Chaitanya's Portfolio

Portfolio.xlsx (5.2 KB)

Company Allocation Column 3
Kotak Mahindra Bank 17.76% Consistent performer available at reasonable price. Has long runway for growth. Strong subsidiaries.
Mahindra & Mahindra 15.92% Dominant launches. Absolute star performer in SUV segment.
Narayana Hrudayalaya 17.15% Healthcare provider with good track record and long runway for growth
Infosys 16.14% Largecap IT with high cashflows. Excellent track record with consitent dividend & Buybacks
Power Grid Corporation 17.22% Monopoly in power distribution + attractive dividend yield + reasonable growth
Natco Pharma 15.82% Unique business model with strong balance sheet. Company is diversifying in other areas and markerts.

Hi Everyone,

I have decided to finally start dabbling in stocks directly and keep my portfolio updated on quarterly basis. My investment rationale is influenced mostly by Chuck Akre & Terry Smith. For finding companies to invest in, I like Akre’s 3 legged stool approach of “Great businesses, talented management and high reinvestment rates.” and after finding company to invest in, I like Terry Smith’s approach of “Buy quality, Do not overpay, Do nothing.”

While these are easier things to say than to put in practice. I have made one personal rule of not putting less than 3% in single stock on cost basis and not diversify to more than 20 stocks. I will keep adding more capital and hence portfolio will keep diversifying but this is start of my portfolio which I have started in 2024.

Any suggestions or questions are welcome. And I would also like to thank @harsh.beria93 & @gurjota for their portfolio threads which have helped me immensely in finally finding courage to start investing as a retail investor.

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Congrats for starting your direct stocks journey! Seem to be solid businesses and you’ve good allocation to these name. Good start!

You may want to consider some names in consumption (not FMCG but sectors such as household appliances, tourism, etc) as I believe Indian household discretionary spending will increase over period of time.

Came across this fascinating video on this topic.

Btw, I happen to hold Kotak Bank with similar thesis on subs although now am not so sure of optionality of listing them separately as it seems to be merger seasons!

https://forum.valuepickr.com/t/kotak-mahindra-bank-low-cost-liability-banking-franchise/24914/65

The stock price of kotak mahindra has been in a consolidating phase for the past five years. I would like to know, if the company is a consistent performer why has it not reflected in the stock price.

I can think of few reasons -

  1. Private banks were trading at premium (P/B) and public sector banks were trading at discount and we can see now that PSBs have caught up and private banks P/B are fairly valued or undervalued. So, basically mean reversion has played out last few years.

  2. Specifically, for Kotak, there was uncertainty around succession plan of Uday Kotak which kept price range bound.

Now that 2. is no longer an overhang and value funds like PPFAS adding Kotak their portfolio am hoping price will catch up with business value.

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I am planning to add some names in consumption space in future as more capital becomes available to me. Also, that you for the video it was really fascinating deep dive in investment process of Mr.Maran.His investment approach resonated with me.

Also, regarding Kotak Bank, I think while they don’t de-merge various businesses, I still like Kotak Bank at its current valuation a lot more than its Pre- Covid valuations.

I think current price movement of Kotak Bank is similar to consolidation phase in ITC. Earnings growth without price movement increases margin of safety for me and also gives me more time to accumulate more quantity of the stock.

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Company Allocation Thesis
Infosys 12.66 Largecap IT with high cashflows. Excellent track record with consitent dividend & Buybacks
HCL Tech 11.79 Largecap IT with better track record than many of its peers. Consistent dividends as well as growth in teens.
M&M 8.58 Dominant launches. Absolute star performer in SUV segment.
KNR Construction 7.83 One of better managed companies in one of toughest sectors. Sectoral tailwinds and lower valuations as well as proven track record.
Axis Bank 7.57 Private bank with attractive valuations and growth.
Power Grid 7.43 Monopoly in power distribution + attractive dividend yield + reasonable growth
Natco Pharma 6.98 Unique business model with strong balance sheet. Company is diversifying in other areas and markerts.
Sharda Cropchem 6.68 Agrochem recovery play. Asset light model with debt free balance sheet.
Kotak Bank 6.47 Consistent performer available at reasonable price. Has long runway for growth. Strong subsidiaries.
Bajaj Finance 6.39 Consistent performer which got de-rated significantly which made entry possible.
PSP Projects 6.16 Excellent execution record. Valuation comfort because of recent headwinds.
Narayana Hrudayalaya 5.77 Healthcare provider with good track record and long runway for growth
PI Industries 5.68 Consistent performer which finally gave valuation comfort for entry.

Hi everyone,

Here is the quarterly portfolio update #1.

I have added some new companies to portfolio with some added insights.

There are two new added aspects of learning that I decided to add to the portfolio.

1. Mean Reversion

Added companies from beaten down sector such as Agro Chemicals with their margins reverting to long term average. I decided to buy companies on basis of their balance sheet as companies with less debt will be able to recover quickly than its peers. Added Sharda Cropchem and PI Industries with this theory in mind.

2. Basket Approach

In case of not being sure with which company to pick from any sector, buy multiple companies with small allocations to ride the tailwinds provided by sector. Added KNR Construction and PSP Projects from construction sector to allocate some investments in rising government spending in infrastructure sector.

  • No sell transaction during the quarter.

  • Increased holding in Infosys from previous post.

Rest of changes in allocation are based on market performance of the company.

Can you optimize your portfolio for minimum variance which most of the global fund managers do. That will have minimum standard deviation. Hence if correction or market fall happens it gives good resistance

Company Allocation Thesis
Infosys 11.01 Largecap IT with high cashflows. Excellent track record with consitent dividend & Buybacks
HCL Tech 10.59 Largecap IT with better track record than many of its peers. Consistent dividends as well as growth in teens.
Bajaj Finance 10.10 Consistent performer which got de-rated significantly which made entry possible.
Mahindra & Mahindra 6.75 Dominant launches. Absolute star performer in SUV segment.
Natco Pharma 6.14 Unique business model with strong balance sheet. Company is diversifying in other areas and markerts.
Sharda Cropchem 6.14 Agrochem recovery play. Asset light model with debt free balance sheet.
Power Grid 5.78 Monopoly in power distribution + attractive dividend yield + reasonable growth
KNR Construction 5.56 One of better managed companies in one of toughest sectors. Sectoral tailwinds and lower valuations as well as proven track record.
Axis Bank 5.37 Private bank with attractive valuations and growth.
Shriram Piston 5.19 Strong Auto Ancillary company with consistent performance.
PI Industries 5.04 Consistent performer which finally gave valuation comfort for entry.
Kotak Mahindra Bank 4.79 Consistent performer available at reasonable price. Has long runway for growth. Strong subsidiaries.
Nirlon 4.54 Rental real estate play with good dividend yield.
Ganesh Housing Corporation 4.45 Deleveraged Real estate company operating in huge growth market. Huge Landbank and rental income in upcoming IT SEZ provides cashflow visibility.
Narayana Hrudayalaya 4.31 Healthcare provider with good track record and long runway for growth
PSP Projects 4.24 Excellent execution record. Valuation comfort because of recent headwinds.
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Hi Everyone,

This is my quarterly portfolio update #2.

I have added allocation in Bajaj Finance after the results when it was falling continuously and I was comfortable with the entry price.

Also there are 3 new additions all of which are smallcaps with comfortable valuations.

  • Nirlon
  • Shriram Pistons & Rings
  • Ganesh Housing Corporation
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Company Allocation Thesis
HCL Tech 8.93 Largecap IT with better track record than many of its peers. Consistent dividends as well as growth in teens.
Infosys 8.80 Largecap IT with high cashflows. Excellent track record with consitent dividend & Buybacks
KNR Construction 8.01 One of better managed companies in one of toughest sectors. Sectoral tailwinds and lower valuations as well as proven track record.
Kotak Bank 7.43 Consistent performer available at reasonable price. Has long runway for growth. Strong subsidiaries.
Axis Bank 7.42 Private bank with attractive valuations and growth.
Bajaj Finance 7.20 Consistent performer which got de-rated significantly which made entry possible.
Sharda Cropchem 7.03 Agrochem recovery play. Asset light model with debt free balance sheet.
Ganesh Housing 5.40 Deleveraged Real estate company operating in huge growth market. Huge Landbank and rental income in upcoming IT SEZ provides cashflow visibility.
M&M 5.33 Dominant launches. Absolute star performer in SUV segment.
Natco Pharma 4.84 Unique business model with strong balance sheet. Company is diversifying in other areas and markerts.
Nirlon 4.33 Rental real estate play with good dividend yield.
Shriram Piston 4.14 Strong Auto Ancillary company with consistent performance.
Power Grid 4.03 Monopoly in power distribution + attractive dividend yield + reasonable growth
Interglobe Aviation 3.98 Aviation Juggernaut. Hard to beat company with economies of scale in their favour
Narayana Hrudayalaya 3.63 Healthcare provider with good track record and long runway for growth
Control Print 3.20 Consistent growth in teens + reasonable valuations + consistent dividend
PI Industries 3.19 Consistent performer which finally gave valuation comfort for entry.
Indraprastha Gas 3.12 Consistent growth + Dividend. Significant recent transition to CNG happening right now.
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Notes

  • Managed to have low turnover ratio of 3.43%.
  • Removed PSP Projects post news of Adani acquisition and added the capital to KNR Construction.
  • Reconsidering investments in Indraprastha Gas & Power Grid after Government’s decision making regarding gas distribution companies. Pondering on whether to stay in business with Government or remove them from portfolio despite tailwinds.
  • Recent launch of EVs by M&M has made me reconsider investments in Indraprastha Gas.
  • Learning about Pumped Hydro and its applications have made me reconsider Power Grid investment thesis.
  • Monitoring MFI situation and tracking if the pain can slip into lenders in my portfolio as well.

Many companies from watchlist have become attractive after recent correction in market. Will wait and watch before making any significant churn. Trying my level best to keep portfolio company number under 20. But will reconsider my options.

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