Anand's portfolio - One for the long term

Hello All,

I have been following stock markets closely for the past 9-10 months since I had a lot of free time during my second year at B-school. As I was intrigued by stock markets, I started to research more on companies so that after getting into a job I can do SIP in my portfolio. VP was a suggestion from my professor and I have been addicted to this forum for the past several months. It has been one of the greatest value addition to me personally and I owe a lot to the community for guiding me in the right direction. I wish I can repay the debt some day! I was lucky to have @basumallick visit my school for a guest lecture and going by his suggestion (which made perfect sense to me), I am planning to do a SIP wherein I will allocate 25% to the portfolio below, 25% in a multi-cap MF (according to my risk profile) and 50% into debt instruments (mostly RDs). If I am unable to beat MF returns I will increase weights to the MF part of my portfolio and make my personal portfolio more concentrated. And if I am able to beat MF returns I will assign more weight to my portfolio.

Since the joining date for my new job has been pushed because of obvious reasons, I started deploying some idle cash (from a LIC policy) as market crash provided a good opportunity to enter. I don’t wish to take out the invested amount anytime in the next 10 years and I will only revisit the stocks quarterly, unless there are any adverse changes to the company or management. My SIP will continue in the below portfolio for the next 10 years. My current portfolio is as below:

Company Allocation
1 Avanti Feeds 4.17%
2 Bandhan Bank 4.83%
3 HDFC Bank 7.32%
4 Hero Motocorp 6.98%
5 IDFC First 4.94%
6 Infosys 2.30%
7 ITC 15.93%
8 Kotak Mahindra Bank 4.82%
9 Manappuram Fin 4.51%
10 Reliance Industries 9.34%
11 Rites 2.75%
12 SBI Cards 12.51%
13 Cash 15.79%

Watchlist – Caplin Point labs, Cupid ltd

Investment Rationale

ITC – Emerging non-cigarette FMCG player with zero debt and reduced focus on low ROCE hotels business. Excellent supply chain and a multitude of household brands in the portfolio. Hope is that the Cigarettes will continue contribute to the EBIT over the next few years and shield the FMCG from any drastic market impact. Most of the Capex in the FMCG business is complete and FMCG is ready to contribute to the operational profits. Very good dividend yields as per the new announcement.

RIL – Bet on telecom and fast-growing retail business. On track to reduce debt levels but refining margins might be impacted in the short term due to reduced oil prices. Have faith in management quality and hoping to see more market share in the telecom space. Contribution of retail and Telecom to EBIT is rising and increase in tariff will further solidify the business

SBI Cards – Was lucky to get a few lots during the IPO. However, in hindsight it looks like bad timing and don’t expect to turn black in the next couple of quarters. Only listed player in the cards space with a good handle of NIM and NPAs. Would be interesting to see how the story unfolds in the next couple of years. As per my understanding, the future looks bright but the stock should survive the next couple of quarters without being De-rated. Will reassess the weight for this particular stock after Q3 results

HDFC and Kotak Mahindra Bank – Couldn’t choose the better of the two as I personally like the management of both Mr Uday Kotak and Mr Aditya Puri. Broke FDs to invest in these two along with ITC during the recent fall. Top quality banks with diversified loan books and retail loan quality of both banks are simply the best in the industry

Manappuram Fin . – Asset based financing with a good margin of safety. With gold prices in uptrend, the overall book size is bound to increase. Also, because of job losses and economic slowdown, this is one company that will benefit. Low expense ratio and a decent dividend yield makes it an even more attractive investment

IDFC First – More of a bet on jockey than the company itself. This is one company, along with Bandhan, I have spent days researching and understanding the overall story. It has been disappointing that results every quarter are impacted by one issue or the other from the corporate book. Honestly feel that Dr. Lal handed over a shitty corporate loan book to VV. I am cautiously optimistic that there are no more skeletons in the cupboard and the bank is well poised to show incremental profits from the next quarter or so. I really buy VV’s retailization story but if the performance doesn’t improve by December quarter, I am ready to book losses.

Bandhan Bank – Another favourite stock of mine that went through a bloodbath in the last couple of weeks. I am sure the NPA scene will look bad but the bank is versatile enough to bounce back. Stock lost its track after Assam issue was overblown by media. But I strongly believe the MFI story is here to stay and Bandhan has already been a pioneer. Expecting Gruh integration and Promoter issues to be resolved without much of a hassle. Now that it is available at a comfortable level, looking to deploy more in the stock after quarterly results

Infosys – No introductions needed. Top notch management quality and one of the most ethical companies. Proven track record of innovation and has been consistently winning good number of projects. Not expecting the stock to grow at more than 10% CAGR but needed it to provide crucial diversification to my portfolio

Rites – Asset light consulting arm with regular order inflows from a government company and increasing number of turnkey projects may contribute more to the top line. Increasing number of export orders in the pipeline and good visibility of revenue for the next few quarters are additional valid rationale

Avanti feeds – Entered late in the stock but still I see good growth prospects especially in export market. Needless to say it will be affected by Corona but given the track record and zero debt levels, I am optimistic that company will grow at a decent click. It has been expanding organically over the past few years and has been a consistent compounder over the last few years. Recent diversification into shrimp processing is growing phenomenally well and I hope to see more contribution from this segment going forward.

Apart from these, I have a detailed document for each of these businesses.

I started to deploy my cash from March first week and as of today my portfolio is down 8.2% . Need inputs from seniors like @hitesh2710 @rajanprabu @Donald in the community. Other senior VP members too please feel free to point out your suggestions. TIA


I think investing in financials at this current scenario might not be prudent. You have a high weightage to financials like our index. As a rule, better to stay away from PSU companies. What we need at this point is a defensive portfolio. In my opinion, you should look to slowly over a period of time add more consumer oriented large-cap companies like Pidilite, Nestle, HUL etc. Also breaking FD might have been pre-mature in my opinion. I also have been guilty of buying early in the FOMO but markets give many chances to enter if one is patient enough.

How will Manappuram benefit from job losses and slowdown? People who have existing loans will not be able to pay back and new loan growth also will be down. Of-course they have the physical asset but any economic slowdown is not beneficial to anyone. If you assume Gold prices will increase a lot, so new loan amount will increase - This thinking is also not true since people will be risk-averse and new economic activity will not happen in such a scenario.

My few thoughts, if you are starting to build portfolio recently, I like to wait and keep the cash in hand and do the Monthly SIP like 10% of cash each month for at least 6 to 8 months. ITC, Avanti stock prices fall started before Corona virus situation so was doubtful for long term investing. Financial stock has more allocation.

Thank you @bhaskarjain for your feedback! I will definitely look into reducing financials in my portfolio. I am studying more about consumer companies and sure I will start to include a couple of them if I find them attractive. I will try and reduce the weight of financials to <30% in the next few months.

And coming to my thoughts on Manappuram, if the customers cannot repay the entire loan back, I think they will repay the interest component and try to extend the loan by probably another 6 months. In this way there is no considerable de-growth to the business. But I will revisit my thesis after the quarterly results for sure.

Hi @getsach, I will address the excess allocation to finance. I am unable to understand the reason for your suggestion of not deploying cash for the next few months?

I am not very much experience with the stock selection and allocation. I am keeping cash with logic that it’s a first waive of correction and we can not expect stock to turn around and go up. Next few weeks we might see the recovery, which already started now. Actual economical data and impact will get release in next few quarter, which will correct/consolidate market before going for complete recovery. All these might take next 6-8 months.

Will get multiple chance to enter market and choose/adjust if cash available.

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Quarterly update:

The recent nifty run gave me a chance to exit some of the weak stocks in my portfolio. Modification in the portfolio is in line with the above feedback of reducing exposure to financial sector stocks especially ones that have unsecured lending as a primary business. Therefore I have exited SBI cards and Bandhan Bank at loss. I started looking at chemical stocks and have made some investments for short term(IOLCP) and medium terms(Shivalik Rasayan and Vinati). Jagran Prakashan also looks interesting and from the initial study, it clearly looks like a decent medium-term bet. I have started nibbling in the last month and let us see how the story unfolds.


SBI Cards and Bandhan Bank - Unsecure nature of lending which can bring in negative surprises in the next 6 months. I may re-enter the stock later if I feel there is enough margin of safety. Lesson learned is to not invest in businesses that have similar risks because it completely wipes out the benefits of diversification

New additions

Vinati - Felt like a good pick for a coffee can kind of a portfolio. Consistent compounder in the chemical space for the last decade with very good execution skills. Interesting new product offerings on cards for the next couple of years. Although valuation is slightly on the expensive side, I believe the business will grow at 15-18% over the next five years. Will look to add more at comfortable valuations

Shivalik Rasayan - Interesting small-cap having a great management team with good future prospects for its business. Have to wait and see how the API story unfolds

POLYCAB India Ltd - Looks very interesting for the long term as the company is just taking baby steps in FMEG segment. Concalls are very clean and management keeps a clear long term focus on the business. Will continue to buy in dips.

Transpek Industries - Conservative management with long term focus. Long term contracts with world-class clients. Product and client concentration still remains a risk but at current valuations looks like a decent long term bet. I will add on once the uncertainty regarding Vizag plant clears out.

I definitely missed the Pharma bus in the last three months mainly because I did not study any of the businesses prior to this bull run. I have to study diverse set of companies in the future so that when opportunity knocks the door I can grab it with both hands. Also, friends, please suggest some interesting sectors/companies/themes for me to study.

Going forward, I wanted to keep the portfolio as churn-free as possible with 15-18% return YOY. I will only be studying businesses that will exist and thrive in the next 5-10 years. I feel that valuations of financial stocks might drop in the next 6 months to saner levels. I don’t mind increasing the allocation of existing stocks in my portfolio when I feel valuations are cheap.

“The first rule of compounding is to never interrupt unnecessarily” - Munger

S No Holding Allocation Purchase price CMP Gains/Losses
Cash 8.23%
1 IDFC First Bank 2.77% 30.21 26.90 -10.95%
2 ITC Ltd 15.63% 158.61 197.75 24.68%
3 Rites 5.80% 241.09 248.70 3.15%
4 Reliance 10.64% 1,071.79 1,938.70 80.88%
5 HDFCBANK 8.62% 887.41 1,083.55 22.10%
6 KOTAK BANK 3.66% 1,105.56 1,333.80 20.64%
7 MANAPPURAM 17.12% 116.50 158.00 35.62%
8 JAGRAN 2.40% 42.01 40.30 -4.06%
9 Shivalik Rasayan 4.00% 285.81 364.55 27.55%
10 Transpek Industries 4.65% 1,712.92 1,539.45 -10.13%
12 HERO Motocorp 7.38% 1,743.89 2,688.00 54.14%
13 VINATI organics 3.01% 882.22 998.00 13.12%
14 Medicamen Biotech 4.07% 288.83 336.95 16.66%
15 POLYCAB 2.02% 791.15 820.00 3.65%

Good PF…I have 50% same portfolio as u…like the high wtage to stocks like reliance and mannapuram

Note to self: Another amazing business model for future reference.

Have you deployed any fresh capital or holding 8% cash allocation currently?

Hey, I increased my allocation to ~5% in Polycab at 1350 range and have taken a 3% position in RACL Geartech at around 220. Cash position is around 2%. I have Borosil Renewables, Syngene, and WonderLa on my watchlist. Looking for good entry points.