Subashnayak_1983's portfolio


(Raj Panda) #41

Thanks subash for letting us know your thought process.

Yes Ayush, even i am of considering the same after selling a big portion at 310. The results are in line with expectation of high 40s? At roughly 5 times FY13 it looks decent. Due you think the 1-2% reduction in OPM is due to raw material cost going up ?

Regards


(Subash Nayak) #42

Hi Hitesh bhai, other seniors,

Well, it seems my logic on GRUH finance is not so sound. I bought it at a very high valuation, and hence not much margin of safety here. After 12% loss I am not able to decide whether to book loss, and invest in better looking stocks with higher margin of safety like Hikal, or stay invested in GRUH finance. The good point is that I have just 3% exposure to GRUH finance.

My lack of knowledge in analyzing nbfc stocks implies I am not able to reach any decision with high conviction. Please help me taking proper decision.


(Hitesh Patel) #43

subash,

GRUH finance is a stock worthy of a long term portfolio. You should not be perturbed by short term swings.

Technically it has formed a bearish candlestick pattern on weekly charts which in the past had correction lasting from 2-6 weeks. I think price damage might not be too much but sideways to slight down drifting correction might be there.

If I were you I would hope for more price correction to add more on the downside.

I think it will do eps of around 8.5 to 9 for fy 13. This is a stock which I expect to grow consistently at a 25-30% cagr for 5 years atleast if not more. If one were to value this one on price to book it will always remains expensive and currently is around 7-8 times. But the management pedigree of hdfc at the top plus the smaller size and addressable market should ensure that the company grows consistently.

I will put up a write up on recommendation on gruh in the long term section for further inputs.


(Raj Panda) #44

I agree here with Hitesh. This stock is worthy of core portfolio and pray for more correction if you want to own it for long term.

Disc: I own it from 2 digit levels as part of my core portfolio.


(Subash Nayak) #45

Got rid of low percentage weight stocks like JB Chem, Whirlpool, Atul, Hawkins, Indag, and GRUH Finance. Converted to Sequent, Hikal, and Ajanta (at 380 level).


(Subash Nayak) #46

Added Ajanta, Unichem, Hikal, Astral, Amar Raja, and Bajaj Finance. This is how my portfolio looks. Back to concentrated portfolio.

Stock Weight
Kaveri Seed Co (5) 14.26
Mayur Uniquoter (7) 11.62
Unichem Labs (6) 11.43
Ajanta Pharma (7) 10.57
Hikal (5) 9.40
Granules India (6) 9.39
Astral Poly Tec (3) 9.05
Sequent Scienti (5) 8.82
Amara Raja Batt (5) 7.78
Alembic Pharma (2) 3.62
Bajaj Finance 2.32
Guj Auto Gears 1.76

(Subash Nayak) #47

Reduced Sequent (with a decent profit). Added Mayur, Astral, Hikal and little bit of Dishman, and Hawkins.

Future plan :

1). Have a core portfolio of 6-7 stocks (Mayur, Astral, Hikal, Kaveri, Ajanta and Unichem) at around 10-15% allocation.

2). Second tier promising 6-7 stocks like Granules, Sequent, Amar raja, Alembic at around 5-7% each.

3). Third tier stock (can be as many I can have my hand on) with not so strong conviction at 1-2% (Hawkins, Gujarat Automotive, Dishman, Bajaj Finance, planning to add RS Soft, Aarti Drugs, Jyothy labs, Wockhardt in these category). Add more of these in a staggered manner on each appreciation of 4-5%.


(Hitesh Patel) #48

hawkins with not so strong conviction??

TED wale kafi saare log suicide kar lenge.


(Subash Nayak) #49

**

Lol,

I know for the fact that Hawkins/Page/Titan/TTK have given tremendous growth in past, and people have got benefited like big time. Hence TED folks have a fond memory and positive mental bias with them. They are awesome business with good moat, and expected to give 20+% CAGR for next 2-3 years. But they are well past their exponential growth phase (upper side of Sigmoid curve).

I feel in searching for next these type of company, who are at the lower end of sigmoid curve, and yet to be fairly valued because of being small cap, and less valuation, in a boring business (May be: Kaveri, Mayur, Astral, Ajanta, Unichem).

The reason I invested in Hawkins is because of 2 recent positive development (pollution issue resolution, and labor issue), and folks started giving a target of 3000 something. I am not sure how things will pan out because of these development.

hawkins

** conviction??TED **

lenge.

**


(Subash Nayak) #50

Interacted with a senior, and got to know that Hawkins is a super-bullish story. Sold half of Ajanta and converted it to Hawkins and FK Oncology (Hitesh bhai’s next big pick :slight_smile: ). Hwakins is at 5% of my portfolio now. Planning to take it to near double digit in a staggered manner.


(Sunil Bakshi) #51

Hi Subash

While hawkins has established visibility on sales growth and cash flow now, I am not sure about Kaveri. Though it has been a 3x, do we have visibility on sales growth in Kaveri? I have 4% kaveri , not sure whether I should add more.

Thanks

Sunil


(Subash Nayak) #52

Hi Sunil,

Hawkins post resolution of all of the issues, seems like a real good bet for me. To me it is a combo pack of growth story + consumption story + turnaround story.

I don’t think Kaveri has a such good visibility of growth, not because of the fact that it is not growing, but because of the peculiarity of the business of Kaveri, where 85% of the eps comes in june quarter, the rest 15% comes in next 3 quarters. And as you see they have doubled their EPS in last june quarter. Which implies the market should increase its price by 85% flat. But thanks to inefficient market, where people take time to digest such good result. It is available at a PE of 14, where as it was quoting at 18-19 pre June quarter result. So there is a scope of pe re-rating to original level till the next june quarter.

Due to their organic vegetable venture there should be decent growth in the remain quarters as well, so that might add little bit to future price as well. I feel it should reach 1400-1500 before June quarter.

At 900 (at the price where I loaded up Kaveri, it was a no-brainer investment for me). At 1100, I am not so bullish on it, but still believe in its ability of wealth creation in long run.


(Subash Nayak) #53

Reduced Unichem to 7% of my portfolio, Ajanta to 3%, and Sequent to 1% of my portfolio. Added Dishman (now 10% of my portfolio), and Aarti Drugs (5% of my portfolio).

Make sense to reduce Ajanta due to tax-uncertainty. Sequent result are not so good, hence sold majority of it with overall minor loss (I wish I would have sold it when it was at 20% gain, and 8% of my portfolio).

I find better opportunity in Dishman as compared to Unichem, Hence converted a portion of Unichem to Dishman. I am adding Aarti in a staggered manner on each rise (At 2.2% dividend yield and 8 PE seems a good buy to me).


(Subash Nayak) #54

Latest Portfolio. Stock count has increased to 17 due to taking fresh positions in La Opala, Cera, Indag and Infinite Computer. Added more of almost all existing stocks with exception of Ajanta, Unichem, GAG, and FB Onco. Pharma is at 37% of my portfolio (as compared to 45% before).

Stock Weight
Mayur Uniquoter (9) 13
Kaveri Seed Co (6) 12
Astral Poly Tec (5) 11
Dishman Pharma (5) 10
Hawkins Cooker (4) 9
Granules India (9) 8
Amara Raja Batt (6) 7
Aarti Drugs (5) 6
Hikal (4) 5
Unichem Labs (5) 5
Cera Sanitary 3
La Opala RG 3
Infinite Comp 2
Indag Rubber 2
Ajanta Pharma (3) 2
Guj Auto Gears 1
Fresenius Kabi 1

(Vinod MS) #55

Hi Subash,

Good to see that you made the right move in Astral and a good allocation too. I wasn’t too convinced with the price even at 280 levels.

Any reason for keeping out Shasun, Atul and Narmada Gelatin?

Cheers

Vinod


(Subash Nayak) #56

Hi Vinod,

I have already 17 stocks in my portfolio (5 more than planned 12 stock portfolio). So not adding new stocks that I would like to have in my portfolio like Shasun, Atul, Narmada Gelatine, Kajaria Ceramics, RS Software, Wockhardt, Everest Industry, Wim Plast, Kale Consultant, Jyothy Labs + few Media/Brewery/Plastic/IT Stocks.

Regards,

-Subash


(Subash Nayak) #57

Sold half of Hikal and converted the same to Unichem/Ajanta/Granules


(Subash Nayak) #58

Sold almost half of Kaveri seeds, Now at 8% of my portfolio.

Sold all of Aarti Drugs.


(Subash Nayak) #59

Sold 95% of my holding to book a house (Following Peter Lynch’s principle).

Portfolio structures remains same with almost equal % of 10-11 stocks (Mayur, Astral, Dishman, Granules, Ajanta, Unichem, La Opala, Cera, Amar Raja, and Kaveri Seeds)


(HG) #60

Its a big decision - all the best for the new house!!