To expand on this after listening to concall, it seems to me, the company needs to evolve in terms of communication with investing community. It seems they make certain remarks without giving too much of thought how community will take it. Need some one who is experienced in dealing with public markets communication, creates lots of confusion.
Update on Portfolio:
One change in core holding : Sold Laurus post Q3 call.
Portfolio value reduced by 20% from ATH due to recent market correction.
Deep cut in profits of Metropolis, from significant gains to loss. Large selling by Small cap world fund led to brutal fall. Competition in regular blood tests and wellness increasing with 1mg, Medplus etc entering space. Lupin also has plans. This might lead to margin drop and increased cost of sourcing business may take return ratios lower. But i believe building brand and customer/doctor trust in speciality tests will take time and we will know that in future. Promoter bought stock from the market giving some positive signals to market but there is little doubt business is going through headwinds, Dr Lal is also facing similar challenges. When growth for a stock valued as growth stock falls, consequences are disproportionate. Will wait for Q4 call and then decide.
Small allocation to below continue and reason:
Equitas : Awaiting better clarity on asset growth path and credit cost
Devyani : Valuation and PH scaleup
Yasho : Valuation and cyclical high margins, capacity peaking out before green field project is ready
Tracking Position
Rategain : Exciting new business, visualizing path to profitability
Meghmani Twins : Big capex plans, cheap valuation but past CG issues hangover, will add with caution
Watchlist
HIL
Tatva Chintan
SHIL
MTAR
Aptus
Jubilant Food
NGL Fine
Rajratan
Restaurant brand
Sandhar
Talbros
Sona BLW
Supriya
Xpro
Radico
Privi
Paushak
ICIC Sec
Clean Science
CE Info
5 Likes
Xpro seems very interesting. But unable to figure out if they are expanding their capacity for the Biax Dielectric films . This their fastest growing segment with expanding margins .Did they announce some capex plans ? and no idea about the plans to use money raised from malabar funds also right ?
They raised the money from Malabar exactly for the same purpose. Fund utilization will be to expand dielectric film manufacturing, latest investor presentation has the details.
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Got it thanks. They are saying the first phase will double their capacity and second phase they still planning.It will take 2-4 years. I think the current capacity is fully utilised doesn’t it mean that there would not be a major uptick in it’s sales volume and maybe an increase in margin slightly only ?
Any reason for selecting Devyani over Sapphire. I think they both are almost at par. Also, JB after the recent fall, including today’s, have started to look attractive. Would you be willing to add now? Would like to know your views.
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Biggest reason for choosing Devyani over Sapphire is my perception of management. Additionally Devyani has rights for all india online delivery of PH while Sapphire has restricted area rights. Also if you look at store locations of KFC, Devyani has more stores in non veg geography compared to Sapphire.
Chicken as a category is fastest growing in QSR and hence KFC is better placed. On Pizza, JB has 5X the no. of stores of Dominos compared to PH so that opportunity to expand is there, there is no doubt dominos is far superior in terms of customer preference and execution, but DIL management is guiding for significant improvement in pizza strategy. If you compare ADS of dominos and PH there is huge gap, so even if they improve their share from here on and remain number 2 only, then also it presents a good upside opportunity. All said and done valuations are not cheap for DIL.
On recent fall of JB and attractiveness, if we look at store expansion opportunity and expected SSSG growth it is still expensive and prospective return does not look promising, Popeye is a great promise but have not seen much on it, if i get better clarity of its ramp up plan that could be a trigger.
DIL is also expensive, only reason for me buying a small stake is the runway to grow is longer than JB but neither is priced to make a significant investment.
4 Likes
Raj Ratan - Tyres don’t go out of fashion. Hard to dislodge theme.
Map My India - Regulatory geospatial mapping + IoT theme
Sona Blw - EV theme
ICICI Sec - Financialization of savings theme
Clean Science - Radico - Great stocks with tailwinds + Good Active Management theme.
I would be closely tracking MMI and Sona for sure. they can be the 2 stocks that end up being a part of the niche basket with PMS MFs and ETFs.
I liked the watchlist
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Growth is not commensurate to valuation for MMI hence valuation risk is high. For Sona, unless stock crashes due to some bad news, valuation are extremely high even for the growth it has demonstrated. Hence while i like both the cos. but remain in watchlist.
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Portfolio update:
Added small positions in ICICI Sec, HIL, Tatva Chintan and Talbros. These are initiating positions in which if business/valuation/confidence improves i will add on else will drop. Trying this approach of incubating new ideas and selecting few from them basis performance/confidence to adding to core portfolio else either let them be what they are or eliminate.
Interested in MTAR Tech and Data Pattern in defence manufacturing/energy but highly overvalued so in watchlist.
3 Likes
Nice analysis overall.
- You sold Laurus Labs…any particular anti-thesis you came across?
- LTI is going down consistently. Any major issues? And what is your opinion on LTI-MINDtree merger? Can it be held as a coffee-can stock?
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I remember you had IT, diagnostics heavy portfolio… quality names in them…curious what strategy you followed in this crash as these sectors fell dramatically…have you devised any exit strategy or utilising the crash to add on to such sectors?
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The reason for Laurus sell out was largely due to risk overwhelming prospective return.
LTI i am holding and added at 4000 levels since my buy price is quite low. It seems a fairly valued company at current levels. How merger will pan out will know only in future but looking at tech capabilities it seems a good bolt-on.
Metropolis i sold out, lesson to not take competitive intensity too lightly. Holding on to IT names and added some more. Sold positions where risk -reward was not favourable looking at current volatile times. A lot of lessons in this downfall, will put out a detailed note on it. Sold quite a few position in Apr, unfortunately held on to some. Currently largely in cash, barring IT stocks + bought some bank + index+ nasdaq funds till i figure out some good entry point in watchlist stocks.
2 Likes
Update on portfolio : 25% Equity, 16% Fixed Income, 2% Gold and 57% Cash
Equity
- Arvind Fashion
- AGI Greenpac
- Hindware Home
- Meghmani Organics
- Equitas Holding
- Supriya
Watching IT and Pharma closely, seems at good valuation
Working on one technofunda strategy apart for fundamental stock pick, will update if it yields expected returns.
6 Likes
Amazing stock selection sir. i am a newbie investor and would love to have you review my portfolio.
This the link to my portfolio.
Hi Ishan,
Its very heartening to see you develop this interest while being a student, my advice might not be what you expected, but still i will suggest you what i will suggest myself of your age. Most critical at your age is to build skills which ensure you break the usual clutter and achieve more than average earning power, cashflows are the most critical component of wealth generation, i will always choose a 10% return on 10 Cr base vs 30% return on 3 Cr base because your chances of success is much higher in first case with much lower risk. So the most critical thing is to have sufficient capital base to generate meaningful return and to get there your job/business/hustles are primary source unless you have inherited wealth. Along side you should keep on trying various investment strategies, read more and more books and try to identify yourself, what works for you, what makes you sleep better while you are moving towards your goal. At this stage, do not limit yourself and try various things, you yourself will figure out what works best as per your nature and temperament. All the best !
12 Likes
Thank you so much sir. Your advice might not be what I expected but it is certainly what I needed. To keep my focus on the important things and keep my perspective clear of clutter.
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I am one of lucky and fortunate investor who is sitting on a all time high of portfolio even at this moment, though i will give some credit to my strategy as well:joy:
. My 50% of portfolio from Nov 2021 is in below stocks
- Aditya Birla Fashion
- Shoppers stop
- INOX leisure
4 Jubilant Ingrevia
5 Thomas cook - Tata Motors( sold recenlty at 470, bought at 67)
- Aditya Birla Capital
8 AGI Green
9 Varroc
10 Gulshan Poly - Arvind Fashion
Recently added large position(20% if my PF in Arvind Fashion), ABFRL, Arvind, INOX, Shoppers stop is 40% of my portfolio. These stocks have risen despite market volatility, never invested in IT sector as don’t understand much, avoided all hospitals as valuations were too euphoric. Just follow bottom up strategy and Contra investing which has help me grow my PF over 16 times since March2020, comparing from lowest gives more highs:joy:.
It was not all done just by holding or reshuffling, leverage is a big part here, I am leveraged by 40% at any moment till now and managed leverage successfully,
At last I will say one thing, there is no rule in markets, buy and hold doesn’t make money at all times, u need to look for returns, just an example, spotted opportunity in AGI and built huge positions at 200 average, stock raced to 400 recently.
4 Likes
Corrction, above is my current PF stocks
1 Like