Arun's portfolio : Growth + Compounders

Hi ,
I have been investing for the last 6 years & i’m a silent reader in valuepickr for almost 4 years.I’m working in MNC & investing part-time . Most of my readings for indian market are from valuepickr
My portfolio is listed below

stock category percentage allocation investment rationale Risks
HDFC bank financials 10% consistent compounder, 20% growth YOY like clock work, low npa (historicaly), 50% of loan book is retail Covid impact on loan npa , credit card ban by RBI, tech outage
Manappuram finance 8% No:2 player in gold finance (zero npa in gold ) , valuations looks cheap MFI book is risky + banks & fintech players trying to have pie on gold finance
muthoot finance 8% No:1 player in gold finance (zero npa in gold ) banks & fintech players trying to have pie on gold finance
KPIT IT/ER&D 14% self driving & electrification of automobiles is the emerging industry . KPIT have tie up with some of the big car brands in europe for ADAS, powertrain etc. only other listed firm in india is tata elxsi solutions have to be at par with Tesla, Google waymo for ADAS
intellect design(recent entry) IT/BFSI 10% One of the few IT product companies listed in India . Saas + AMC (recurring revenue with not much expense) is already at 40% of revenue. IGCB & IGTB is in monetization phase. ISEEC is yet to win big deals. As intelect wins more deals , operating leverage will kick in & eps will grow very quickly . management guided for 10% revenue growth & 30% eps growth for next 2-3 years (my estimates are even higher). Global peers are trading at much higher valuations operating leverage will kick in only if they are able to win more deals . Licensing revenue means revenue growth is lumpy
Mastek (recent entry) IT 4% Digital transformation + cloud . Acqusition of evosys ( oracle cloud player) helps in cross selling. Management is honest & transparent. ??
Borosil (SIP) consumer durable 7% honest management . Growing opalware business + growing consumer durables business . Looking for 15-20% CAGR Covid impact & lockdown on business
V guard consumer durable 7% growing electical/ electrical business. Entry into new business segments in consumer durables every year (water heater, cooktop, air cooler etc ) . Expecting 15-20% cagr high competition
granules (recent entry after correction) 4% bulk drug manufacturer. Trying to have formulations which should improve margins going looking for 20% revenue & PAT growth . PE looks cheap compared to growth projections raw material price increase on bulk drugs
US portfolio
Alpahabet 15% search +youtube + hardware+ playstore is contributing to the earnings now. 3rd biggest player in cloud & growing fast (40% almost) but now running at a loss. Google Cloud should turn profitable in a few years.Lot of unmonetized assets like WAYMO ( self driving) , google maps , android , fitbit acquisition. Leading player in AI (Deep mind) ??
salesforce 7% No :1 cloud CRM player . Plans to grow revenue by 100% by 2025. cheaper compared to other cloud players in P/S ratio because of nearterm impact on earnings due to slack acquisition Lots of acquistions by salesforce which is a major risk
wisdom tree cloud etf ( recent entry) 6% cloud is the growing segment in IT valuations are very high

please give your views & suggestions .


Hi Arun, Thank you for sharing. I am also in the same boat. Just a quick question, how do you invest in the US Stock Markets?

Thank You,
Karan Khanna

Hi Karan , You can start a trading account through ameritrade or etrade for investing in US.
I’m investing through etrade as i also have a corporate account with them (for RSU).

Groww also started US stock trading , if my information is correct.

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Quarterly result update:
Mastek :

• 40 new clients in Q1FY22 . Total client count was 651 (LTM) as compared to 639 (LTM) in Q4FY21.
• 12 month order backlog was Rs 1,177.7 crore ($158.4mn) as on 30th June, 2021 as compared to Rs 1,130.4 crore ($154.6mn) in Q4FY21 (constant currency growth 2.1% Q-o-Q & 45.5% Y-o-Y)
• Net Cash balance is Rs 702.9 crore as on 30th June, 2021 as compared to Rs 588.6 crore on 31st March, 2021
• 510 headcount added during the quarter (net of attrition)

Disclosure: Added more (1%) on day after result at 2520 range . 5% of my pf (avg price 2219)


Q1FY22 USD Revenue grows 18.3% YoY & 4.3% QoQ.
PAT growth 150 % YoY & 14% QoQ.
employee count increased from 6564 to 6806 YoY (proxy for growth in service IT company)
Guidance : mid teens revenue growth & 16.5% - 17% ebitda margin which is significantly higher than 14.3% & 15.7% margins in Q2,Q3 FY21… which means PAT should grow by at least 25-30% in next 2 quarters YoY.
Growth across business segments:

Disclosure: Trimmed 35% of my allocation to KPIT in last quarter. 9% of my pf . Avg price 78.


revenue up by 18% YoY, EBITDA up by 48% YoY , Net Profit up by 73% YoY
License Revenue up by 32% YoY, AMC Revenue up by 8% YoY, SaaS revenue up by 102% YoY.
AMC + SaaS at ~40% of revenue (revenue recurring every year without much work)
10 Digital led wins including 5 large Digital Transformation deal wins.
Revenue: Mid-high teens revenue growth
Earnings : 25-30% growth trajectory
Ebitda Margin : 25 to 30%

Disclosure : 12% of PF . avg price : 742

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Exited KPIT completely as valuation seems stretched around 650 during January end(was exiting partially from 240 onwards. (looking back exiting KPIT at 240 onwards was a mistake . i was early … but gradual sell off as well as gradual buys help me average out the fluctuations & help me capture the upside to some extent . 50% of my stake was sold in january at 650 when i thought valuation was stretched much beyond i was comfortable).

Adding money to intellect design but very slowly as it crossed my 10% limit . Max portfolio allocation limit is 15% & intellect is inching slowly towards that. So buying only during significant corrections like that seen in early march .

Started positions in US facing etfs:
Motilal oswal nasdaq100 : 8%
US equity has corrected more than india & is now comparatively reasonably valued .Will add more if there is more correction.

Started positions in FB around $220
I feel FB is cheap even with IOS headwinds .
FB Positives :
** Buybacks have accelerated & they will be buying back at these cheap valuations.*
** FB has a FCF of $40 billion even with heavy spending on metaverse & virtual reality & apple headwinds.*
** Whatsapp monetization not yet started (they can easily convert it into super app + payment gateway + ecommerce etc)*
** Instagram is the most popular social media website for millenials & GenZ…*
** Fb is morphing into a ecommerce site (similar to craigslist) with facebook market place & FB groups .*
** optionality with metaverse & VR/AR ecosystem*

cash position : 20% of net worth ( My networth is fully in equity + cash + RSU from company i work… very bold … keeping significant portion in cash to prevent from being going bankrupt :slight_smile: )
(waiting for correction on nasdaq otherwise will keep in cash as buffer).