Ranvir's Portfolio


(kapil1301) #61

Hi @ranvir,

I am too looking at adding FMCG to my Portfolio.

You already have Marico, JLL and GCPL and Emami in your Portfolio and I have read your views and Annual Reports of these companies.

One Stock I would like to know your views on is Britannia Industries.
It has shwon Significant Margin Improvement off late and it occupies quite a Bit of Shelf Space in Stores.

There are 3 big Players in this Segment PARLE,ITC and Britannia.
Britannia seems to be most focused and gaining Market Share Continously although it has risen quite a bit and trades at high valuation but for FMCG part of Portfolio i am looking for at least 3-5 years holding period and expecting 12-15% return + Dividends.

From their Investor Presentation I can make out that now they are looking to expand their operations in international Market plus will focusing on Rusk,Cakes and Dairy Business. (Basically want to be a Complete Food Company).
With the Pepsi Cola leaders at the helm it does look interesting to me.
Would love to know your views on it.

Thanks and Regards,
Kapil Gupta


(ranvir dehal) #62

@Kapil....I agree with most of ur observations.

If I were to have more money ( which I hpoe to get some time in future), I would certainly start buying Britania. ( On dips that is )
In FCCG, the trick is to buy into market leaders in under penetrated categories.

Britania certainly fits the bill :slightly_smiling:


(kapil1301) #63

Thanks @ranvir for sharing your views.

I am too waiting for my salary to start adding FMCG stocks ( at present Britannia and GCPL) looks interesting to me.

Could not understand why the ROE of JLL is not at par with other FMCG stocks because otherwise looking at its market cap and the market size available to expand it could be a safe long term bet. (It seems to be to my untrained eye)

Regards,
Kapil


(varun jain) #64

I will definitely study UPL. Analyzed it earlier in 2012 and at that time I decided to go for Rallis India and Bayer instead. Rallis I sold out at 225 odd after buying at 120 odd and Bayer is a forever kind of hold now. Now Rallis again looks promising to me at 150 odd.

I read somewhere that most of the triggers have played out in torrent pharma. May be alembic pharma, Biocon, Shilpa and aurobindo (cheapest with best growth returns and parameters) are better off. The first 3 I hold.


(varun jain) #65

JLL ROE is climbing very fast. After Henkel buy out its debt surged and profits tanked for a while but now it has started paying off. Its a 5 yr kind off bet minimum and am looking at min 5 bagger in next 5-7 yrs. Its an innovative company.


(ranvir dehal) #66

@kapil1301..... Varun's comments wrt JLL mirror my views !!!


(kapil1301) #67

Hi @varvp14 and @ranvir for your Views and valuable Inputs.

Regards,
Kapil


(ranvir dehal) #68

Hi Bhai log,

I think the moment of reckoning has come( It had come earlier as well...in 2008 and 2011).
Planing to mortgage my house and buy some of my favourite shares.(Insha-allah)

If all goes well( ie the bank agrees), will buy heavily into the following companies(in order of buying percentage-
Cipla
HDFC( not the bank )
GCPL
Axis Bank
Hero Moto Corp
Bajaj Auto
Jagran Prakshan

The first 4 are sacrosanct ( in my mind )
5th , 6th and 7th are meant for my father who needs the dividend income.

Basically I want U guys to suggest some more names that offer high safety, high dividend yeild and descent growth( 12-15% kinds ). So as to replace the 5th, 6th and 7th name.

Eagerly waiting for the loan to be disbursed and ur comments.


(varun jain) #69

Ranvir

We are still not in 2008 phase and valuations of good business are not at rock bottom. I still can't find good business at good enough valuations to load into. The stocks may have corrected 20-40% but from no stretch of imagination they are cheap. A house is something you need to live life long and mortgaged it in case of any emergency crisis unless its your second house then its ok.

I would strictly advise against it.....


(ranvir dehal) #70

Hi Varun...
Yes there is a second house. Family owned that is.
More over it is only a loan against property( Not selling it )

That is the context.


(varun jain) #71

I wld still advise against it as we are still not there in terms of attractive valuations


(Anupam) #72

I suggest to use personal savings equity and not mortgage house and take loan. Beyond risk of loan, actually by taking personal savings route you will stagger your purchase over 6 months to 1 year. This will help you to avoid lump sum purchase. Also without solid triggers markets will remain under pressure and you can get even better valuations in times to come


(Aniket Gore) #73

"Leverage when combined with stock market volatility equals dynamite"

You are attempting leverage, creating liquidity against your asset with the hope that you will not witness a downside on the investment you make.

If the market itself gets hit by an unforeseen crisis (imagine North Korea nukes South Korea tomorrow) - margin debt can turn your investment hopes into a quick disaster. You can kiss your home goodbye. Therefore what you consider an investment prospect is in reality a gamble.

The orgy of margin buying during the 1920s boom, helped precipitate the Crash of 1929 as thousands of investors became unable to make their so-called "margin calls."

Kindly reconsider your idea.
All the best!


(Nikhil Jain) #74

Ranvir,

Investment of any kind should not cause you stress. And I can tell you from personal experience that leveraging is very emotionally taxing, unless you are a robot.

Moreover, mortgage of any kind means negative cash flow for you since day one, while stocks may take months/years to give you significant gains (apart from upside and downside, stocks can move sideways for long periods).

Not to mention that you sacrifice another 15% of your profits, in the form of STCG, if you cash in prior to 1 year.

All in all, looks like a 'highly stressful and odds stacked against you kind of adventure' to me.


(ranvir dehal) #75

Thanks Bhailog for ur valuable inputs and genuine concerns.

The point is that it is our family decision to sell this house anyway. So till the time we find a buyer, I thought why not leverage it by raising a loan against it ( And repay it in one go when the house is sold ).

I ll have to pay the EMI till then. ( Thats the only thing ).

So, I did it.

Bought Cipla and HDFC (not bank) today.( 6 % of portfolio, each )

Both were quoting at their 52 week lows. Both didnt participate in the rally today. So, i thought that it was a good time to jump in.


(ranvir dehal) #76

A few more bouts of activity today.....

Sold 50% of my holdings in Bajaj finance today and converted them to its parent- Bajaj Finserv.

Reason- Valuation gap to me was too significant to ignore.


(ranvir dehal) #77

Bought bajaj auto @ 2230.

Increased my allocation in Bajaj Auto to 6% of portfolio ( aprox ).

Reasons-

Super normal growth in Indian Business in last 2 months.
Very good growth in CVs in Feb.

Weakness in exports is holding the stock back from exploding.

Hoping for Bajaj V to repeat the performance of Avengers launched last year ( sale of more than 30,000 units per month )

Improvement in domestic market share. Now above 20% from a low of around 15% in recent past.


#78

Isn't Bajaj holding a better option for someone holding both auto and finserve


(ranvir dehal) #79

Humm....good observation....will think about it.


(Rama Kumara Nagaraja) #80

@ranvir

pls share the current PF , any changes in last few months