I think the theme going forward will be Finance sector, the nucleus of the economy. Indian economy is expected to shrink by about 5-10% in FY21. Now, when the corona pandemic ends & the Indian economy is back on the track of revival & growth , finance companies like banks & NBFCs will have a key role in driving the revival of the Indian economy & enterprises. There will be an immense demand of credit to restart businesses & revive them… So, quality banks & NBFCs like HDFC , Bajaj Finance , Mannapuram Finance etc, which have competent management, sufficient reserves, efficient risk management , should be able to weather this corona storm and take part in the revival of the economy . They are poised to benefit largely from this revival. This pattern was also seen after 2008 recession.
But, having said that , there still will be pain in the short term , bcos of NPAs, uncertainty in the business outlook, hindrance in the expansion plans etc. My thesis is for long term , may be 5-7 years down the lane.
Again, these are my own opinions, do your own research before investing. Although, your views and suggestions are invited on this thesis…
Disclaimer : Bajaj Finance & Manappuram finance form 30% of my portfolio.
i think muthoot finance is much better placed than manapuram finance as promotors holding in muthoot fin is 75% and pure gold loan finance company where as manappraum low holding of promotor and micro finance other than gold finance
I disagree. Muthoot is a better franchise than Manappuram for sure. When gold prices rise, like in 2020, gold business would look attractive. But gold prices are cyclical. When the cycle turns, a well diversified business would do much better. Also, there are claims from banks like KVB that their gold loan portfolios are increasing massively and the latest threat from NBFCs like Bajaj finance who are venturing into gold loan territory aggressively given the benefit of asset quality. My take is therefore that Manappuram is better placed in the overall scheme of things than Muthoot. Muthoots expensive valuations are justified given the percentage of promoter holding and the fact that it is the market leader. But going forward, benefits of PE re-rating would be only marginal and if it does not diversify quickly enough, stock price may stay range bound when gold prices stagnate.
PS: views may be biased as I hold only Manappuram in my PF
Sir, knowing your experience(of 3 Decades in this domain), what are your views on the current scenario about this segment. All companies are showing growth and the results for the first quarter have been very encouraging.
Would be great if you can specifically mention your views on the 3 companies you were associated with - Bayer, PI and Sumitomo(have already read your views on the Sumitomo Thread), as all three are listed entities.
Also, any reason why your current holding from this segment is not a major amount in your portfolio?
Hi sir, since you’re involved in the agrochemicals business, I was wondering whether you might have some thoughts on astec lifesciences, either from the prism of your professional opinion/knowledge or from the prism of an investor.
Astec - I have never heard , none of my distributors friends across states also don’t know .May be they are in B2B business - selling techicals material and formulation material to others.But i don’t think they supply material to retail or farmers.
As per my experience and understanding :I would rate Bayer as number 1 - because of deep research and as an industry leader world wide. They decide the direction of agriculture research and development . Now with Monsanto being part of Bayer , no one can beat them . And their portfolio is balanced - seed, agro chemicals.
PI -I would rate number 2 . But not for their agriculture business but for their CRAM part of businees. They have developed very strong relationships with MNCs globally. And that is their deep moat.
Sumitomo - I have already given the reasons why i exited this share (please check above ) - I think their story is over now . Even if they get some growth , that is already discounted in the price.
Loved going through your PF thread today - great timing to get into metals and auto ancs.
Any advice for sectoral allocation or something you have changed after the recent upmove(s)?
I personally shifted and still shifting to value plays along the real estate and PV/ CV upcycles- Piramal, GNA axles, TataMotors, Ashok Leland, kolte Patil,
AB Capital, PNB housing are few examples along with Gail, Gujarat Gas, LT finance and GSPL
Top 10 Most Valuable Indian Brands 2021 which are value adding to the economy.
I think, these well known brands could form a part of portfolio 2025.
A very intersting read i came across! Not sure if this is the right thread. If inappropriate you may please delete it
Only holding the following as of now for 2025 - 1. Patanjali 2.Vedanta 3. Godrej Properties 4. Green Panel 6.Sun Pharma 7. Sonata Software
80% in cash — sold the originally purchased shares in the above companies also. Holding only equivalent to the profit made in the stocks . In that way, not a single penny of my original investment is in the market.
Reason; Global economy is in crisis just like in 2008.Don’t feel good at this level , all global markets are falling , we can not remain untouched.
Would love to know your thesis on Patanjali Foods… Is it coz of the product transfer of ~690cr to the listed entity or something else? coz in the short run, after 6 months the palm oil issue will again arise if the govt dosen’t interfere.
