I have been following valuepickr for long and have learned so much from the community. I would like to get feedback on my portfolio and investing hypothesis behind the companies.
I am 31 years old and have been in the market since I started doing my first job in 2014. Until 2 years back I used to invest via Mutual Funds but recently I have started doing my research and picking stocks. So far I have been able to get good returns but I want to make sure my Investing hypothesis is correct hence asking help from the community.
Here is what my stock portfolio looks like:
Stock
Profit %
Protfolio %
Anand Rathi
241%
47%
Zomato
138%
11%
NPST Ltd
51%
8%
Angel One
40%
7%
DP Abhushan
60%
13%
Dreamfolks Serices
-4%
4%
LT Foods
-3%
10%
*all holdings are less than 1.5 years
Anand Rathi
Wealth management is picking like crazy in India, as average per capita Income increases there will be more and more folks looking for wealth management services. Affluence Indian numbers have increased more than 20% YoY and is expected to grow at same rate
The company has delivered a compounded annual profit growth of 31% for the last 5 years.
Highly experienced and trustworthy management with 48% holding
Trading at PE of 77 which is the only thing I am worried about
Zomato
Zomato I feel is a turnaround story and with strong growth prospects. They have generated revenue growth of more than 70% for the last 5 years. I think they have the potential to grow at 30-40% CAGR for the next 3-5 years.
I do believe that the grocery delivery model will generate more revenue in 3 years than the food delivery business. I have a really close friend in Swiggy and the growth Swiggy and Zomato are going to deliver in the next 2-3 years will beat everyone’s expectations.
This is
a bull run stock and I plan to hold it as long as the bull run continues. Although PE is quite high
NPST Ltd
Their core expertise is to build tech solutions for fintechs and banks. Every bank is designing a strategy to increase their digital penetration and they don’t have the tech to build it on their own. That is where NPST comes in.
Digital payments growth is on steroids and NPST is well placed to take advantage of that. Well-experienced promoters and holding around 68% of the company
Czary growth in last 2 years, they are growing at around 100% for the last 2 years so I am okay with a current PE of 114.
Angel One
The number of folks entering markets is on an upswing and again with an increase in per capita income this is expected to increase. There is a potential for good secular growth for next 2-5 years.
EPS has grown at around 65% CAGR for the last 5 years with a PE of 21. There is a scope for PE expansion as well. With EPS growth and PE expansion, this can deliver good results.
Company market share from 10% in 2022 to 15% at end of 2024
DP Abhushan
This is based on “buy what you see”. I am from MP and DP Jewellers is the most trusted Jewellery brand in the region.
It has 8 operational stores as of now and planning to open 2-3 stores every year and enter Gujrat and Chhattisgarh
Has one of the highest footfall conversation ratio and repeat rate in the Industry.
Delivered an EPS growth of over 40% for the last 5 years and management guidance is also good. Its PE of 45 is high for a Jewellery business but as long as there is a bull run high PE should not be an issue.
Dreamfolks Services
This is a bet on the increasing affluent class in India and the growth of the aviation sector. India has placed highest orders of planes for 2024 in the world.
The company has a monopoly on the airport lounge business. It is also trying to enter railway lounge services which played well and can have a high growth potential.
EPS growth of more than 40% for the last 5 years and trading at a PE of 35. At this valuation looks a good buy
LT Foods
Trading at a PE of 12 which I feel is very low for a company growing at a rate of 25% every year.
Company I entering into the superfoods and ready-to-cook segment which can help the company grow.
The majority of revenue is coming from the Speciality Rice segment which is more of a crowded segment. So this is a concern
Nice Amoul ,Dreamfolks Services seems interesting to study… Could you provide more insight into it if you have gone through their concalls or annual reports?
I usually don’t listen to concalls, investor presentation provides most of the information I am looking for. Some of the highlights from investor presentation are:
Their revenue growth for 9M2023 is 49% but profit growth is 14.7 due to higher cost of services. I am still not sure why so
Company is investing in market expansion via entering into new segments (pathology, gits, luxury hotels etc) and new markets (Russia, Malaysia).
Anything specific you are looking for?
I’m trying to understand Dreamfolks Services’ business model. From what I’ve gathered by reading their overview on Screener, it seems they primarily act as an aggregator between shops and lounges at airports…Right?
Their primary business is to tie up airport services and bundle them together in a package, and partner with banks to offer these bundled services to bank customers. They are coming with their own card-based loyalty program as well.
Motilal Oswal Initiated coverage recently you can read more about it here: https://ftp.motilaloswal.com/emailer/Research/DREAMFOL-20240227-MOSL-IC-PG032.pdf
I have also gone through their concalls and AR, and I also googled it but could not find anything. I am not sure, but it seems they aren’t giving them anything, as they haven’t mentioned their names in their client list.
Lounges dont pay anything to DFS. DFS collects gross amount per passenger from the credit card companies or anyone else sponsoring the passenger, retain a small amount and pay the rest to the lounge.
Thanks, Subhadeep, but I feel that they are providing customers access to the lounge, so they have the right to charge an amount per pax or AMC for their services. Its quite surprising
Sold my entire holding of Anand Rathi. (sold price: 3868, made a good 200% gains)
With the election results and the new govt I am not confident about how well wealth management will grow in the short term.
It was already trading at PE of 70+ and I was thinking about moving to some other place for a few days
This will still be on my radar, might buy again if things go well in future.
Sold my entire holding of Dreamfolks. (sold price: 451, made a loss of 15%)
Dreamfolks will grow if no of airports and lounges will grow and with the new government now sure how much infra push will be there
Railway lounges which I was counting on might not grow at the rate which was expected with full BJP govt.
Also thinking of increasing my allocation in Angle One and NPST.
Angle One is trading at PE of 20 which I feel is a good bargain given its growing at a pace of 30%+
NPST is showing more than 100% YoY growth, which is expected to continue. This is also a kind of govt policy agnostic stock.
My hypothesis is that whoever forms the new govt it will have to focus more on social uplifting and consumer stocks will do well in the near term as compared to defence/infra stocks.
I have doubled down on Angel One and NPST. This is how the new allocation looks like.
Stock
Profit %
Protfolio %
NTSP
27%
31%
DP Abhushan
98%
21%
Angel One
18%
16%
LT Foods
17%
16%
Zomato
160%
15%
I have some cash to deploy but I am confused about whether to add more positions now. I have Dr. Agarwal Eye Hospital, Bajaj Finance and CDSL on my list. At this point, Bajaj Finance and CDSL look like a safe bet as I believe markets will be volatile for the next few months.
I have been trying to change my portfolio over the last month. Identified 3 new opportunities and increased the stake in some of the stocks bought before.
Here is the snapshot of the new allocation.
Stock
Profit %
Protfolio %
Zomato
82%
15%
NTSP
37%
21%
Angel One
9%
19%
DP Abhushan
95%
13%
LT Foods
29%
11%
TPCL Packaging
18%
5%
Creative Newtech
6%
4%
Bajaj Finance
0%
13%
New Additions:
TCPL Packaging and Creative Newtech are a part of the secondary portfolio (allocation <5%0 if they do good would invest more.
TCPL Packaging
Consistently growing at a CAGR of around 48% for the last 3 years, they have also increased their operating profit margin to around 17% from 14 in the last 3-4 years.
They have also successfully commissioned a new advanced offset printing line in Haridwar which should increase their top-line growth
Their client list is quite good and with the increase in consumer demand and per capita income the demand for packaged goods will increase. So looks like a good industry to be in.
Creating Newtech
The company’s profit is growing at a rate of more than 50% and is available at a PE of 21 which looks like a bargain.
Their sales were down 25% but margins were up 3X because of a change in product mix. Due to this stock has corrected from PE of 37 to around 22. Revenue should pick up again as they have partnered with Cyberpower in the brand licencing business which is a higher margin play. Also their Honeywell licencing partnership is growing well.
Bajaj Finance
This needs to introduction, Bajaj Finance has been through a consolidation cycle for more than 2 years and their PE is down to 30 which I felt is a great buy at this point.
Also increased my allocation in Zomato and Angel One. I had some cash, deployed more than 70% of it.
There are a few pre-screens that I have, here are a few things I look for
EPS should be More than 20
Top-line growth should be more than 25% for the last 3 years
Promotor should have skin in the game (good percentage of holding and this should be the only holding they have)
PE ratio: High PE is okay as long as PE < 2-time profit growth
The company should have a market cap between 300Cr to 30000 Cr
There are other indicators like asset turnover, OPM, and PB ratio which vary from industry to industry
Once I have a basic prescreen then do a business model evaluation. I typically like stocks from the consumer, banking and IT sectors which are more secular.
LT Foods has grown at around 30% for the last 3 years which is good considering the nature of the business. Even if they grow at 25% stock should do well considering it is trading at a low PE. If there is PE expansion it will be icing on the cake.
Thanks for the insightful comment. I am interested in LTFOODs and want to add, what could be the best time to enter? it’s already in a negative trend now. should I wait till it touches 240 ?
@Sanjay_Khan I usually don’t look at technicals and it’s difficult to say if it will touch 240 or not. It would be best to look at businesses that can grow at 25%+ over the next couple of years, share price should mimic the business growth. If you buy 5% here and there it will not matter in the long term.
If you are looking for short term gains now sure how will this play out.
