Anil's Portfolio

Q&A: Questions & Answers Portfolio Q&A
21

Hi Shankar,

Partly yes, have exited it mainly cz of the deal. Debt was there in their books and they were managing it okay types. Heard from some sources that the acquired entity is loss making currently. This put me off a bit. Also granules was not one of my high conviction bets. Saw better opportunity in the above new bets in which I entered recently.

Thanks

22

Aurobindo has become favourite of large no of brokerages since last 2 quarters. I think the co which is very old is realising its potential eversice the owner step aside n. day to management went into professionals hand 1-2 years back. The debt reduction is a very positive sign n stock is priced very cheaply @ 10 PE Fy 15.

Acrysil too is an interesting play with its increasing capacity, exports n Inndian market presence. Seems they have a monopoly on Granite sink with full pricing power. This segment is growing v fast . Any updates on their SS sinks n appliances div n promoters credibility n execution capability?

23

Hi Vivek,

Not much idea about promoters credibility as such…but seeing consistent dividend track record for past few years/recent bonus issue and c10% holding bySchock and Co adds quiet a bit of comfort for such a small company.

They have a showroom in Bangalore and I plan to visit soon. Will update if I get any reviews/update.

thanks

24

Hi,

This is how the portfolio looks currently. Any comments and suggestions would be very much appreciated.

P I Industries 21%
Kaveri 16%
Alembic 16%
Polymed 13%
Yes Bank 9%
Cera 6%
Shilpa 5%
Aurobindo 5%
rest among Indusind, Acrysil, Dhanuka & Symphony equally.
Booked out of Emami, ITC completely and sold some Yes bank after long thought and invested the proceeds to buy Polymed/Shilpa/Symphony.
Acrysi & Aurobindo have provided good returns in very short period, seems the entry in these stocks were timed to perfection. ( all cz of luck :-) ) I feel Aurobindo can be good buy if it falls to around 300-320 levels. I don't see any problem in it except for the debt.
Thinking to deploy additional cash in Poly/Shilpa/Symphony.
Started investing in June 2012 and the bets made in first 6-7 months were comparatively the worst ones/so called hit ratio was low. However, good thing was that in my initial days I made very small initial investment per stock so the % loss in specific stocks were less and bearable. This was not purposeful though as I just wanted to play it very safe, it turned out to be a real blessing in disguise (if I look back at them now). The performance has been also very satisfactory, higher than my expectation of 20-25% IRR.
Likes of Hitesh, Ayush, Donald deserves a special mention. They are doing a tremendous job of empowering and educating the public at large regarding stock markets and creating an environment of learning/sharing.
Wish all the readers a Very Happy and Successful New Year.
thanks
25

Hi all,

Sharing my updated portfolio for any suggestions and comments from fellow VPickrs

P I Industries Ltd 20%
Kaveri Seed Company Limited 19%
Alembic Pharmaceuticals Ltd 15%
Poly Medicure Ltd. 14%
Aurobindo Pharma Ltd 8%
Shilpa Medicare Ltd 7%
Cera Sanitaryware Ltd. 5%
Yes Bank Limited 3%
IndusInd Bank Limited 3%
Symphony Ltd 2%
rest in Acrysil, Mayur, Dhanuka & Paushak.
Added more of Shilpa/Aurobind/Poly/Piind/Kaveri in last few weeks as and when there was some correction.
Stated position in Mayur before the recent up. Not sure if its worth above 400 currently (unless the upcoming results next week are stellar) ..so did some trading as well in it.
Started position in Paushak as well, but its v v small..and don't plan to build on it as well (recent qtr results were disappointing)
Somewhat risky bet 3-4 months ago - Aurobindo - stands tall currently. It has paid off exceedingly well and I believe it still has quiet some way to go. Provided the invisible hand of US FDA doesn't play havoc for next 12-18 months. All this while, it was really funny and amusing to see the analyst group raising TP as the market price went higher and higher.
Confused a bit regarding Alembic..have been following it since almost 10 months now and invested from lower levels..seniors like Donald seem to have turned bit bullish after the management Q&A (which provides a lot of comfort) I see quiet a bit of execution risk regarding their US business..and valuations are just fine I believe currently (and not discounting any substantial take off in US business at these levels, that's my take..I can be wrong). If US business goes as per plan then the company will be in different orbit.
Any comments are more than welcome.
thanks
26

Hi Anil,
I like your holding in Kaveri Seeds. Kaveri is in an extraordinary growth phase. But Again Agri is a Low PE sector. **Even Market Share doesn’t help. For Example VST tillers has 55% market share and still sells at 8 PE ratio. I can never believe that it will get 20 PE for god’s sake. **

Seed market in india is expected to become 40000 crores by 2020. And Kaveri can reach 20-25% market share. So Kaveri and (Nuziveedu Seeds of NSL Group IPO coming up )

can grow at 30-35%. But What is interesting here is Beyond growth what can make these stocks Market favourites.

27

Nearly 44% in Pharma & 40% in agri sector. Concentration to these two sector is high. Though at present alongwith IT, these two sectors are the favourite for the market, you may not have problem. But once this favouritism fades away, it could turn into a concern.

28

Hi Manish,

Thanks for your views. Even I know that the portfolio is heavily tilted towards pharma and agri related stocks. Having said that, all these companies are in very good growth phase. Also, most of them find a place in VP’s A+ or A category of business.

I like stocks wherein the demand of co’s products reoccur every year or the life cycle of product is very small. (something like soap, oil, etc) Given then such business are available at very high PE (HUL, Gillette, etc), I chose to go with pharma and agri sector stocks which provide similar potential. In terms of favouritism, I think only the front line pharma and IT stocks are trading at relatively rich valuations. Among the ones in my portfolio - I think only Polymed is possibly bit ahead of valuations. CERA I just sold out after disappointing results, given not so good numbers in last 2 qtrs, CERA may also seem to be bit overvalued now.

Surya,

I completely agree with you on growth prospects for Kaveri or for that matter even Monsanto. There is a lot of scope. I am not too worried about PE and all, its something I dont think much and cant help it. If markets think a good/predictable business should get high PE, within few years the shift does happen.

thanks,

29

am not against the stocks in your portfolio, in fact your stock selection is excellent which is visible in your portfolio revamp in the last one year. I am only pointing towards the risk of high concentration to a particular sector. Hope you got my point.

30

Dear all,

Reproducing latest portfolio below, its very much in line with the VP list..excluding 2-3 stocks here and there.

Shilpa Medicare Ltd 15%
Kaveri Seed Company Limited 14%
P I Industries Ltd 14%
Poly Medicure Ltd. 13%
Alembic Pharmaceuticals Ltd 10%
Ajanta Pharma Ltd 8%
Aurobindo Pharma Ltd 7%
Mayur Uniquoters Limited 4%
Kitex Garments Limited 3%
WPIL Ltd 2%
Symphony Ltd 2%
Mps Ltd 2%
CCL Products (India) Limited 2%
Hester Biosciences Ltd 1%
Avanti Feeds Ltd 1%
Thomas Cook India Ltd 1%

Plan to increase allocation in Ajanta (bring it close to 10% level from 8% currently)
Kitex and MPS ran away quickly before I could increase allocation in those stocks.
CCL is the most recent entry - with good growth ahead for next 2-3 years, the stock looks attractive. Plan to increase allocation towards thomas cook and mayur as well.
Without going much into macro forecasting - I feel rupee might see further fall, so the plan is to keep portfolio export heavy.
Any comments/suggestions would be appreciated.
thanks,
1 Like
31

Anil,

Went through your entire PF thread. You had posted after a long time but wow you have been so prescient with so many of your choices. How do you do it? Do you read a lot or rely on select blogs like VP n what are the triggers your look for?

Congratulations on your fabulous performance n picks.

I also like your recent pick CCL products. Their venture into Vietnam post the govt invitation is a special milestone n them being the largest importer of coffee beans from Vitenam over last 15 years played a key role. This foray will result in improvement of ROCE from current 18-19% to 35 % over next 2-3 years n now is the important time to load it n ride it.

This improvement in ROce is the key trigger once any co crosses the threshold of 15% that’s the time to load it with long term POV. Indian dry cell battery mkt being a oligopoly is going thru the same phase after fading of Chinese competition. Look at Panasonic energy makers of novino n Panasonic brands who’s opp size is gradually increasing due to increased usage of remote control for TVs n ACs.

What else you like n also tell something about your self.

32

Hi Vivek,

Thanks, but all the credit go to the VP team (specially Hitesh).I do try and read a lot (stock specific) and keep myself updated with latest reports/news etc. In terms of being persistent - I just try and hold till the story remains intact, few quarters of under/over valuation should not matter I believe. Learnt to hold on to winners early when I sold Ajanta around 400-500 pre bonus with just 50% profits.

Will definitely look into dry cell market.

I like Eicher very much - just need to digest the valuations and have courage to buy sometime soon. Also, Poly med - feel its must for a long term portfolio.

I am in research field only, got into investing around 2.5 years back.

thanks,