Manappuram: Gold loan play. The question was: Muthoot vs Manappuram
Couple of things I noticed at Muthoot were: Promoters taking very high salary, four heads (all brothers) taking Rs. 8.8 crores each (AR-17) and the board seems to be almost comprised of promoters and related people. Manappuram was much smaller in terms of Market Cap back then. Recently as it has also diversified into home loans and SME, leveraging their brand I believe it has potential to grow.
Satin Creditcare: Bought it very recently as it felt the stock was a value. Ignoring DEMON’s affects, Satin makes sales of approx 1000 crores, and considering Net profit margin ~12% brings 120cr. With market cap around 1200 crore and having institutional buying at much higher levels, I felt comfortable buying it here.
DHFL: Increasing brand visibility, seemed really cheap at ~1.3 PB and having consistent sales and profit growth. Missed CanFIn and Gruh (didn’t know of VP back then). However, reading VP posts have increased my conviction in DHFL further. I would hope those Corp. Governance issues get resolved.
Capital First: A consumer-durables focussed NBFC which I hope treads the same path as BajajFinance. Mr. Vaidyanathan is an accomplished man and I’m wiling to stay put. Their ROE seems low currently due to write-offs, so will increase holdings upon improvements.
Britannia, Bajaj Finance, Kotak, Yes: The dominant share of my portfolio. the Tried and the tested steady compounders. Strong brand equity and consumer-facing companies. Was also holding Axis Bank, but exited last year when NPAs surged.
IDFC Bank and Ujjivan: These two seem yet play out, will look to steadily build allocation upon improving businesses.
Gujarat Automotive Gears: Good ratios and a strong balance sheet. Not sure of steady profit growth but the stock has given decent returns so far. D/E ratio has increased (purchased land) and I will look for management commentary on that. Maruti, Hero, BajajAuto seemed too big to grow multifold from here.
Piramal: Because of less impact of FDA as they have many OTC product contribution and their NBFC business is gaining strong momentum. And yes, promoters like Ajay Piramal give a sense of comfort.
I tend to avoid the current market fads as they undoubtedly would be very expensive already. Currently it seems those are defence, infra and chemical. I avoided cement and industrial goods in 2014 (not sure if that has been a good thing) due to their very expensive nature based on Modi Govt's focus on infra spending. Though the earnings and sales don't seem to have improved dramatically, stocks have run up a lot to question my investing logic.
I have done a few value buys (strong FCF, low earning multiples) but haven’t got any meaningful returns in such stocks, they seem to be stuck in a range. May be I would have had to wait longer, its just been 4 years!