Ranvir's Portfolio


(ranvir dehal) #41

Some new-SUPER SEXY LOOKING PRODUCTS FROM TGBL.....tata fusion tea and tata grande instant coffee!!! (Please chk on the net)

The fusion tea is also a new product Idea introduced for the first time in India.

Proof of the fact that TGBL is finally turning far more aggressive in their INDIA business. Management is finally walking the talk.

Disc: Invested


(ranvir dehal) #42

I am currently in Shimla. Went to a supermarket......was really surprised to see both Tata Fusion and Grande occupying prominent shelve spaces.

Look at the distribution reach and efficiency!!! These products were launched just 15-20 days back. Moreover the shop owner was really impressed with the Fusion tea's market response.

This is probably triggering the rally in the stock price.


(ranvir dehal) #43

Increased my stake in UPL and TGBL. Trying to take advantage of market fall.
Also bought Godrej Industries.


(Balajirp) #44

Excellent Picks... Like your clarity of thought and reasons behind each decision. Kudos.


(ranvir dehal) #45

Was feeling really greedy as the mayhem in mid and small caps continue. Took multiple gold loans and bought good quantities of UPL, Godrej Industries and TGBL.

Felt satisfied......as I was looking for a good buying opportunity for quite some time now.


(ranvir dehal) #46

Yesterday, Jagran Prakashan was up 4% and GCPL was down 4%.

I Always wanted to be in the best possible stocks for extremely long term. Took advantage of the opportunity and converted my Jagran Holdings into GCPL.

As such Jagran to me an undervaluation play. With the 20% rise in its stock price in the last 2 months or so, I thought it had significantly reduced its undervaluation. Therefore I decided to exit and bought-GCPL, a company I love

That takes GCPL holdings to Aprox-8%.


(Anupam) #47

Ranvir,

What as per you is Jagrans intrinsic value. Is it close to 165 price. I guess from your post its close to valuations now from being undervalued right ? Its PE is around 22

Now the critical point - Is GCPL undervalued too.........or you think GCPL is a better company than JP & thus in long run it will run higher, faster etc. Its PE is 56

I am invested in JP. However I am interested to add FMCG also


(Arun S G) #48

Hi Ranvir,

Can you elaborate on how you see competition to Godrej Consumer from Patanjali Products?


(ranvir dehal) #49

@ Anupam- Good Question. However I would like to answer BOTH qualitatively and not quantitatively.

As far as Jagran is concerned, I had bought it at around 130 levels. It is good business with ethical management and more than descent ROE, RoCE, Balance sheet etc. However it lacks growth.

That said, I never look for scorching growth as it is very difficult to identify and only a selected few can spot it early enough.( Somebody like Ayush Mittal on this forum ).

What I do look for is at least 12-15% revenue growth and 17-20% PAT growth. To me, if such an opportunity exists and the business is easy to understand and predict for next at least 10 Yrs, I generally Jump into it.

EASY UNDERSTANDABILITY AND PREDICTABILITY FOR LONG PERIOD OF TIME IS THE KEY FOR ME.

Suppose I were to commit a descent amount of capital and get returns @20% CAGR for next 10 yrs with high degree of certainty.....I ll end up being reasonably well off. That is all that I want.

A far as Jagran was concerned.....it had 3 main problems-

  1. It is a 10-12% revenue and 12-14% PAT CAGR business...at best.
  2. Long term predictability is not so easy due to the digital threat.
  3. Incremental amounts of money can not be invested at above avg rates of return. ( Because of which, the management was generous with dividend payouts. A big tick against the management's capital allocation strategy ).

Now we come to GCPL.....

At consolidated level, EPS for FY ending Mar 16 works out at Aprox- Rs 30-32. At cmp of Rs 1150, PE works out to be 35-37.

This is slightly expensive. I admit. But not as expensive as various other FMCG MNCs.

Let us look at a scenario 4 yrs down the line. Suppose the EPS grows at 20% CAGR for next 4 yrs, earnings would double. PE ratio calculated at my purchase price would then be 17-18. That will give an earnings yeild of Aprox-6 Percent which is the post tax return on FDs.

So, after a waiting period say 4 yrs, this investment will look as cheap or as expensive as an FD.

But for the rest of my life- I WILL BE LYING BACK AND ENJOYING THE SHADE OF THE TREE I PLANTED 4 YRS AGO.

This is a philosophy that I follow.

And for extra returns, I buy undervalued, but still above avg ROE business like Jagran, JB Chemicals etc and kind of trade in them with 6 months to 1 yr perspective


(ranvir dehal) #50

@Arun- GCPL is a major player in these segments-
Household Insecticides
Hair Colours
Bathing soaps and Hand Wash
Air Freshners

Except for soaps, Patanjali and GCPL products do not clash.
So, major impact on GCPL is not envisaged.


(ranvir dehal) #51

@ Anupam Again-

Similar was the philosophy behind buying Emami and Marico.
I am glad that I am already into begining of :grin:3rd yr of my waiting period in these stocks.


(gautham1) #52

about the patanajai impact: i agree on gcpl. but i dont think emami and marico are. patanaji does have products in the core category of these two companies.
i feel gsk consumer (he might enter this space also in the future :-)) and p&g are the least impacted.


(Aniket Gore) #53

GCPL's10 x 10 strategy, geographical diversity -focus on markets such as Africa is also a key differentiator.

The fact that GCPL is a prudent capital allocator with minority friendly promoters adds further comfort.

Disc: invested, part of core long term portfolio.


(Anupam) #54

Ranvir,

logic seems good, however excuse me for my basic questions. I am 3 months old in equity.

FMCG seems to be old and saturated. remember days when HLL, nestle, P&G used to consume 75% of TV ads. During 1995-2000. Now its hardly seen.

Rural market is well penetrated as well.

Whsts your 3-5 years view on GCPL, marico vs hll & itc


(ranvir dehal) #55

@amishra-

Giving u a quick reply and rough estimates wrt category penetrations but would love if u can search and dig out exact figures. It will help all of us.

In FMCG, future growth depends on a number of factors. Most important amongst them
( provided the company can execute the basics correctly ) are-

  1. Category penetration. Eg- In India- Soaps, Detergents, Fabric Whiteners are the categories that are reasonably well penetrated. Household insecticides, Hair Colours are not. Air freshners are in their nascent stages. Hand wash is also in nascent stage.

  2. Geographical expansion- Eg- Weather a company is selling in developed or developing markets, or a mix of the two etc. In case of GCPL, most of their markets are in Asia, LATAM and Africa. So their is a lot of comfort there. Also, almost half of their revenues are from overseas markets.

  3. Organic/Inorganic growth- Weather a company is pursuing organic or inorganic opportunities. In branded segments, it takes years if not decades to build brands. GCPL knows this. So they go in for Inorganic growth. Also, with their cash flows and highly priced equity, most acquisitions are not so difficult. This inorganic push adds to the growth in a big way.

All these things put together should propel GCPL for the next 10 years.


(Anupam) #56

Ranvir- enough food for thought. Thanks :slightly_smiling: Will study & provide inputs


(ranvir dehal) #57

Mind Blasting results from Bajaj Finance.....NP up by 50% in this weak macroeconomic scenario.

This is head turning indeed.

Also-Good results reported by GCPL, Marico, JLL, UPL, KVB and YB.

DB corp showing some recovery. It should take another 1-2 qtrs to pick up some good growth numbers.

Expecting positive surprises from Torrent Pharma.

Godrej industries, TGBL and Bajaj Auto are the others I have invested in and the results are not yet out.


(ranvir dehal) #58

After the recent market downturn and the resultant buying at lower levels, I thought it would be prudent to post my updated portfolio-

YES BANK- 10%
KVB- 10%
BAJAJ FINANCE- 11%
GCPL- 8%
MARICO- 8%
EMAMI- 8%
JLL- 8%
TGBL- 3%
UPL- 10%
GODREJ INDUS- 7%
TORRENT PHARMA- 9%
DB CORP- 5%
BAJAJ AUTO- 3%

Would love to hear some constructive criticism from fellow valuepickrs.

Regards,
Ranvir


(varun jain) #59

Hi

Good business in portfolio
Not very sure though of KVB, TGBL, Torrent and UPL if they form long term core portfolio. Marico, JLL, YES are excellent picks as of now. I do own them in mine. Bajaj Fin is too expensive and risky at this stage and is already at large market cap. Have a look at similar business Capital First - may be a next bajaj finance in the making. I have started accumulating it.


(ranvir dehal) #60

@ VARUN - KVB and TGBL are the weakest stocks in my portfolio. I concede.

I hold them as I hope for a turnaround in both. In KVB, clear signs of turnaround are visible.

TGBL has recently turned aggressive with new product launches and starbucks expansion. Lets see how it goes.

But, you are right in the sense that these two always force me to have a relook.

I however have high conviction in both Torrent Pharma and UPL.

If u were to go thru UPLs consolidated fin performance, annual reports and investor presentations, I am sure you will find it very attractive at current levels.

Torrent is already well researched at valuepickr.

WRT - marico, its q3 was superb- not only in absolute manner but directionally as well. Infact more so directionally.

JLL-CEO's latest interview on its q3 performance is heartning.

Since it seems u have a liking for consumer stocks, do consider GCPL as well.

Bajaj Fin is in an enviable postn in consumer durables finance. Although expensive, I keep telling myself not to trade in it.

Capital first is also interesting. Will study it in greater detail.

Regards,
Ranvir Dehal