Hitesh portfolio


(arun10dec) #3487

@hitesh2710 please share your current portfolio and major churns, if any, you made in portfolio…
Anything you bought in this carnage??
How ur portfolio performed in 2018, because many have seen 30% to 60% erosion in portfolio from highs of 2017…


(1.5cr) #3488

Hi Hiteshji,

I would like your views on the following scrips if any.

  1. Abbott India - Horizon of 5 years plus as a compounder?

  2. ITC - As a long term compounder

  3. APL Apollo Tubes - A play on capex revival. Good management and a brand in the making it seems like.

  4. CCL Products - A moat can be seen. After recent correction, valuations look alright. Capex coming in as well.

  5. AIA Engineering - Entry into mining. High volume growth guidance by mgmt. FMIG sort of a non-cyclical in a cyclical space?

Thank you for your time!


(Hitesh Patel) #3489

@am648

I agree about the observations put up by you. Things are not as cheap as they were in 2013. Back then it was a plethora of no brainer opportunities. Currently things are not as easy as it was back then.

Coming to companies with good ROE available cheap, I think the thing to do would be to figure out which companies are going to improve their ROEs as they keep growing and thats where serious money can be made. All those companies with consistent good ROEs and decent growth would obviously remain expensive and at best be compounders.

I dont strictly adhere to the PE valuation while looking at companies. I have been looking at some companies like Shoppers Stop and United Spirits. In both the cases there have been changes in financials which the management have been harping about since a long time in their concalls. Now the results are just about coming through but there are some temporary clouds on the horizon. I havent yet bought these companies but in both cases improving margins with even a modest growth rate can be an interesting thing to watch out for. I remember Dhwanil had a theory about something similar in Jubilant Foodworks and it played out quite well. I am on the lookout for something similar playing out here. But as said before its only in watchlist.


(Hitesh Patel) #3490

@arpitjain512

CCL is discussed in details in the respective thread. It has been relatively resilient in this carnage in the small and midcap space.

Business wise the management looks like doing all the right things but I dont see them growing faser than 15 % or at most 20%.


(Hitesh Patel) #3491

@nav_1996

I havent had M&M in my portfolio. It has had a big correction of late but I dont follow it too closely.


(Hitesh Patel) #3492

@1.5cr

Abbott and ITC can be long term compounders. But things like HDFC Bank could be a better choice especially in case of price correction affecting these large caps.

APL Apollo is a company I have followed since few months but results have been disappointing so far. There have been transient reasons for the same and once these near term concerns pass away it looks like an interesting company atleast based on past track record.

CCL discussed before.

AIA is a very niche company dominant in its sector of operations. And it could be one of the best plays in the FMIG space.


(Pragnesh) #3493

Hiteshbhai
What is your opinion of Jenburkt pharma?
As a medico,i think it has good branded generic products.
Last 3 years growth is also good.
But i can not understand why it has very low asset.They have not expanded since very long tine.
With fixed asset of just 11 cr,it has profit of18 cr.
Am i missing any thing ?


(Hitesh Patel) #3494

@Pragnesh

Jenburkt growth has been tepid. Its hardly grown consistently above 15-20% cagr. What has happened in last 3 years is margins have improved consistently since March 2016 and hence profits have grown at a higher rate than sales. Plus there was some excitement in the small and midcap space prior to Jan 2018 and probably price overshot into the frothy range.

Now it seems its back to its deserved valuations. If the company can manage to show strong growth atleast 20% cagr or more in topline with commensurate profit growth then further re rating can be seen.

Asset base could be low probably because a large part of manufacturing is outsourced. (dont know the details)

Products of the company are good but in the domestic prescription market its a very fragmented and tough market. For a company to grow fast it would take a lot of smarts on the part of the management. I dont track valuations too closely so not much precise idea on that front.


(Bhaskar Bora) #3495

What is your view on potential of ICICI Bank after Chanda Kochar removed?


(mahesh1980) #3496

@hitesh2710 sir, can you please give your views on Bosch from a five year perspective?


(SMondal15) #3497

@Hitesh2710, sir What is your view on Insurance space specially like HDFC Life, SBI Life and ICICI Pru Life in light of greater share of Protection business and completely different distribution channel like bank, increasing Digital sales ,direct sale than agent dependent LIC.

Also your view on General Insurance space specially on ICICI Lombard , tailwind on retail health insurance and lumpy 3 year & 5 year upfront premium collection for 3 Year and 5 year mandatory Motor insurance package.


(dumboinvestor) #3498

I would like your view on Reliance Nippon.

At this price a 4% dividend yield, huge opportunity size, great business model, dividends alone will increase a profits and growth increase.

Even if we dont see any re-rating, dividends alone due to the business model and growth prospects will be great. Nippon will keep a check on governance and make sure that the ICDs dont go overboard and compromise the company. Over time Nippon can buy out ADAG. Even if they dont and perception does not change, dividends and opportunity size can drive returns to a large extent.

Do let us know your views!


(Hitesh Patel) #3499

@dumboinvestor

I dont know too much about Reliance Nippon. But NIppon keeping a check on ADAG group and then try and buy out ADAG group – this kind of thesis seems too far fetched to me. Just to consider an example, Tata Docomo suffered inspite of Tatas being at one end and Docomo at the other end.

Dividends, opportunity size etc dont mean a thing if promoter integrity is believed by markets to be questionable.

I would rather go with a similar business from the HDFC stable (if at all) if I want to ride the space.

Large opportunity size means something only if I remain invested for a long time and that can only happen if I have the comfort of a decent management at the helm.


(Hitesh Patel) #3500

@bhaskarbora67

Of late there has been a lot of recommendations on ICICI bank based on cheap valuations wrt HDFC Bank. Even axis is being talked about in the same vein.

With the exit of Chanda Kochar it seems a big load is lifted off the company. Atleast thats what a lot of brokerages and advisory services feel.

I personally think if I have to invest in a private bank I would still go for HDFC Bank maybe with staggered buying. As of now I am not invested in any banks. I have kept looking at HDFC Bank and dcb bank.


(Hitesh Patel) #3501

@SMondal15

I have yet to educate myself on the insurance sector. As of now I feel its too complex for me so not trying. But if we think of a lot of wealth created for Buffett, GEICO was one of the big successes for him. So for someone who understands the sector and how to value the companies therein, it could be an interesting sector.

@mahesh1980 I dont track Bosch too closely so not much idea about its 5 years prospects.


(A shah) #3502

Hi Hiteshbhai
Was checking out sundaram clayton as it holds stake in tvs motors , however whats the reason that its pe is 118 ? Dmart is overvalued but still has growth expectations which i couldnt find in Sundaram Clayton . Please let me know if i am missing something here . And the price too is showing a continuous fall . Even roce is not that great . Many thanks


(Sujay Ghosh) #3503

May be the site you were seeing has calculated P/E based on standalone earnings. It is 14.36 based on consolidated earnings.
https://www.screener.in/company/SUNCLAYLTD/consolidated/


(A shah) #3504

Thanks @sujay85. In that case is it correct to assume that if one buys sundaram clayton, one gets tvs motors holding at a lesser valuation. Please guide as i am a novice investor. Hows the business overall ? Many thanks


(Sujay Ghosh) #3505

I am in your league too. :slight_smile:
Haven’t studied this sector specifically. But the discount that you might be getting is holding discount which is less likely to go away. So it’s better to invest in the company judging its own operations and growth prospects, given that it is not a holding company overall.


(A shah) #3506

Thanks @sujay85. Am really perplexed as to why some holding companies get better valuations and some languish for long . Is it because of operating vs non operating? @hitesh2710 , Hitesh bhai, it would be great learning for us and request you to please give your view on the holding company query.
Hitesh bhai ,Also am i correct to assume that difference in valuation is because either the holding company is not anticipated to sell the investments in the near term or is it because many a times shareholders may not get the proper values out of such sale . In such a scenario how should one decide on investing in holding companies ? Many thanks