of the following companies?
If yes, I would love to know your views on the same:

  1. Ultramarine & Pigments (decent business with decent ratios)
  2. Orient Refractories (good business with good ratios)
  3. Dynavision (assured rental situation)
  4. Facor Alloys (Turnaround situation)
  5. BCL Industries
  6. Bodal Chemicals

Sincerely,
django


(saurabhshares) #3351

Hi Hitesh Sir,
I am avid reader of all your responses in this forum.
I noted you were following Deepak fertilizer once from technical point of view.
Are you still following deepak fertilzer. What are your views on it now.

Regards,
Saurabh


( s das) #3352

Bajaj auto is a good solid dividend player without growth. If they can buy ducarti it can Be a game changer .
Page expensive cash machine. Discloser I hold it for years.
Eclerx good company as I am not following can’t comment .
I will suggest to buy some solid players like hdfc bank kotak bank on Decline . I own both.


(Tauqeer) #3353

Hi @hitesh2710,

A financial organization projecting growing AUM at a CAGR of 15% will translate to how much earning growth ?

Thanks for your time …


(Hitesh Patel) #3354

@SOHAN

Ceramic tiles companies might see some light at the end of tunnel now that crude prices have collapsed. Power and fuel costs account for a big chunk of production costs for these companies. Its also reflected in strong upmove in Kajaria after the prolonged correction. I think these companies may not regain their lost market fancy but if bought at decent enough valuations can give good returns.

Not looking at basmati rice exporters or fiber board companies.


(Hitesh Patel) #3355

@riddhi

Moat is important only if the company is able to translate this moat into higher sales and profit figures. Eclerx has not been able to do that since past many quarters. Same thing applies to Bajaj Auto, although being cyclical it will have its demand spurts and lead to strong growth for some time after tepid periods.

Page has been consistent in showing growth though the quantum of growth keeps fluctuating. But since they keep entering newer product ranges rather than sitting on their dominant market of underclothing, they will continue to see periodic spurts of good growth in between routine periods of unexciting growth.

Free cash flow is a good parameter to look at in companies you analyse but if one were to list up parameters to evaluate, growth would rank among the topmost.

While screening companies it would be a good idea to first make a list of companies showing good growth and then go deep down by using the parameters you have enlisted like NPM, ROIC, ROE, leverage, free cash flow and others.

I would tend to look at companies with good consistent replacement demand and market dominant position . This list would include companies like Asian Paints, Pidilite, HDFC Bank, Page Inds, just to name a few companies. Next important step is to look closely at valuations at which these companies are available and what kind of valuations we are ready to pay for these cos.


(Hitesh Patel) #3356

@django

From the list of companies you have put up, I liked Orient refractories, and had looked at it some time back. It remains a dominant player in refractories business with an MNC promoter. It can be classified under the FMIG group, which includes companies involved in producing fast moving industrial goods. Replacement demand always remains good for these companies as they produce consummables and hence are not affected too much by the cycles of the underlying sector.

Rest of them I dont track.


(Hitesh Patel) #3357

@saurabhshares

Of late, Deepak fertiliser has had a nightmarish chart pattern. The stock price has fallen from a high of 500 to current levels of 142. And its almost a vertical fall. I dont track its fundamentals so no idea about why it has fallen so much, but if charts were to tell a story, it would be an ugly one.