Bala Portfolio

ranzaan greeting to all

vivek,

latest pf stands like this

kaveri 36, accelya 18, unichem 11, repco 11, hawkins 11, indus 8, gruh 5

i have trimmed hawkins after q1 results , i have sold the tail and added repco, indus

i had around 39 in hawkins and unichem, i wanted to reduce the turn around stories and allocate more to growth stocks like kaveri, repco. i will try to trim unichem and add to repco. new money will go to page and hawkins (after q2). i am still bullish on hawkins due to lower expectations and their launching new products before diwali. at around 1600, there would be very small downside risk and huge upside potential.

overall my plan is to reduce turn around stocks and rely on growth stocks due to general market scenario (with existing rupee issues, general elections around the corner). protecting downside is very important in next 1 year, thats why my preference to stocks like kaveri, page, repco, gruh, accelya

Hi bala,
Congrats on the good performance of your portfolio.Seeing that the domestic situation is not likely to improve over the subsequent quarters you can look to have some more exposure to export oriented stocks.Maheshji has come up with a lot of positives for PI Industries,so that can be a good bet.Lupin has started correcting so you can look at that.Alembic P. has come up with excellent nos. & is availaible pretty cheap.
You seem to have decent exposure to Financials.I believe you can take the pharma side of your portfolio up a notch.
Cheers.

Bala,

Not much activity by you on this thread for long.

Your pick Accelya has turned out to be a scorching hit with price hovering around 640 after giving a dividend of 70 Rs per share.

What’s your take on it n other stocks you like at CMP?

hi vivek,

current pf includes kaveri, accelya, unichem, hawkins, page, repco, gruh. i plan to hold on to accelya, the feedback from agm is positive and the story is in tact.

my plan is to have more of the stocks that dont move with the market. i would like my stocks to move on their own based on the earnings (as much as possible). this is very important becuase of impending elections and other macros. with this in mind, i have recently looked at some of the stocks discussed here

pi ind : great business with more focus on csm. with 30-35% cagr in csm and 20% cagr in agri segment, i am tempted to add this. but one concern i have is dependance on monsoon. i already have kaveri, so one bad monsoon i dont want 2 stocks to be effected. even though csm may compensate for agri bizness, market will definitely correct based on the monsoon. even kaveri will be effected to some extent. one more concenrn i have is great bizness may not translate to great stock price. the overhang of agri sector will weigh on valuations.

vmart : focus on tier2, tier3 fashion apparel bizness. expanding fast with internal funds. but market always looks at same store growth, even if company keeps on new stores. because of tough bizness conditions in retailing, i am staying away from it

alembic pharma : i was very close to buying this last week. i was checking if it can replace (fully or partly) unichem. the valuations for unichem is attractive even with recent runup (11.5 pe), if you have 3-5 years view this is a better opportunity with multile growth drivers. growing international bizness (likely to get some crams contracts in fy15), focus on improving margins (mgmt guiding to go back to 26% from existing 19%) with internal restructuring. UK is in net profits, likely to improve bottom line, US is adding new produccts (many pending anda approvals), lot of hope on this, brazil will take more time. concern is about the mgmt execution skills. alembic on the other hand, is at much better position in the value chain, their intl bizness is growing at 30-35% and the domestic bizness at 20%. more focus on speciality bizness in domestic segment is improving margins. their intl bizness is showing lot of traction. only concern is relative valuation is high compared to unichem

avanti : frankly , didnt dive in much. stayed away becuase of my percieved risks of the bizness (virus, cyclones, anti dumping duty). even for short term opportunity looks risky (i know i could be wrong).

also i will be looking at cyclicals and economy turnaround stocks like L&T, Cummins, but this is atleast 1-2 qtr away

and then there are so many great stocks like ajanta, astral, mayur.

if alembic corrects, i may add it my portfolio. if market goes up a lot in next few months i may book some profits in hawkins, gruh, repco, page and be ready for the cyclicals

That was really interesting…have not seen anybody speak of L&T for long

Thanks Bala . Excellent choices n reasoning.

You have fine temperament n will be very successful in stock market.

Keep up the good work

updated portfolio as on date

kaveri 28

hawkins, repco, accelya 15 each

shilpa 12

gruh 9

astral 5

recent activities : sold some kaveri. completely sold unichem and converted to shilpa. added astral

target portfolio in 1 year : repco 20, shilpa 20, hawkins 15, kaveri 15, accelya 10, astral 10, gruh 7

watch list (will buy on declines and correction) : page, symphony, mayur, pi, polymed

The picks are very decent.

How has been the pf performance ?

Whats the take on n trigger behind Shilpa? Hawkins any triggers?

vivek,

the cagr performance over 12 months has been around 44 , ihave converted my MF pf to equity pf exactly 1 year back and it was a tough decision forme but timely one. even though i visited TED 3 years back, i didnt take it seriously and continued with MF. but my MF returns over prev 3 years were flat.

some of themistakes i did last 1 year

1). sold page too quickly with’hope’ of getting it lower which never materialized. later on i attended its agm, but ihavent bought itback due to price anchoring

2.some2 months back decided to convert unichem to shilpa, but execution was very bad. at that timeunichem was around 160, shilpa175. finally i sold unichem at 180, bought shilpa at 260

3.started tracking repco from ipo levels, never bought it, it kept ongoing up. finally bought at 210 and 290 with average price 250

4). waiting for correction to happen which never did and all my watch list stocksgoing up and up (some 50% up). i was sitting on cash and also LAS money to use. ‘more money is lost waiting for correction thanin the correction itself’ – PL

overall i am satisfied with my progress as investor thanks to this forum and the investorfriends i made due tothis forum

some key monitorables for me for next 1 year

1). if you like the idea, buy straightaway, atleast take 50% position

2). dont sell winning stocks (like page).

3). do in-depth research to build more conviction. high conviction erases priceanchoring to large extent

the ket take away for me (last 1 year) has been theself-belief that i can do better than most mutual funds that i was investingtill 1 year back.more than the cagr part, i am happy with the way i progressed as investor so far (lot to improve though)

Greta to know us simple folks outperforming reputed MFs thanks to collaborative wisdom being sprouted here.Thanks VP Donald & other prolific contributors.

I too earned a piffling CAGR of 3-5% in diff MF schemes like FT,L&T(earl Fidelity),etc & finally converted them in 1 go in Ajanta Pharma on 1 October 2013@ 525 after reading the management Q& A posted on VP.Good decision as Now Ajanta is touching 1000.

One more lesson I learnt is to forget price anchoring & take the plunge.AS somehow did not enter Ajanta@ 60-100 2 years back finally entered @ 525 n missing totally the ride in between.

updated portfolio as on date

repco 22

kaveri, hawkins, shilpa, accelya 15 each

pi ind, gruh 8 each

page 4

recent activities : sold lot of kaveri before and after split, q3 results. completely sold astral after q3 results. added repco at 310 after q3. added page this week (finally !!!)

target portfolio in 1 year : repco 20, shilpa 20, hawkins 10, kaveri 15, accelya 10,pi 10, gruh 5, page 10

watch list (will buy on declines and correction) : page, ajanta, mayur, pi, polymed

@ bala

A quality stocks. and very well managed.

Hi Bala,

Between Shilpa And Ajanta, doesn’t it make much more sense to have Ajanta when Ajanta is trading at approx 17x FY14E whereas Shilpa is 18-19x FY14E.The valuation don’t differ much, but Ajanta has shown much more consistency & growth than Shilpa in results.

Having said that, lucrative Oncology API can help Shilpa improve margins & profits whereas Ajanta margins are already at higher level. But that is a situation with lots of ifs & buts !

Disc: Invested in both, higher allocation to Ajanta

Great Portfolio n strategy Bala.

FY14E.The

hi utkarsh, i have a huge price anchoring, so stopped tracking ajainta after seeing it at much lower levels. regarding shilpa, the idea is what it can do in next 2-3 years rather than what it has done recently. once their formulations plant gets USFDA approval, its easy for them to sell (they already have API plants) through crams and direct selling. there are several drugs going off-patent in next 3 years, with their excellent R&D (50% net profits on R&D) their API busness and formulation business can have blockbustor future. fy16 is the key. there are not many companies having both API andformulations plants in oncology space.

in general i am a sucker to ‘potential’/‘right-now-going-through-bad-phase’ companies than consistent growers. thats why i prefered hawkins over page, unichem over alembic, shilpa over ajanta. you need some patience for this startegy to work, i lost patience on unichem and sold, i will give another 2 qtr for hawkins. shilpa anyway is doing well even now, so no issues.

Hi Gautam,

A well laid equity strategy always beats Market. Valuepickr is doing a very good job in picking undiscovered stocks.

A good way to think about price anchoring is “market embraces growth.” Buying prices should be little flexible with high growth stocks, and little tight with low growth stocks. You should be cautious about buying prices in case of large-caps in general, cyclicals in general, and any low-growth stock. Be it discovered or un-discovered. Should be cautious in case of undervalued asset plays. But a high growth stock has some kind of elasticity which continues to run even after higher prices.