ValuePickr Forum

Bimalb Portfolio

I am sharing my portfolio which was build over the last 1 year or so. I hope to do fairly well without taking much of risk wrt valuation.

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My 10% bets are opportunistic and on valuation. These bets are on constant churn.

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Your view and reviews are welcome.

Disc - This post is for learning process only. I am not an SEBI registered analyst hence this post shouldnt be considered as recommendation.

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Posting my views on each company here.

Longevity is what Guy Spier finds common in CARE and CERA.

The pf looks heavily concentrated on banking/ financials/ Insurance. This may adversely impact returns. However if you have deep knowledge of the sector, and have high risk appetite then you may have an edge. Intriguing to see despite concentration on banking/ financials, there’s no HDFC bank. Any particular reason? Professor Bakshi shared his presentation on a similar subject, which is worth going through. It can be accessed here https://fundooprofessor.wordpress.com/2019/10/13/non-ergodicity/ . There’s is also a very nice thread on capital allocation frame work, which you might want to go through. Towards a Capital Allocation Framework!

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HDFC bank was my core portfolio stock for last 10 years along with Bajaj Finance, which worked handsomely. I still hold some shares in HDFC bank but nothing meaningful. Exited Bajaj Finance completely recently as I was not comfortable with the valuation. I have taken bet on Bandhan Bank for next decade instead of HDFC bank. In my opinion, Bandhan bank has scope to expand to urban and semi urban quite rapidly with the growth coming from rural. Everyone talks about Bandhan being a rural bank but if you see they have opened branch in cities like Pune, Mumbai etc. It would be interesting to see how they can compete in already crowded space in urban cities. I have full faith in management of Bandhan.

Financial sector can scale with time and with expanding economy. Thats why I have my portfolio skewed towards financials. Though this time I have spread my exposure in 4-5 names due to asset quality issues.

I have read Sanjay Bakshi presentation and respect his analogy regarding asset allocation and risk associated with concentrated portfolio. Concentrated portfolio has rewarded me handsomely till now and I dont want to change it.

Regarding capital allocation, I am still learning. BTW, i want to know who that Mr. D is which Donald talks about a lot.

Would had been better with 10-15 max total no of stocks . Diversification is good but excess is not good.
Lacks sector leaders except bandhan Sobha. Retail should always have sector leaders.
Hdfc bank Bajaj finance can be trimmed but sold off completed may be a mistake.
Care and Max interesting bet.
Pf lacks focus I.e. trying to bet on every sector like MF. Sorry to be critical but it’s my view and I have right to go wrong.
Discloser. I have hdfc bank Bajaj finance Bandhan Trent in pf

Everything is right or wrong in hindsight and you might be right on every point but lets see how this portfolio works out in next few years.

I tried to avoid recency bias towards high flying highly valued stocks. Many sectors like pharma, banking, housing finance, real estate, retail has a large opportunity size and can absorb many players. I have invested in stocks which has corrected due to some issue or the other where I think these companies will be able to come back strongly.

There are many ways to skin the cat. Its okay if someone doesnt have HDFC bank and Bajaj finance in their portfolio and may still do very well.

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Different opinion makes a market and we have the right to differ . Wish All the best my Friend

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Very good result by Solara Active

ok set of results from Nippon India AMC

@bimalb sir why did you leave ICICI Lombard for investment and chose cholamandalam financial holding to play the insurance?

On what parameter do you conclude that it is cheaper than rest?

ICICI Lombard is the dominant player, isn’t it gonna have benefit in the long run?

If any other members are tracking this space plz share your views :pray:

Management has said that they will leverage NBFC customers to increase their insurance business which I think they have good scope to do that. I dont know whether it will work or not but given that management is highly rated, we need to see how they scale their insurance business in next few years.

ICICI lombard looks super expensive on whatever parameter you like to compare and its market leadership justifies the valuation that’s what market thinks. I am more comfortable with Chola holding than ICICI Lombard.

Annual report has many points which looks interesting.You might get few of ur points cleared by going through this. https://www.bseindia.com/bseplus/annualreport/504973/5049730319.pdf

Cholamandalam Financial holdings ltd is has no coverage at all. I can only find one by JM financial where they compared it with Bajaj Finserv.

Investment rationale by the brokerage-
Provides a broader exposure to financials, similar to Bajaj Finserv: CFH is not just a pure lender. It has a more diversified play in the financial space as it offers exposure to both a consumer NBFC and general insurance. We believe CFH is a wealth creation candidate (similar to Bajaj Finserv) as both its businesses have attained a good scale (CIFC is the third largest asset finance company (AFC) in India and Chola MS is the seventh largest private general insurer) in underpenetrated and fast-growing verticals, both have championed their respective retail-oriented businesses, and there is tremendous scope to further increase scale and better the operations of these businesses.

Cholamandalam MS General Insurance - Efficient player in a highly lucrative general insurance industry: Indian general insurance has posted an 18 per cent CAGR in premiums during FY14-18, and outlook remains better as the industry is still significantly under-penetrated, urbanisation is rising and significant increase in asset ownership is expected. Moreover, given the low solvency and high underwriting losses of state-owned insurers who collectively have over a 50 per cent mark share, we expect a structural shift towards stronger private players. Cholamandalam MS GIC with a strong JV partner, credible management, and controlled combined ratio will be a prime beneficiary. After a subdued FY19E due to investment losses (IL&FS Bonds) and higher claims in crop insurance, we build in GWDP / PAT CAGR of 15 per cent / 35 per cent during FY19E-21E, driven by growth recovery due to rationalisation of commission expense, shift in business mix away from Motor TPs, better claims ratio and normalisation in investment return. Capital infusion by both the partners is a possibility given that the solvency ratio is just above the minimum mandatory requirement.

Read more at:
//economictimes.indiatimes.com/articleshow/68885224.cms?from=mdr&utm_source=contentofinterest&utm_medium=text&utm_campaign=cppst

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Surya Roshni Ltd bags Rs. 123 crore order for 3LPE COATED API LINE
PIPES FROM ONGC.

I have exited Tata metaliks, GHCL, Shemaroo, Gateway Distriparks, JBM auto and JMC projects.

Added NCC and Zee entertainment.

NCC - Govt plans to spend 1 Trillon dollars on infra. Stock trading at 5.5 PE with 2.5 dividend yeild. Caters to most sectors.

Zee entertainment - Largest listed media company beaten down due to promoter pledge. Hopefully management change would turn the sentiments.

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Hello,
Could you share your reasons for exiting Shemaroo.

Thanks

I exited to enter Zee entertainment which also has OTT and valuation has corrected a lot. I will wait for the promoter overhang to get cleared which I think would eventually be done as lenders might exit and sell most of the promoter stake which is pledged to recover dues.

I also dont like shemaroo management entering into food business which is already very competitive. OTT and content business in itself is so huge where many players had made it very large in the world. Somehow management wants to enter in some business where they will have competition from even unorganised sector.

Instead of leveraging the content in digital stream they are using it to make Ishqiya Aloo Paratha.
https://www.zomato.com/mumbai/mukka-by-shemaroo-marol/order

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Mixed set of results from Max financials.

Hello Bimlab,
The shareholding of retail shareholders has increased substantially and fii+dii decreased in last three quarters. Doesn’t that mean we are betting against the big guys and with the novices.

I have no idea. After new govt cancelled their orders the stock is beaten down. We can’t buy or sell based on institutions actions anyway bcos we don’t know their investment style. For now it seems like this stock has been thrown away with no future and I would like to see how it works once the capex cycle turns.