Hitesh portfolio


#3616

Dear Hitesh, Just in case NDA doesn’t win and hung parliament comes into force, the most obvious guess on the market is for it to fall down. In such a scenario, where could the bottom be for Nifty index?


(Hitesh Patel) #3617

@newone

I dont know what the outcome of election is going to be. As you say NDA doesnt win then there could be some volatility but over the longer term elections could be an insignificant event.

As for where the bottom could be I wish I knew. :grinning: And if I knew that one I would go one step further and try to know the outcome of elections.:grinning:

Having said that I think the focus at all times has to be on the companies we track and own rather than worry too much about where markets are headed. I only go slow in buying when I feel markets are in a downward spiral. Usually post a decent correction markets tend to give sufficient time and signs to pick up stocks. And even if that is not so it would be prudent to buy in a staggered manner during sharp market corrections.


(Divyanshu Taneja) #3619

@hitesh2710 sir i need to confirm from you that Does jk paper has formed cup and handle pattern on daily chart
Thank you sir


(SOHAN) #3620

Hello hitesh bhai .your views on companies which have 1.quoted value of investment 5x more than its current market cap and 2.cash on balancesheet exceeding market cap which are dividend paying and low price to book stocks.


(amil) #3623

Hi Hitesh Sir,
Do u track or invest in Indigrid? Would like to know your views as to what picture are we missing when we consider 12rs DPU on market price of Rs 81 ? I remember yields looked attractive at 88-89 during liquidity crisis and now the price is 81 (so even more attractive yield).

Of the two, IRB Invit and Indigrid, my opinion is that Indigrid is better yield vehicle in terms of underlying business (transmission assets, reasonably certain cashflow etc).

If we are buying Indigrid as a yield asset (almost 14.% pretax now), what is the risk that I might be missing here? As it goes, if something is too good to be true, it is indeed too good to be true.

Grateful if you can share your thoughts


(A shah) #3624

@hitesh2710 Hi Hitesh bhai,
GMM Pfaudler is seeing improvements in ROCE is it due to uptick in cycle as earlier roce was sub 20, but does such ROCE stay above only till the cycle or is it sustainable like other companies ?
Many thanks


(Hitesh Patel) #3625

@amilshah264

I havent invested in Indigrid Invit but was excited by the yield it offered. And as you say as the price goes down the yield becomes even more attractive.

It is a perpetual (I think 35 year) instrument. Terminal value would be zero. And hence as the years go by the value of the instruments continue to go down.

The money saved in terms of interest payments by issuing the instrument is passed on to Invit holders. I think as of now they pay Rs 12 per unit over an year.

Only problem is that as the company keeps paying out consistent Rs 3 per unit every quarter the price quote also keeps going down. The conundrum for me is how low the price quote on bourses can go. Is there something we dont know about the instrument? for me the kind of price erosion the Invit has seen post listing is surprising.

As of now I feel I dont understand the instrument fully and hence am avoiding. it.


Indigrid InvIT: High yield on stable and predictable revenues
(Hitesh Patel) #3626

@Divyanshu_Taneja

I cannot find any cup and handle or other specific pattern on jk paper.


(Hitesh Patel) #3627

@SOHAN

I dont know about any companies having quoted value of investment of 5x more than its current market cap or cash on books exceeding market cap.

The first situation of value of investment being 5x could probably be seen in some holding companies but this 5x holding doesnt have any meaning unless there are any chances of it being monetised.

If you have any specific companies in mind you can name them and these can be discussed.


(Hitesh Patel) #3628

@A_shah

GMM Pfaudler and its business has been discussed very well in the respective thread on the company and @anantjain87 has put up all the details that matter on the thread. I feel I have nothing more to add.


(A shah) #3629

Thank you so much Hiteshbhai. Will refer the thread


(A shah) #3630

@hitesh2710 Hi Hitesh bhai,
1 Whats your view on Accelya Kale ? Does it have strong moat ? Does its revenue have growth potential ?
2 Motherson Sumi keeps on giving bonuses instead of issuing dividends . What could be the reason Hiteshbhai and is it not a good practice either to reinvest or pay dividend if reinvestment oppurtunities are not available? There has quite a few bonuses issued . Does it mean lack of cash to pay dividend ? How does this benefit shareholders ? Whats ylur view on motherson sumi ?
Many thanks


(SOHAN) #3631

Thank you hitesh bhai for your kind reply.i was tracking some holding companies rajapalam mills mcap = 615 cr and quoted value of investment= 2620 cr.and palash securities mcap =43 cr and quoted value of investment=298 cr. joinder capital mcap =25 cr and cash at bank=47 cr


(Ghanshyam Dhoot) #3632

@hitesh2710
It looks like sanghvi movers is making a cup and handle.
Please have a look into it as I have just started reading about technicals.
Thank you so much!!!


(Hitesh Patel) #3633

@A_shah

Accelya Kale is a company involved in software to airlines space. Its a subsidiary of Accelya group which is strong in the segment and is one of the global leaders. The business it is in is a sticky business and hence customers prefer to keep the same vendor. While this could be considered a moat it also prevents the company from acquiring new clients because the new clients also would not like to part ways with their existing vendors. For a customer to change the software vendor, the product of the new guy has to be markedly superior or the existing product has to have a lot of problems.

Accelya has to be looked at as a cash flow based investment where the company gets good cash flows and after a point the downside gets protected. At present it provides decent dividend yield and I feel downside may be limited. But upsides can come about only once market is convinced about growth potential of the company.

In past few quarters there was some rumour/talk of the company getting higher business because of takeover of accelya kale’s competitor Mercator by its parent Accelya. The logic was that some part of Mercator biz would be moved to Accelya Kale because of higher synergies with the latter. How far that has played out needs to be seen.

Regarding motherson sumi, I dont track it or its many subsidiaries :grinning: so no idea about it.


(Jinal) #3634

Hitesh sir are you tracking Frontier springs and Everest organic

both are at 52 weeks high

Thanks,
Jinal


(Hitesh Patel) #3635

@Jinal

I tracked and prepared a short note on frontier springs also for myself. But due to poor liquidity when stock price was around 160-170 I couldnt buy into the company. Now I see it has run up significantly. I think it should have a good few years going down the line. For me its a story of ifs and buts between lips and cups.:grinning: The learning for me is to pull the trigger even if it is for a small allocation. I have a concentrated portfolio and hence unless I am not too confident about buying atleast 5% due to lack of conviction or lack of liquidity, I find it difficult to pull the trigger.

No idea about everest organics.


(bullrun1988) #3636

Hello hitesh sir :blush: are you tracking Sankhya Infotech and Ducon Infra as business looks good but not sure about the integrity of management.


(Jinal) #3637

Thank you sir for your response. I also feel liquidity is low but the counter is very hot at the moment after getting order for manufacturing of springs for Link-Hofmann Busch(LHB).

Will you be able to share your notes on the forum

Thanks


(skg) #3638

@hitesh2710 Sir What are your views on Multibase India? I found that there is a thread for multibase India. But I didn’t find much information on the company in the thread or in the annual report. e.g. who are company clients and where its product are being used. Considering it is MNC and belongs to big group(Dow Corning Corporation), it enjoy many of parent company patented products. But I am not sure why market cap is still small(500+cr).