ValuePickr Forum

Chins' Portfolio - Two Parts

I have a few weeks off, and due to the incessant rain, I’ve been indoors expanding my circle of competence. This week’s readings were on understanding NBFCs better, and dismantling every aspect of the EV future in India. Avendus has a brilliant deep dive on EVs which explains the interplay between policy, industry, and technology in every single part of an electric vehicle. I’ll write a longer post after I’ve studied every single company in the space; it’s still early days in this theme.

On the portfolio front, I’ve divided my cash position into 24 parts and my strategy is to SIP every month for the next two years. I pick up more of the stock that’s closest to the support line, but try to spread it out in a way that makes sense. Should there be an opportunity at really attractive valuations, I invest a much larger tranche, as seen in Jubilant Ingrevia. At the end of a year the allocations will align.

Some transactions from this quarter:

  • Picked up a tranche of CreditAccess Grameen at 600 levels, almost a 20% discount from my first entry. Sent AU Small Finance Bank to the family portfolio.

  • Started an SIP into IDFC First Bank.

  • Bought two tranches of SIS, trading at really attractive valuations and the chart looks like the formation of a cup/handle pattern from the first week of April (The rest of the chart is disgusting). Happy for this money to be locked in for a long time should things not work out.

  • Hindustan Foods being range bound for the last few months has been wonderful, allowing its 200DMA to catch up a little to current prices. Usually rallies just before results, I’m hoping to pick some more up.

  • Birlasoft broke out of its 52W high with huge volumes. There’s no reason to exit in a hurry, I’ll only replace if there’s a better company in the space. I’m yet to fully study the IT sector.

  • With Trent, the goal is to evaluate the business again once we have details about Nykaa’s reported IPO. That’s a company in the space that I’ve been eyeing for a long time, but can’t say anything without concrete details regarding valuations, etc.


With the smallcaps, I was wrong in my post from early May. After playing it defensive, I watched KMC Speciality and BCL Industries double. No regrets though :slight_smile:

I’ve cheated a little. RPSG Ventures should technically be in my main portfolio, but I’ve decided to follow my rule of tracking the smallcaps over an extended period of time before bringing them into the core portfolio. With Ugro, I was discussing the idea with a friend who works in a VC, and this coincided with the discussion here at Valuepickr.

  • Instead of allocating 10% to each company, I’ve decided to raise the allocations in both Ugro and RPSG to reflect conviction.

  • I’ve withdrawn my initial capital from Mangalam Organic, Digispice and GRM Overseas. It’s astounding that GRM still hasn’t crossed the 1000Cr. mark despite running up 24 times since March 2020 lows.

  • The goal with all of these companies (except for RPSG and Ugro) is to continue to take initial capital off the table, giving me a long tail of essentially free smallcaps. If I hadn’t sold KMC and BCL, there would be two more in this list, but lesson learnt.

Some company highlights this quarter:

Tata Power


I’m surprised that there isn’t a Tata Power thread on this forum, but I haven’t seen any mentions of people following the earnings calls, so I’ll post my own notes from this quarter. The simplest investment thesis to Tata Power is seen by looking at their revenue breakup. A few years ago, they decided to move away from coal power generation, and focus their strategy towards scaling up their renewables, transmission and distribution businesses and making them more effective. At the same time, they’re trying to bring down debt and turn the company around.


Concall Notes
  • Through acquisitions in Odissa, they’ve gone from 2.6million customers in FY20 to 12million customers in FY21 and have a target to triple the current revenues in Odissa by FY25.

  • Renewables grew from 88Cr. to 175Cr. this year. Focus on solar EPC, rooftops and pumps. Tata Power Solar revenues grew from 2144Cr. to 5119Cr. this year.

  • Solar EPC orderbook of 2294 Cr. in Q421, total orderbook of 8742 Cr.

  • Rooftop revenue grew to 300Cr, orderbook of 600Cr.

  • Solar roof digital campaign → 5Cr. impressions and 41,000 leads → 43 Cr. order value.

  • Solar pumps: 6500 pumps this quarter, 13000 pumps in FY21.

  • Capacity doubled for solar cell/module manufacturing in Bangalore.

  • Reduced debt by 7500Cr by divestment / fund raise. Still planning to get rid of coal mines in Indonesia, other countries.

  • Interest cost down to 7.4% from 8.3% last year.

  • Debt/Equity down to 1.4 from 2.0 last year.

  • EV charging points at all important railways in Mumbai. 175 charging stations this quarter. Total 456 chargers for 4W, 80 ultra high capacity bus chargers in Mumbai / Ahmedabad.


The utilities/distribution framework will become a pillar of the EV adoption in the country. Most transformers can’t handle the additional load that EV chargers (and home chargers) bring, and will need to be upgraded/separate transformers will have to be installed.

A discussion on transmission/utilities would be remiss without mentioning the Adani group, but the following articles convinced me of giving them a miss regardless of the returns.


Jubilant Ingrevia

I’ve written about my concerns regarding the Jubilant group’s approach to regulations in its thread. I have no doubts about the company’s ability to scale up over the years, but I’m going to have trouble sleeping at night knowing there’s a regulatory sword hanging over its head.

The option that makes the most sense to me is to slowly book profits in a way to take my initial capital off the table. This way the regulatory risks will only affect the profits, and I can then happily sit on the company for years. I’m still waiting for the earnings meeting and the annual report.


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As a side note, I’ve created an imaginary wealth destruction portfolio, where one can (unscientifically) measure market fervor/froth by seeing how much they run up over time.

Suggestions welcome for the worst investments(or historic wealth destroyers) you can think of, that you would recommend absolutely everyone to avoid. :slight_smile:

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Hi @Chins , Thanks for sharing this. i have a question related to tracking the support levels on Google finance.
Have you automated the 200 DMA in your google sheet ? If yes, then how did you do it ?
Thanks.

Hi @AlokMoghe.

I try to automate everything I can on Google finance.

The code for the 200DMA is:

=average(query(sort(GoogleFinance(“NSE:” & A13,“close”, today()-300, today()),1,0),“select Col2 limit 200”))

where I keep the NSE codes in my A column, in this case A13. An example with Infosys, replacing the A13 is:

=average(query(sort(GoogleFinance(“NSE:” & “INFY”,“close”, today()-300, today()),1,0),“select Col2 limit 200”))

Sometimes the NSE codes return an error, or you may be looking for a company listed on the BSE. In this case, you can just add the six digit BSE code directly. For GRM Overseas,

=average(query(sort(GoogleFinance(“531449”,“close”, today()-300, today()),1,0),“select Col2 limit 200”))

It’s based on this post at stack overflow. Please note that this calculates the simple moving average, while the support lines on Screener.in are exponential moving averages.

Once you have the moving averages, you can use the current price to calculate how much higher / lower it is to the support line, and I use conditional formatting to make it easy to eyeball.

There’s a whole host of attributes that google finance automatically parses, including daily volumes, P/E multiples, etc. You can read more here:

https://support.google.com/docs/answer/3093281?hl=en-GB

Edit: Here are the daily volumes compared to the 50 day average for my portfolio:

If you’d like the full sheets template, I can send it to you via DM :slight_smile:

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Since I’ve got a few messages, here’s the portfolio format on sheets. Have fun playing around with it. I’ll update some of the ratios that need to be entered manually at some point.

If the first sheet is too heavy, I usually hide most of the columns. The second sheet is a quick condensed view of the data. If you need to use it, the simplest way is to select all cells and copy. It’ll then allow you to paste it in your own sheet.

Most online portfolio trackers offer the same functionality. I like editing and formatting the data to my own preferences, hence the sheet.

Edit: The risk ratio you see is very primitive. It’s simply a backward looking ratio of 1 year returns / volatility, showing you how much risk you’ve taken on for the returns generated. The SSGR formula has been entered into Screener which then spits it out for my companies. It has its own caveats.

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I wanted to highlight two pieces here on VP that really resonated with me this month.

These are wonderful posts on valuations, wealth creation through re-ratings, and conviction during periods of underperformance. It made me think of past exits due to headwinds, and understand the pitfalls in my portfolio better.

I hope the SIP method is clear from this. Even if the current price is far higher than the daily moving averages, the overall buy average will be very close to the support lines. The next tranches will be of Tata Power, Trent and CreditAccess Grameen towards the middle of the month.

Jubilant Ingrevia has been a really difficult stock to part with, but I used the run up today to withdraw my initial capital. I’m sure there will be a lot more value unlocking as the results, annual report and AGM shed light on the business, but now I’m happy to watch on without fear. Once I have clarity on the environmental clearances in 2022 and the effect of the NGT orders, perhaps I’ll add more then. Good ESG metrics are important to me, and a company that’s high on the wishlist at the moment is Vinati Organics.

I’ve put the Ingrevia allocation into GPIL which was down almost 5% yesterday. The wonderful thread here covers the investment thesis.


The most expensive holding in my portfolio is Hindustan Foods, but my initial tranches were bought when it was inline with its historic multiples, and reasonable compared to Varun Beverages. Navin Fluorine is expensive due to a tax rebate they got in March 2020, which got discarded from the TTM calculations after this quarter’s results. I regret not buying IDFC First closer to book value at the start of the year. This said, I like valuing a company by comparing the market cap by the opportunity size, and that offers me some comfort in Hindustan Foods but everyday I wish it were cheaper.

What I haven’t mentioned in this thread is how I’ve been splitting strategies with my family on sectors we like. My mom has been accumulating ITC, IOLCP, Galaxy Surfactants, Borosil Renewables and Vaibhav Global among others. Perhaps I’ll ask her to share her experience in the markets here on VP as some of her holdings are from the 1990s, and include some tragedies such as Opto Circuits and Photoquip. I’ve also subscribed to the Quantamental smallcase, and will invest after opening up an account with a new broker.


It’s annoying me that the wealth destruction portfolio is creating wealth. This looks like a smallcap market that will generate returns in the short term even if you invest blindly, and that’s making me uneasy.

To end May on a positive note, we’ve sold most of our GRM Overseas holdings. The investment thesis was purely an undervaluation play, and in six months it has gone up almost ten times from the first tranche. A share of the profits have gone towards much needed renovations at my mom’s house, and a part of it to covid relief and charity. The small remaining holdings will be kept for the bonus. :slight_smile:

At the same time, I’m baffled and see it as nothing but luck. I’d never have imagined six months ago that across all the holdings, this would be the company the market chose to reward.

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@Chins Tata Power Solar receives EPC orders for Rs. 686 crore from NTPC to set up Solar PV projects.

it is consolidating in last 1 month. Hope to see next leg of rally.

Disc - Invested

@sdc20, thanks for highlighting the recent order win. A few things to note:

  • This is a fairly large capacity order, after the 320MW plant which is to be commissioned in Q2FY23, and the 250MW plant at Ayana.

  • This is due to be commissioned after the other NTPC win and the GSECL projects.

They’ve completed one year in Odisha, and I quite like the media releases given on the company’s website. They were prepared for the cyclone and restored power quickly.

I also came across this news regarding their orders at Dholera. The first release they gave was a win for 100MW and 50MW, but in the most recent presentation, this has changed to a 250MW project and a 50MW project. I’m looking to confirm the right capacity.

Regarding the stock price, the run up to the 52 week high coincided with the largest volumes Tata Power has ever seen. I’m still trying to find out which fund bought out such high quantities in March. I’m not sure if the order book alone is going to aid a rally. Expecting a further clean up of their books through the divestments that were planned for later this year, along with their (IPO?) plans to substitute the debt reducing INVIT deal that fell through.

The longer it consolidates, the more time I have to add :slight_smile:

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Hey Chin,

Is the tata power thesis centered on the renewables portfolio completely akin to what happened in Adani Green or is there a fundamental change that they are doing

I don’t understand the comparison. Adani’s businesses have grown through tremendous amounts of debt, allegedly illicit transactions and favourable policy outcomes (although the last one holds for almost any industrialist in the country at some period in time).

Here are two articles which highlight this:

Both are great reads, and the second one highlights the trail of the alleged fraud which ends in companies owned by the Adani family, based in Mauritius. Mauritius is a recurring theme, with four foreign investors being registered to the same address. Here are the holdings for one of them, and it’s suspect that they don’t hold any other listed companies:

Their website http://www.untrin.com/ is equally shady and doesn’t look anything like a fund holding a stake worth 33,000 crores.

In terms of valuations, how many years of growth has the market priced in?

Company P/E Price to Sales P/B Debt/Equity
Adani Enterprises 158 4.31 9.91 0.89
Adani Total Gas 360 102 89 0.24
Adani Green 967 65 92.4 10.8
Adani Transmission 140 17.2 19.2 2.89
Tata Power 24.5 1.06 1.55 1.42

I’d also like to leave this wonderful comment made by Hitesh sir in 2013:


Tata Power is trading at reasonable valuations; they’ve gradually ramped up the various offerings classified as renewables, and walked the talk of moving away from coal power and dealing with transmission and distribution. The investment thesis is not just the renewables portfolio, but also the increased efficiency in the utilities business (seen by the 25 year contracts across the Odisha DISCOMs and reduction in AT&C losses post takeover).

A secondary long run thesis revolves around charging technology, and Tata Power could be a dark horse in this regard. I want to point out that this has many IFs and cannot be the main reason one invests in the company. There is already a case for upgrading existing distribution systems in India due to high losses of 16-22% compared to the global average of ~2-5%. A report on the charging infrastructure highlighted how varying levels of EV adoption via home charging would put a higher amount of stress on the local grid. Tata Power has already worked on this through chargers in Mumbai, and are uniquely placed to take advantage of the ecosystem given their exposure to Tata Motors and the grid.

I don’t want to push the last paragraph as the primary investment thesis but rather an afterthought, given how early/forward looking it is. The risks are whether they’re able to continuously bring down the debt/equity (already down significantly from last year), what the Odisha picture looks like after a year of operations, whether they’re able to succesfully divest the legacy business, whether Mundra will continue to bleed, and whether they lose key contracts to the Adani group.

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Hey @Chins . I’m a huge fan of the Indepth manner you look at companies especially since you just began last year if Im not mistaken. Kudos. Your posts on ingrevia really made me question my thesis with all the companies I own regards how much we don’t know about the companies we own. That being said I wouldn’t write off ingrevia because of that…
Corporates have a list of priorities and are always prioritising their bottomline. Uptil now the Nira plant issues would have been on their list of low priority since they knew they were getting away with it. With the environmental clearance coming up in August 2022 I’m sure it will automatically go up their checklist and before we know it there’ll be an increased expense of a few crores in their balance sheet one quarter and the issues at nira plant will disappear.
Also, considering they’ve only recently demergered and a whole set of investors are now looking at their plants in detail these nira issues won’t be able to stay hidden for long and if they conduct Concalls I’m sure we ll learn a lot more over the next 4 quarters before the EC is due. Nira will hopefully finally take priority for them since there is a real chance now that it can hit their bottomline and ironically the same reason which caused them to ignore it will cause them to fix it.
If they were a small microcap under an unknown name I would run away but that isn’t the case here.
If one feels that these issues will get sorted but hates the company due to social injustice and environmental protection then that’s understandable and a full exit is warranted but tbh it’s just the ugly truth with most companies. Nestle is one of the most hated companies in the world, amazon has always been known for treating its labor badly… Yet these issues haven’t stopped them from remaining the darlings of investors.
Basically, I don’t agree with what ingrevia is doing… Its very cavalier and unjust too… But I wouldnt be suprised if they address it now that they are under the scrutiny of investors and the EC deadline and I’m banking on it being a non issue in a few quarters. Anyway I’ve mailed the CS and eagerly awaiting the Concall to see if the company is doing anything regards it. Hopefully we get clarity soon

Disc: one of the lucky investors at its lowest point ie 241.5 and hoping I never have to let go.

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Thanks for the kind words, @Malkd. I did start last year to help make decisions to preserve the family portfolio, but I found that the market united my love for public policy and good ideas, and is also a way to express oneself, through conviction of the effects of a particular policy / business model. Valuepickr and portfolio threads like yours have gone a long way towards making me a better investor. My mom used to read Capital Markets, and wishes she had tools like Tijori / Screener in her early days. I don’t mind making mistakes and being wrong, but I’d rather be wrong after reading in depth rather than through laziness/negligence.

You’ve been right when I’ve expressed concerns before, and I’m sure you’re going to be right about Ingrevia.

I agree, and was having this conversation with my parents. Reliance is responsible for creating a lot of the single use plastic we use. Nestlé has been riddled with controversies since the 90s, from alleged child labour in their supply chain, to the horrifying story of baby milk powder in the African continent. I wouldn’t bet against either of them.

The problem I have with Ingrevia is that this looks to be a culture of we don’t care. Nira had the chemical leak around April 19th 2019, and was shut down following this. I read through all the exchange filings between March 1st 2019 and June 1st 2019 to see what the company’s response was. Guess what? They didn’t disclose the chemical leak, plant closure, or any comments on preventing this from happening again. To me, this is the nightmare. The plant is so far away from us that we trust them to disclose developments as we would with a pharma company, and I don’t trust them. (They also received an OAI at the same time, but that’s Pharmova’s problem) Compare the response Shilpa Medicare gave after their OAI with the lack of disclosures made by the Jubilant group. Even in the concalls following the leak, there was not a single mention, and I don’t know why the analysts present on the call chose not to take it up.

With Gajraula, the report from the government board is equally damning. They drew groundwater without permission and its now classified as over-exploited. If you read through the various breaches listed in the report, they’re numerous and across the entire plant. (I highlighted how they don’t have any fire safety measures where they’re storing hazardous waste in the thread)

They’ll throw money at the NGT, and it’ll go away for a few years, but these are cultural issues which would be deeply problematic if they were dealing with any other governmental structure but ours. With covid, we’ve also forgotten how bad pollution was in Delhi. If pollution in China and subsequent plant closures lead to huge global tailwinds in various industries, why should we be lax about the very real possibility of our own industries being crippled by similar policies? (Especially if we’re going to see a large capex cycle in the next few years with infra + steel + chemicals…)

Here’s a really nice read on how carbon pricing is changing in Europe and would place incentives on industries to import from greener sources:


My first tranche of Ingrevia was at 260, and the difference between our holdings was the allocation. I allocated heavily for the same reasons you did, that we’re unlikely to see these prices again. This made Ingrevia my largest holding at 15%. The position size knowing the regulatory concerns was the reason for unease. Wouldn’t it be the same from your side if Ingrevia was as much of your portfolio as Laurus Labs / Deepak Nitrite? There’s a world of difference between the investment thesis / quality between these two and Ingrevia. I’ve brought down the position to ~5% now, and that’ll slowly reduce with my SIP.

As I said before, you’re certainly going to be right to continue holding. It’s likely that the stock will run up significantly, and even if the plant gets shut down, perhaps the correction in the stock in 2022 will still leave it higher than current prices. I just don’t like feeling uneasy and can’t trust the management on this front. :slight_smile:

I had a chat with Harsh, and he pointed out that if we prioritised ESG metrics above all others, we’d have a stock universe of maybe 20 companies.

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I did bet big but not relative to Laurus/Deepak… I doubt il ever have the confidence to do what I did with them again with any pharma/Chemical company.
After the recent run up its now at 9 percent of my portfolio which is still relatively large compared to most other pfs I’ve seen and considering I have all my networth in equity it is a huge amount too but I get your point. That being said I would still tend to agree with Harsh.
The reason we buy at an MOS is to take care of these unknowns and at the prices we paid we definitely have an MOS at low single digit PEs.

In this situation you have brilliantly found something that would remain an unknown and hasn’t been picked up by even institutional investors and ironically your finding has increased my conviction even more since there is a clear monitarable to track now.

There will be a point when this issue comes to light and ingrevia has to deal with it… But considering the valuations of other spec Chem companies ie even 40 times(and we don’t know what the unknowns are there) I’m even happier I got ingrevia early and can now track this known unknown thanks to you. Would I add more at these levels or higher until the issue is resolved? No.
But il gladly attend the next 4 Concalls and see how the management handles this situation. We haven’t even heard from them once as the newly listed entity and neither have we heard from the institutional investors.

So I totally agree with you… You are a 100 percent right regards the company. But giving them a chance to correct this mistake at what could be a once in a lifetime entry price into a spec Chem company could make sense too.

Note: I dint realise you still had 5 percent in it and planned on holding :). I thought you’d given up totally and felt I had to atleast make you see another perspective of it after you helped me dissect ugro when my conviction was wavering (which has broken its 52 week high today :)). I also understand the sense of uneasiness holding a concentrated portfolio. At the end of the day whatever helps you sleep well at night is the right answer. Cheers.

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Congrats on your bets on Laurus and Deepak :slight_smile: My first tranche of Deepak was at the 600 levels, and my mom was first to Laurus at around 230. In hindsight, I could have invested large allocations then, but two things prevented me from doing so. I was new to equities when Deepak was at those levels, and I lacked the experience to bet big. Over time, I got comfortable as the tranches grew larger. The second reason was that a significant portion of our net worth was already in the family portfolio, and we decided to keep my savings liquid / in FDs given the uncertainty surrounding the pandemic. My SIP takes care of this now as I move my net worth into equities over 2-3 years.

Should there be something like a Taleb black swan event again, I can accelerate the SIP and invest big, but I’m not counting on it, and learning to trust my conviction when the opportunity presents itself (SIS and Ugro recently).

Edit: If the valuations for an IPO like this one makes sense, I’d buy my lifetime’s allocation at one go:

I’m on the same page as you, and that’s why we’re both investors in Ingrevia :slight_smile: . My mom bought the company too(and loads of Ugro), and we decided that she would continue holding while I booked some profits to hedge against regulatory risk.

That said, the advice she keeps repeating is that the market will always award an opportunity to enter for unpredictable reasons. In 2019, she bought more infosys when it fell 16% on accounts of some whistleblower claims which were cleared up 6 months later. She accumulated Mindtree last October after it fell 10% following weak Q2 results. In this regard, Valuepickr has expanded my universe to a great degree, and I’m following many companies that I hope to fit into the portfolio in the future.

As I write this, I realise Navin Fluorine is trading at similar valuations to Vinati, and I’ll investigate if switching makes any sense.

I’m actually comfortable with concentrated holdings despite what my portfolio looks like, and I’ve seen how allocations change over time through splits and bonuses. I’ve linked to a post earlier written by Harsh where he analyses how an equal weighted portfolio could lead to a disproportionate outcome over the years, and I’m hoping that’s what happens with mine. As long as my hit rate is fine, and I assemble a set of companies at the right valuations, I’ve done my part and can leave the rest to the market. I would never have guessed that Birlasoft would return more than Ingrevia this month, and I’m hoping that I can accumulate more SIS at these levels.

The point of this forum is that we can collaboratively arrive at an investment thesis, and you added much value to the Ugro discussion. Thank you for writing here regarding Ingrevia :slight_smile:

On price action, I noticed that Ingrevia picks up high volumes close to the end of the day, and I attribute that to foreign investors buying.

Here’s the same observation from early May:

On Ugro, it’s also displaying a golden crossover as the 50DMA has coincided with the 200DMA. This happened for one day in April, but the 50 day average has been below the 200 day average since 2019. The other level that’s important is today’s high of 159.75, which coincides with the levels seen just before the fall due to covid in March 2020:

I think we got in at the right time :slight_smile:

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@sdc20, new measures taken by the government in the power space:

Lots of proposed changes to the way DISCOMs get their power supply. The full draft is available in the article.

@nagesh_reddy, Digispice has rebranded Spice Telecom into a marketing automation company called https://www.koreroplatforms.com/. A lot of it is identical to their old CPaaS business, except they claim to now have 350+ customers across 11 countries. They say it’s sector agnostic, but they aim to provide marketing automation to the BFSI sector.

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I used to ignore IPOs that didn’t interest me, but I’ve realised that they cast a huge spotlight on listed peers and can’t be ignored if one is to exploit valuation gaps. This forum brought the gap between Jubilant Ingrevia and Laxmi Organics to light, and imagine my surprise when the same opportunity was presented between Godawari Power and Shyam Metallics (and Sarda Energy too) just as I had sold a majority of my Ingrevia shares.

I broke my rule of buying close to the 200DMA as it was down almost 5% on the 1st of June, and was very close to its support line. Some fund must have become interested at the same time, as the volumes this week are the highest in seen five years, and it subsequently rallied almost 60%.

The other update is that I’ve added substantially to my position in SIS, it’s trading close to the cheapest it’s ever been. Will write a long form post on the full thesis and horizon, as well as post updates on the SIS thread concerning the latest annual report and old concerns regarding un-audited subsidiaries / high receivables.

Finally, I’ve added one tranche of RPPL to my smallcap portfolio, and wanted to thank @Tar and @sahil_vi for their discovery and detailed exposition. Learnt a lot from their threads, especially the insights into Strides and Saregama.


For clarity, the top 10 holdings in the family portfolio are as follows:

Company Weightage
BAJAJ-AUTO 4.74%
BEL 5.76%
GRASIM 13.72%
ICICIBANK 4.68%
INFY 12.71%
LT 11.54%
RELIANCE 10.97%
TCS 23.31%
TATACONSUM 4.94%
ULTRACEMCO 7.64%

This should explain why you don’t see large / mega caps in my portfolio. The goal with this one is purely of capital protection, and a lot of @Investor_No_1’s writings resonate with the rationale behind the portfolio. All dividends obtained from these companies go into a separate midcap portfolio which comprises some of the names I’ve spoken about in the thread, and we’re restructuring a part of the holdings such as BEL and slowly replacing it with ITC/HDFC Bank.


Going forward, I’m not going to have much time for the market. I’m just going to keep my head down, continue the SIP, and keep reading in order to have my top wishlist for the next big re-jig.

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I wanna know your principle from exit of any stock

Hard to give an answer to such a broad question, or box oneself in with a rigid principle.

The general idea is that I restrict myself to 15 companies. If I have a new idea, I only replace an existing company if valuations and forward multiples offer a better risk adjusted opportunity than existing holdings. Aside from this, exit decisions are based on individual circumstances. The portfolio is largely unchanged from the first post in this thread, and I’ve explained each exit higher up in the thread.

For the benefit of anyone at this forum searching for information on Birlasoft, I’m sharing my notes on the Q4FY21 concall:

  • 888 million dollars in deal wins.
  • 50% renewals, 50% new deals, 95% of deals from existing clients!
  • Pruning tail accounts that are not strategic, pursuing higher value deals. Seen in lower $1 mil deal wins, increased $5 mil deal wins.
  • Key metric used by management is Days Sales Outstanding. Improved from 72 days to 56 days.
  • Cash in hand of 1000Cr.
  • Attrition rate down from 19% to 11.6% (how much of this is pandemic job security related?)
  • Key focus is on PaaS, cloud adoption (Microsoft/Oracle) and automation.
  • Big structural shift - deals are now multi service deals rather than single service, so we will cross sell and can’t say a deal belongs to one vertical.
  • Don’t want to go acquire something through M&A for the sake of growth. Very bullish on organic growth.

Niraj Shah is a treasure. He’s always on the ball, well prepared, and makes any interview much richer with really smart questions.

On a quick side note, Mr. Kapoor is a genius; he’s taken a picture of his living room clean and neat, and then used it as a virtual background on Zoom. Now he doesn’t have to worry about tidying it up before a call. 10/10 trick.

The first ten minutes are a rehash of the latest quarter’s results. Here are the interesting takeaways from the remaining twenty:

  • On work from home trends: made provisions and budgeted for travel costs. Will not affect bottomline. Careful and positive about keeping talent, seen in low attrition rate.
  • Mine the clients, cross sell and the deal sizes grew larger and larger.
  • Goal is to carve a niche in our verticals where we are better than the big players. We can’t solve every problem, but what we choose to solve, we can do much better than anyone else.
  • When we acquired KPIT, used to think 75 million dollar deal wins were a great target for a quarter. Today, 200 million dollars should be the average every quarter.
  • By 2025, we want to have 7500 Cr. of revenues (3500 Cr. today, implies 18% CAGR). We will do this by:
    • Grow top 30 accounts by > 20%;
    • Platform strategy: partnership with Azure / AWS to offer solutions across the value chain;
    • New channel for sales; good partnerships already in place.

Q) What are you doing differently for your clients to drop existing providers for you? Are you lowering pricing?

  • Quality of service is the most important thing for us. Then, we make sure we offer the right solution to the problem. Only then do we look at pricing, but we don’t lose pricing power. If our solution is good, clients would be willing to pay a premium.

Q) So what will your margins look like to achieve this billion dollar target of yours? Will margins be better or worse?

  • Expecting profit CAGR to be much higher than revenue CAGR in the next 4 years. Profitability will grow. 3-4 quarters ago, this target of billion dollars was a dream. 2 quarters ago it became aspirational. Today, I’m far more optimisting and it’s looking like it can be a reality.

  • Absolutely no doubt that Mr. Kapoor and other top management will continue to work at Birlasoft until this goal is met. They’re motivated, excited, and handsomely incentivised to stay. We have our plans set in place for the next 3/4 years.

  • We want 20% of this billion dollar goal to come from inorganic acquisitions, but we aren’t going to do it for the sake of it. We aren’t a big company that can afford 10-15 failed ventures. Interested in a larger acquisition rather than a small distressed one. Company should add a lot of value to Birlasoft and vice versa. Will wait for the right candidate to come along.


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Thanks for the details…what a stellar run this small and now midcap IT firm had from 2020 lows!! Small/midcap IT run has been as and in many cases more ferocious than the pharma bull seen… individual companies in many other sectors have done well but when we talk about full sector, small/midcap IT has been more ferocious than pharma…but we keep hearing more about pharma everywhere…I think that’s good…lesser noise in IT is better…I missed birlasoft although just before the crash I noticed aggressive hiring of top talents at multiple levels!! A cue that I should have picked…as the company was prepared with right talent to meet the sector demand changes…

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