My portfolio - Review


(deep86) #1

Hi all,

Please find below my portfolio - Request your feedback.

  1. Prakash Industries (12%) : Steel upcycle, cheap valuation, demerger of plastic division to provide further re rating.
    Risks : Promoter quality
  2. KEC international (10%) :Strong execution and order book. Extensive experience in project exectuion
    Risk: Cash flow, current valuation may be a bit high if perceived revenue don’t materialize.
  3. Deepak Nitrite (10%): Should be a good import substitution story if new plant works out properly.
    Risk : High debt level, any hold up on the new plant.
  4. Welspun Enterprise (10%) : Cash rich , should benefit from the upcoming bharatmala project.
  5. IRB infra (8%): Again may benefit from Bharat mala. Cheap valuation. Survived 2008 crash so should be resilient going forward as well.
    Risk for both is political as well as execution.
  6. DCB bank (15%): Very good conservative management. No serious NPA so far, fairly valued but it can be big in next few years. Has laid out a proper plan for next few years and company is working towards it.
    Risk : though company has not negatively suprised but not able to grow per plan may be a risk.
  7. HEG+ GE (20%) : Current theme of shortage in GE looks next few year story atleast and numbers are also backed up.
    Risk : needle coke prices are a reverse in steel cycle.
  8. FEL (7%) : Debt == Investment/assets. So it may be a special situation play which may work out positively if mgmt walks the talk.
    Risk: Management execution.
  9. Rest small tracking Talbros, BLS, Allcargo, SIB, IDFC.

Looking forward to feedback and suggestions.

Deep


(Bheeshma Sanghani) #2

While i dont have any of the names that you have - your portfolio is very cyclical. While this may be intentional on your part but i have found that having a few steady stable compounders helps. This maybe my discomfort with cyclicals speaking but it does require constant tracking, vigilance and knowledge about timing which is not everyones cup of tea and is certainly not where i lean.

Best
Bheeshma


(deep86) #3

Thanks for the suggestion and feedback.

Overall my understanding is that Infra would be the focus of the govt with election next year - as this would would be a quick fix to multiple issues prevailing in the economy and generate growth. Though, in current environment Not sure if banks would be willing to provide loan for financial closure. That’s a big risk with Infra plays.

Other Cyclical - Steel and Graphite electrodes, I am planning to hold from a short to mid term and if cyclical theory does not work out, perhaps will have to book small loss.

Rest are special situation.

I was not able to find stock at decent valuation outside above universe.I do not mind changing my stock mix to a better/ secular stock if business prospect looks bright.

Even I want to invest in secular growing stocks, easier to understand and monitor. Would be great if you can suggest some names. Would start my research and consider moving the folio towards them depending on relative performance.


(sumit680) #4

KEC looks good on the basis of its cash flow and reduced debt. I have just started my research on KEC international. With few months of experince into the market, currently my focus is on good free cash flow and good management. I am betting upon J K Paper, Indigo and Vardhman textile on this basis.
I will certainly share my observation with you with respect to KEC international.

Regards