Ranvir's Portfolio


(ranvir dehal) #21

Sold my stake in ITC and bought GCPL last wek…that makes ITC-zero % and gcpl- 4%. Rest remains same


(ranvir dehal) #22

Sold my stake in IPCA labs in the price bump up today with modest gains 0f 8-9 percent. That makes IPCA holdings-zero.
Reason- near term trigger of probable USFDA clearance being granted to IPCA being priced in, in the last 2 days of up move ( I think so). Post this event…i do not see any substantial sales and profit recovery in the next 3-4 months. And even if it happens, the company looks richly valued.

Converted my IPCA holdings to DB Corp at CMP…as i think the q3 results for DB corp are expected to be good due to Navratras falling in q3 this year as opposed to q2 last year.

Also with the implementation of 7th pay comission, advt. revenues are expected to go up (although that may take some time, probably 6 months kind of time frame)

The whole transaction makes- IPCA-zero, DB corp- 6% of total portfolio.


(ranvir dehal) #23

Today sold my entire stake in JB Chemicals at Rs 270/share, after modest gains of 20%. Converted the holding in JB Chemicals to- TGBL and Rallis.
Reason-

  1. Both TGBL and Rallis had modest to bad last 4-6 qtrs due to one off events.
    Exceptional expenses in case of TGBL and droughts in Brazil and India in case of Rallis.

2.Both are quoting at historically low valuations.

3.Both should turn around in medium term.

4.TGBL has recently launched TATA GRAND…a filter coffee brand in India. Also its JV with Starbucks is progressing well with 80 stores across India and avg yearly sales of 2.4 cr per store which is 0.2 cr more than Dominos and more than double of CCD.

  1. Very promising seeds business of Rallis with more than 300cr yearly sales growing at 50% cagr…as of Mar 15.

  2. Both Rallis and TGBL are liberal dividend paymasters.

  3. TATA brand

  4. Wanted to make my portfolio as consumer facing as possible.

  5. In fact all the stocks that I own now are consumer facing. I find it easy to analyse consumer facing stocks as compared to B2B stocks…as you can do the scuttlebutt.

  6. Policy of betting on businesses facing short term head winds with other wise good track records and healthy financial positions has always yeilded good results for me. It however does take some time.

Regards,
Ranvir Dehal


(Hitesh Patel) #24

Ranvir,

What is the arrangement of Starbucks with Tata global? Does tata global hold any stake in the JV?

rgds
hitesh.


(ranvir dehal) #25

@ Hitesh…Yes…TGBL holds 50% stake in Tata Starbucks.Basically it is a 50:50 JV.
However it is not yet profitable…due to high initial start up costs of their stores and high rentals.
However if we do a back of the hand calculation…say avg store rentals at Rs 4 lakh/month= Rs 48 Lakh per year. Avg raw material cost at say 50 lakh/year ( considering GPM of 80% on food) and avg employee and other misc costs at Rs 5 lakh per month= Rs 60 Lakh per year.
That makes it a total cost of Rs 1.6 cr per store per year.
Against a sale of 2.5-2.6 cr year per store…Each store can give a profit of Rs 1cr/year.
If the business is scaled upto say 300 stores in next 3-4 yrs, the bottomline can be in the range of 300cr. TGBL’s share= Rs 150 cr.

That ways we have a equivalent of Jubilant Foodworks owned by TGBL…which is valued at 9000cr…more than whole of TGBL currently.
INTERESTING!!!


(ranvir dehal) #26

Attaching a demo Tata Starbucks food menu in India…

Pastry/Cakes:
Chocolate Raspberry Crunch Cake
Blueberry Delight Cake
Cherry Chocolate Cake
Red Velvet Orange Cake (contains egg)
Lemon Loaf Cake (contains egg)
Banana Chocolate Cake (contains egg)
Chocolate Brownie (contains egg)

Cookies:
Almond & Butterscotch Cookie
Oatmeal & Raisin Cookie (contains egg)
Java Chip Chocolate Cookie (contains egg)

Muffins:
Blueberry Muffin (contains egg)
Java Chip Chocolate Muffin (contains egg)

Sandwich/Panini/Savoury:
Basil Tomato & Mozzarella Cheese Sandwich
Mediterranean Focaccia with Roast Vegetables
Wild Mushroom Pocket
Tandoori Paneer Sandwich
Chatpata Paratha Wrap
Chilli Cheese Toast
Spinach & Corn Flat Bread
Greek Salad Wrap
Hummus & Pita Platter
Mexican Salad
Egg & Cheese on English Muffin (contains egg)
Murg Kathi Wrap
Grilled Chicken Salad Sandwich
Chicken Mozzarella Turnover
Double Meat Club Sandwich
Tossed Chicken Salad
Salmon & Cheese Stuffed Croissant
Pasta (with a choice of sauce):
Fusilli with Vegetables
Fusilli with Chicken & Mushroom
Looks interesting…should cater to Indian taste buds.


(Angad Singh) #27

Do you have a basis for the high level calculation? For instance none of the starbucks outlets look like they have a rental of only 4lacs/month.


(ranvir dehal) #28

@ angad…no…it was only a rough guess…actually I dont live in a metro…can u throw some light on the kind of rentals they would be paying…i would love to have a better idea of the same.


(Angad Singh) #29

Ranvir - I am not based in India so I cannot tell. But I have seen quite a few of their outlets in Mumbai and Delhi - all at prime places. Rentals are likely to be much higher than your estimate (but so could the revenues). Even generally, Tata global’s (consolidated) EPS has been the following:

2007: 7.5
2008: 24.9
2009: 11.3
2010: 6.3
2011: 4.1
2012: 5.8
2013: 6.0
2014: 7.8
2015: 4.0

They have outstanding shares of 63cr. Even with your profit estimate of 150cr. (in a few years) for Tata Global from the Starbucks franchise, that will hardly move the needle by Rs 2.5 per share. In a company that hasn’t shown any EPS growth over the last few years, just this alone doesn’t look like a very compelling reason to invest - just looking at the numbers.

The string itself suggests that this is a discussion on your portfolio, so obviously it is entirely your call but all investment must be done with full DD.

Best.


(Aditya) #30

I agree Angad. Any idea on how the subsidiaries are doing? I think most of them being in mature markets are the culprit for TGBL’s lacklustre EPS growth


(Angad Singh) #31

No idea Aditya. I don’t track the company. But just in reviewing the standalone and consolidated EPS:

  1. Barring the last year (’15), for the rest of the years the consolidated EPS seems to be higher than standalone EPS and

  2. The anaemic growth is apparent whether seen in standalone or consol figures.


(ranvir dehal) #32

@ Angad and Aditya…yes u r right…their growth track record has been ordinary…inspite of ample opportunities like-

  1. Being No1 tea brand in India and still not launching an instant coffee brand in India that too after knowing fully well that coffee is a far faster growing seagment.

  2. Not taking its Mineral Water brands like Himalyan, Tata Gluco(inspite of having a JV with Pepsi in gluco plus) and Tata Water Plus Pan India.

  3. Going slow on acquisitions in India and abroad.

But off late the management has turned far more agressive. As is evident from their actions…Acquisition of MAP coffee(Australian company), Launch of Tata Grand…its Instant coffee offering to take on the Bru-Nescafe Duoopoly in India, Efforts to take Himalyan mineral water pan India, its JV with Starbucks, management commentary on being on the look out for acqiusitions and Cyrus Mistry’s clear intent on transforming Tata brand a lot more consumer facing.

However these thing take time. May be I am too early into buying TGBL. I think I was tempted by yearly price correction and aggressive management commentary. Hoping for a descent uptick in its performance.


(Tolaha) #33

Tata Coffee had/has a few instant coffee brands like Tata Kaapi from long time. Maybe they were predominantly in Southern markets. So we now have 2 related companies trying to target the same set of customers. Or maybe their focus are on different regions.


(ranvir dehal) #34

@Tolaha…yes u t right…they have a regional brand…Tata Kapi. They also have regional brands like…Mr Bean and Coorg Coffee. All of them in South India.

However the criticism is they have not taken any coffee brand pan India.
If TGBL can be bold enough to acquire Tetley, what was stoping them from launching a pan India Coffee Brand???

But they have now taken the plunge. It is a very good move. Indeed.


(ramanhp) #35

(ranvir dehal) #36

Few more bouts of activity…

Reduced my holding in Jagran Prakshan by 1/4th ( after a 17% gain in 7 months) and in Yes bank by 1/20th( after 40% gains in 20 months)…converted them into UPL at cmp.

Basically trying to bet on agrochemical stocks( UPL and Rallis (bought 3 days back)) after back to back draughts in India and the worst draught in Brazil in 100 years.

I think both these stocks are high quality stocks and their corrected share prices have most of the negetives priced in.


(ranvir dehal) #37

Updated portfolio…

OLD HOLDINGS( more than one year)…

Bajaj Finance- 15%( Increase percentage due to run up in price, long term bet)

Marico- 8.5% ( Doing well, long term bet)

Emami- 8.5% (Doing well, long term bet)

Jyothy labs- 9% (Performance improving by the day)

Yes Bank- 10% ( Reduced weightage (earlier 15%) due to selling at 720 levels)

KVB- 12% ( Has been a laggard, however an uptick in performance is expected anytime)

Torrent Pharma-10% (No complaints here)

Jagran Prakshan- 3%( Down from 6% due to profit booking)

RECENT BUYS-

Godrej Consumer products- 5% (@1250 levels-long term bet)

United Phosphorous- 5% ( I see it as undervalued, expect profit growth and PE expansion going forward)

DB Corp- 6% ( Expect a 20-30% bounce back in price with increase in economic activity)

Rallis-3% ( Contrarian buy)

TGBL- 2% ( Contrarian buy)

Bajaj Auto- 3% ( Contrarian buy )

RECENT EXITS/PROFIT BOOKINGS-

JB chemicals, IPCA Labs, ITC, YES Bank( partially)

Regards,
Ranvir


(Anupam) #38

Overall good portfolio. But why are you selling after 15-20% gains. Compounding benefits will accrue with time. Esp jagran prakashan. Can you share what’s your return at overall portfolio level in last 12 months.


(ranvir dehal) #39

@amishra

Selling of JB chemicals and ITC after 15-20% gains was due to the fact that I had reduced conviction in these stocks than what I had at the time of buying (basically a change of stance).

Partial selling in Jagran and Yes bank due to that fact that I thought United Phosphorous provided a mouth watering opportunity at 420 levels.

Overall gains for last 12 months- 35%. Could have been near 45-50% but for KVB which had a rough year and I had made a huge bet (by my standards ie 2400 shares) on its performance turnaround.

Aim to enjoy the benefits of compounding in Emami, JLL, Marico, Bajaj Finance, Torrent Pharma,UPL, Yes Bank etc.

Regards,
Ranvir Dehal


(anand) #40

Commendable to have 35% return in a down market. I like the way how you rotate the portfolio at times.
Great job! :astonished: