Subashnayak_1983's portfolio


(divyansh ) #121

subash

m new to the world of investing. would request you to please take a look at my portfolio and suggest me some good reads .

thanks

divyansh


(Subash Nayak) #122

Dude,

No one believe you as a newbie in investing after looking at your stock selection, and exit timings. You seems like a pro. You have an awesome concentrated portfolio with a solid probability of beating sensex in a big margin. Glad to see you don’t suffer from the prevalent epidemic of “neomania” (for layman, investing in next big stock, new ideas).

Keep contributing here at valuepickr.

-Subash


(Subash Nayak) #123

Had enough fun with Hawkins. Sold 90% of my Hawkins with a minor loss.

Added Ajanta, Unichem, PolyMed, GRUH, Atul Auto, Cera, Orbit exports with the proceed


(divyansh ) #124

Subash

Thanks for the encouragement . I think margin of safety is one parameter which can help you make above average market returns and last I was comfortable during the fall of dec 2011.

These days I m restricting myself in making fresh capital allocations and looking only for stocks which have fared well during the downturn and have actually came out with flying colours. And markets always rewards the patient ., so I m sitting tight and waiting for the right opportunity . However I m not selling away any stock of my core portfolio.

Regards

Divyansh


(Hitesh Patel) #125

I think the main problem with people buying hawkins at 2400 odd levels was the price behaviour of the stock. It just refused to budge below 2400 odd levels. To me it seemed as if stock was on steroids, and buyers were not looking at valuations or else projecting very optimistic projections. Many a times one gets sucked by price behaviour of stock while buying it.

Hawkins has had a chequered past if we see the past few quarters. I think the stock price has held today also because maybe some HNIs/MF guys or PMS guys may be supporting the price. With stock in most optimistic scenario likely to post eps of close to 68-70 at cmp of 2200 plus it seems fairly valued.

Hawkins is a stock which needed to be bought when there were a lot of uncertainties. Currently with all the uncertainties gone – labour problem gone, pollution control problem gone-- stock price has gone up in anticipation of good results which have not come about.

I dont know why sales growth is so tepid for a company with such a strong brand strength. With production constraints removed I think there should have been atleast 20%-25% sales growth in current quarter. But that has not come about and I for one have been frankly disappointed with the results. People will justify these results and this stock price with arguments that next few quarters will be good blah blah – and who knows they may be right also – but the way the company has a habit of springing surprises – mostly negative-- one is wary of getting a mindset to buy.

If I have to give such lofty valuations to any stock that will most definitely be Page Inds. – There seems to be a huge potential for the stock in terms of addressable market in comparision to its current market cap of 3800 crores odd. I can easily see Page Inds having a market cap of 15-20K crores over next few years.


(Rudra Chowdhury) #126

Agree that the top line numbers weredisappointing to say the least. But a quarter here and there should not be strong reasons to get out of core portfolio holdings.

There are very few companies with such honest management + strong demand + superior brand + strong cash flows + operational efficiency.

When Hawkins story was discussed, we cautioned time and again to have a plan B ready, in case things do go wrong/against expectations.

While for some that plan B is adding more at sub 2000 levels, for others that plan B is selling out.

As said, ideas can be borrowed, but not conviction.

Hawkins earnings have been stagnant seen Fy10 while competitors have moved. So based on a FY14E P/E the stock do present a decent opportunity for next 2-3 years.


(Hitesh Patel) #127

looking at sales growth since fy 10, I will not call management efficient or intelligent. Just look where ttk prestige has gone since then and where these guys stand. They may though be honest.

I think they missed the whole consumption bus while competitors made hay. Now it is a moot question how they delivery on sales and profits front.

Only thing that needs to be watched by Hawkins holders is that they do not suffer from ownership bias where they do not see the negatives inspite of things being pretty clear.


(Subash Nayak) #128

100% agreed with you Hiteshbhai. I too was sold out to the idea of huge increase in sales/profit of Hawkins post issue resolution by the folks who have a endowment bias of holding Hawkins.

Post result, reanalyzed my decision of having such high allocation in my portfolio at such high valuation, when there are at least 10 better stock in my portfolio available at a way better valuation.

In place of Hawkins, I am planning to make GRUH my second largest holding (I prefer having 1-2 such high PE, high PB stocks in my portfolio, so as to ride with a steady compounder, and play contrarian to my low valuation, or GRP model).

I am yet to develop the conviction level with Page, may be I need to re-look at it as my 2nd high valuation stock.

By the way, I have starting to feel, that having super high valuation stock (that too for a solid reason) like Page/GRUH/ITC/Titan is part of value investing.


(Subash Nayak) #129

Thanks Rudra for your honest feedback.

Your reasoning might be 100% correct. Agreed Hawkins is a beautiful girl, but as Hitesh bhai tells, I don’t have to kiss all of the beautiful girls :slight_smile:

By the way, there is an another name for stocks with high investor conviction, and near zero growth - “value trap”.

Regards,

-Subash

weredisappointing


(Manish Vachhani) #130

:))

Comparing a stock with a girl makes one to fall in love with it. That makes an attachment to the stock and would be difficult to sell it. That could be the case with Rudra.

I would rather ask myself - why the topline growth was flat despite all the production issues being resolved? Was that due to poor productivity or due to poor demand or due to prestige not giving its market share? In either of the case, the decision would be to reduce the holding.


(Raj Nair) #131

It seems the expectations were very high regarding increased sales immediately after the resolution of pollution control board issue in Hoshiarpur .

The resolution happened on October 25th, almost one month into the quarter. I feel it is too much to expect sales growth in the same quarter. A more realistic picture of sales improvement will be seen only in next quarter.

I plan to give benefit of doubt and wait for one more quarter.

Disclaimer : Hawkins is almost 12% of my core portfolio, so my views could be biased.

:))


(Subash Nayak) #132

Giving benefit of doubt doesn’t seems to me a good idea unless there is a solid reason behind it, i.e. Management giving target of x% of sales growth in next 1-2-3-4 quarters.

One must be aware of the fact that most investor ignore one bad/below-expectation quarter for such good company, but the same might not be true for 2-3 consecutive quarter. The punishment might be severe in such case.

-Subash


(Rudra Chowdhury) #133

Good to see people jumping on to foregone conclusions of endowment bias/in love with your stocks/ownership bias etc. etc. :slight_smile:

As I wrote in the post itself, the top line numbers aredisappointingno doubt, but for someone making an entry during Oct-Nov this was pretty anticipated. There is no point jumping the gun so soon.

There may be intermittent delays from RM procurement to sales booking to delivery and things may spill over from one month to next. So whatever was not realized / could not be realized will reflect in the next quarter.

Having said this, Jan - Mar quarter should be the best quarter at least in some time. The investment thesis was primarily based out of FY14 and FY15 with the hypothesis that due to the stagnant earnings of last few years, the trailing P/E is very high while the forward P/E may not be that high. And fwd PEG gives enough reason to mark an investment candidate.

Nonetheless, I am happy to hold and will take a decisive call post March result if the same under performance continues in terms of revenues.


(hemant gupta) #134

agree with rudra here. hawkins was never a fy13 story anyway. investing is not a one day match and conclusions should not be made based on every quarter’s results. the headwinds have taken some time to get away and once everything stabilises in terms of production, we should seea good uptick in the results. I am happy to wait for fy14 to complete to see the full effects of removal of capacity constraints and possible capacity expansion as well. Q4 is usually a very good quarter for hawkins and should provide indication of things to come. Interesting thing is the volumes over yesterday and today have been fairly small despite a decent instituitional holding which tells us that institutional guys are happy to be more patient while short term investors which bought last week in hope of blockbuster results panicked out.

technically, the stock completed a five wave uptrend followed by now a test of 50 dma. this could have only been the first leg of correction and not all of it. we will only know in hindsight. if correct back to 2000-2050 levels, would be happy to buy some more.


(Rohit Kotewale) #135

Hawkins results can't be compared with last quarter results i guess. There is a bit of cyclicality involved in the results.

Qtr Sales PAT NPM EPS
Mar-10 81.8 7.9 9.66% 14.93
Mar-11 103.97 9.84 9.46% 18.60
Mar-12 103.22 9.88 9.57% 18.68





Jun-10 62.39 8.09 12.97% 15.29
Jun-11 74.44 7.29 9.79% 13.78
Jun-12 81.08 5.24 6.46% 9.91
Sep-10 84.92 8.04 9.47% 15.20
Sep-11 97.92 9.33 9.53% 17.64
Sep-12 111.59 10.18 9.12% 19.24
Dec-10 81.37 5.8 7.13% 10.96
Dec-11 87.49 5.3 6.06% 10.02
Dec-12 103.3 7 6.78% 13.23


If one observes carefully, Dec qtr results have always been down as compared to Sep qtr results.
Also Mar qtr sales have grown 20-25% over Dec qtr sales.
The OPM in Dec qtr has been 6-7% and that in Mar qtr has been around 9.5%.
So assuming 20-25% growth here as has been a trend in previous years, here are the projections for March qtr

Qtr Sales PAT NPM EPS
Mar-13 125 12 9.60% 22.68


The results for FY12 can thus be
Sales-- 400 cr
PAT-- 35 cr
EPS-- Rs 65

I guess many are disappointed by Q3 results bcz people saw blockbuster results in Q2 and simply extrapolated those to Q3.
I guess where we got it wrong is that Hawkins is not an IT company wherin we can simply extrapolate Q2 to Q3.
Sales were down due to Diwali discounts. Also 7 cr advertising expense is repetitive in Q3 as observed from last 3 yrs. They send their dealers to Canada and Singapore trips.. So such a high expense won't be incurred in Q4.
Also they are doing RnD on induction cookers which will be an added kicker.

Hawkins remains a long term story and FY14 should probably be the best year amongst the last 2-3 yrs.
P.S: Have around 25% allocation to Hawkins.


(Supratik) #136

Yes not bad results!! May be expectations had to be trimmed down. It is though not the best stock in the market but a decent enough.

Nice details Rohit!!!

~Supratik


(anil) #137

Hi Rudra,

Can u please give a rough estimate about your expectation of FY14 and FY15 EPS numbers and revenue growth numbers.

It will helpful, as I could not find any broker reports on this.

Thanks

:)) aredisappointingno


(Krishna kumar) #138

sales of 125 crores in Q4 is doable for hawkins unless there is slump in the consumer spending. What we are seeing today is that the very consumer companies are struggling to increase the sales and spending heavily on advt, promotional expenses.

It happens when the GDP grows below 6% and the inflation stays.

just waiting for page results and let us see the trend.


(Subash Nayak) #139

Added Astral and Supreme to my portfolio.


(ranvir dehal) #140

SUBHASH

what has prompted you to add astral and supreme at these levels . is it a valuation play or growth play . results for both of the counters look average .

however in case of astral blaze master has got BIS certification and has opened up a good sizable market.,and supreme has some big capex plans about the composite cylinders (need to see how this will work out )

would like to know your views

ranvir