Yogesh's blue chip 10 Portfolio


(Yogesh Sane) #285

There is no change in strategy due to LTCG. It will be beneficial to hold on to stocks as long as possible to delay paying LTCG but it will have to be paid eventually without any indexation benefit. Cost of holding on to overvalued stock or missing out on not buying another undervalued stock is much higher than benefit of delayed payment of LTCG.

I rebalance after all annual reports are in (around July-Aug) and I have time to go though them to make decision (Oct). NSE also re-balances Nifty 50 around March and Sept so I re-balance after that.


(Yogesh Sane) #286

Can you please elaborate how you calculated 10% portfolio return?
Here is my calculation assuming the same purchase date and rebalancing date that you have assumed.

Valuation Date Portfolio Nav Nifty 50
31-Aug-16 1,000 8,786
30-Sep-16 989 8,611
31-Oct-16 1,001 8,626
30-Nov-16 948 8,225
31-Dec-16 945 8,186
31-Jan-17 1,020 8,561
28-Feb-17 1,040 8,880
31-Mar-17 1,077 9,174
30-Apr-17 1,100 9,304
31-May-17 1,114 9,621
30-Jun-17 1,094 9,521
31-Jul-17 1,188 10,077
31-Aug-17 1,191 9,918
30-Sep-17 1,169 9,789
31-Oct-17 1,192 10,335
30-Nov-17 1,146 10,227
31-Dec-17 1,160 10,531
31-Jan-18 1,220 11,028
28-Feb-18 1,188 10,493
31-Mar-18 1,144 10,114
30-Apr-18 1,261 10,739
31-May-18 1,252 10,736
30-Jun-18 1,242 10,714
12-Jul-18 1,260 11,023
Holding Period Return 26% 25%

(Alok Bhola) #287
31-Aug-2016 to 31-Aug-2017:
Stock Alloc Init Value Return Final Value
BPCL 8% 8,00,000 32% 10,53,600
Coal India 7% 7,00,000 -29% 4,99,100
Eicher Motors 9% 9,00,000 38% 12,43,800
HDFC 16% 16,00,000 26% 20,20,800
ITC 8% 8,00,000 9% 8,68,000
Lupin 8% 8,00,000 -34% 5,29,600
Maruti Suzuki 9% 9,00,000 52% 13,71,600
Power Grid Corp 8% 8,00,000 19% 9,49,600
TCS 10% 10,00,000 -1% 9,94,000
Yes Bank 17% 17,00,000 29% 21,89,600
Total 100% 1,00,00,000 1,17,19,700
Portfolio Return 17%
31-Aug-2017 to 13-Jul-2018:
Stock Alloc Init Value Return Final Value
Aurobindo Pharma 9% 10,54,773 -27% 7,71,039
Eicher Motors 8% 9,37,576 -17% 7,79,126
ITC 10% 11,71,970 -12% 10,30,162
Indiabulls HF 12% 14,06,364 -4% 13,47,297
Infosys 12% 14,06,364 -7% 13,02,293
Lupin 9% 10,54,773 -13% 9,16,598
Power Grid Corp 12% 14,06,364 -16% 11,77,127
TCS 8% 9,37,576 61% 15,11,373
UPL 8% 9,37,576 -31% 6,46,927
Yes Bank 12% 14,06,364 7% 15,03,403
Total 100% 1,17,19,700 1,09,85,344
Portfolio Return -6%
31-Aug-2016 to 13-Jul-2018:
Portfolio Return 10%

(Yogesh Sane) #288

Please check your returns number for 31-Aug-2017 to 13-July-2018 period for Infosys, Eicher, ITC and Aurobindo. Returns in your calculations are less than actual returns on these stocks.

Price As on 31 Aug 2017 Price As on 12 July 2018 Return
Eicher Motors 31,404 28,020 -11%
ITC 282 277 -2%
Infosys 915 1,295 41%
Aurobindo Pharma 725 606 -16%

Source: BSE

These are just price returns. My NAV calculations are as of July 12 2018 and include dividends.


(Alok Bhola) #289

I have incorporated the corrections suggested by you and have re-checked rest of the figures as well. Following are the revised calculations:

31-Aug-2016 to 31-Aug-2017:
Stock Alloc Init Value Return Final Value
BPCL 8% 8,00,000 32% 10,53,600
Coal India 7% 7,00,000 -29% 4,99,100
Eicher Motors 9% 9,00,000 38% 12,43,800
HDFC 16% 16,00,000 26% 20,20,800
ITC 8% 8,00,000 9% 8,68,000
Lupin 8% 8,00,000 -34% 5,29,600
Maruti Suzuki 9% 9,00,000 52% 13,71,600
Power Grid Corp 8% 8,00,000 19% 9,49,600
TCS 10% 10,00,000 -1% 9,94,000
Yes Bank 17% 17,00,000 29% 21,89,600
Total 100% 1,00,00,000 1,17,19,700
Portfolio Return 17%
31-Aug-2017 to 13-Jul-2018:
Stock Alloc Init Value Return Final Value
Aurobindo Pharma 9% 10,54,773 -17% 8,75,462
Eicher Motors 8% 9,37,576 -12% 8,25,067
ITC 10% 11,71,970 -4% 11,25,091
Indiabulls HF 12% 14,06,364 -7% 13,07,919
Infosys 12% 14,06,364 44% 20,25,164
Lupin 9% 10,54,773 -12% 9,28,200
Power Grid Corp 12% 14,06,364 -17% 11,67,282
TCS 8% 9,37,576 59% 14,90,746
UPL 8% 9,37,576 -32% 6,37,552
Yes Bank 12% 14,06,364 7% 15,03,403
Total 100% 1,17,19,700 1,18,85,885
Portfolio Return 1%
31-Aug-2016 to 13-Jul-2018:
Portfolio Return 19%
Nifty 25%
MF Large Cap 23% (12% - 35%)

The above calculations do not include dividends. Dividends will add a few % points to the portfolio returns, but then you need to add Nifty Div Yield to the Nifty returns as well for an apple to apple comparison. Hence there won’t be much change in the relative performance.

As can be clearly seen from above, both the Nifty and an Average Large Cap MF have outperformed the portfolio over the 2-year period considered. The only point I want to make here is that there can be no low maintenance direct stock investment strategy. You either go the whole hog and invest considerable time and energy in stock selection, or simply invest in MFs and chill :grinning:


(Karthickphilistines) #290

Thank you Yogesh.
You are just Great… Sharing your wisdom and the investing style of yours is just great…
Creating our own portfolio and seeing how it works is interesting and exciting unlike boring Mutual funds…
You are great in Finance stocks…
Hats off to you…


(Prasad) #291

Yogesh ji, could you please elaborate how do you calculate returns inclusive of dividends, etc. ? Apologies for a basic question, and if it is there on the site, kindly point me to it. Thanks for all the inputs and thoughts you shared !!


(Yogesh Sane) #292

Total Returns = (Closing price + dividends )/opening price.


(Raj) #293

@Yogesh, Would you consider Reliance Home as a valuable buy, mispriced (due to promoter reputation) for a high growing business?

Also if you have any view on Mas financial and Lancer container, kindly share…


(Yogesh Sane) #294

Lenders should either be a deposit franchise or asset franchise (or both). Reliance Home and MAS Financial both rely on agents, DSAs, other financial institutions or bulk borrowers (builders) for a large part of their lending portfolio. these companies and their partners are intermediaries that add a layer of cost without adding equivalent value. They mainly bank on the unbankable to grow their business. Over long term, disintermediation and higher awareness and penetration of cheaper loans will reduce their opportunity size especially for MAS.

Reliance home generates poor ROE as their operating costs are high even though they lend to builders and other bulk borrowers. I don’t think market is mispricing the stock given their fundamentals.

no idea on lancer container.


(Raj) #295

Thanks @Yogesh_s. I saw your presentation on CSL finance. Will they also be subject to disintermediation risk? Or is there another driver for their growth…

also is the risk so near future…? I think it will be a while before this can happen given the present level of banking penetration in India…


(Prasad) #296

Yogeshji, thank you for the inputs !


(Amit) #297

Hi Yogesh, Which corporate database you use for data analysis ?


(Amit) #298

Hi Yogesh,

How do you see steel companies now in India given lot of dumping by China, S Korea and Japan. Still Holding Beekay ?

Disc: Holding Prakash Ind, SRIPIPES, Maithan Alloys and Vedanta


(Yogesh Sane) #300

@rajsuccess
CSL does business directly with borrowers in the wholesale portfolio which makes up 90% of its current portfolio. In fact, until recently they had just a few loans given to few builders so the CEO would underwrite each one of them.
Going forward this will change. SME lending involves DSA but not sure what model CSL is following.
Disintermediation is not an immediate risk and it may not even happen. It is just an emerging trend but large lenders like Bajaj Finance are going direct to reduce costs so others may follow to stay competitive.

@aammiitt2
I use Capitaline.

I am still holding beekay and in fact added some during recent pullback in stock price. Economics of a rolling mill is different from that of a integrated steel plant. While an integrated steel plant benefits from higher steel prices (especially when coupled with stable ore prices) a rolling mill benefits from rising volumes. Moreover, for a small company like Beekay, local demand-supply situation is far more important than global steel scenario. Beekay is benefiting from rising utilization of its own TMT plant in Vizag than anything else.


(Raj) #301

@Yogesh_s can we have your view on building material sector please? There is reports of excess supply and shortage in demand…how do see this for next 5 - 10 years? Will you still consider ceramic players - Cera etc. What are your top picks/bets


(sarthak kumar) #302

Waiting for the annual update to your Blue Chip 10 Portfolio


(Yogesh Sane) #303

Building material industry is feeling the slowdown in the real estate sector. I have no idea when the slow down will be over and growth will pick up. For Cera and Kajaria, sales appears to be rising but margins are going down and balance sheet isn’t as strong it used to be so I am doubtful if the stocks will trade at premium valuations they were trading before. I think these stocks will get valuations of cyclical stock rather than that of a growth stock. From the perspective of a cyclical stock, valuations of Cera and Kajaria is still high.


(Yogesh Sane) #304

Here is a link to a presentation I made at a recent Mumbai Investors meet. It is about lessons learned over last 15 years of investing journey. This presentation is inspired by a similar session at VP meet in Goa earlier this year.

http://forum.valuepickr.com/uploads/default/original/3X/1/b/1b6d3144b5ec654401f35dee1c04b38c4159c039.pdf


(SMondal15) #308

Yogesh sir very nice and informative presentation. Sir what is your view on CGD company specially on IGL.Can we think it for 15% cagr perspective. Company is on average showing 12% to 15% volume growth.Only company in NCR region. RC Bhargav of Suzuki pushing for hybrid and cng car rather than electric varient.Pet coke furnance oil ban across NCR. Same time threat of elctric cooking device for png.