Hello forum members, this is the first time I would be posting something here, I have been reading topics on this forum for the past one year or so and have been on my investing journey since 2020 and this forum has added immense value to my investing knowledge so I would like to seek all of yours feedback on my portfolio, I have been building this pf for the past 2 years and the present climate I believe is conducive to adding more. I have included both my thesis and anti-thesis for the stocks in as short as possible.
| Instrument | Allocation % | Thesis | Anti-thesis |
|---|---|---|---|
| ITC | 9.98 | Complete dominance in cigarattes, with huge pricing power maintaining profitability even with declining cigarette volumes, good revenue growth in FMCG business with steady increases in EBIDTA, and infotech, agri businesses adde cherries on top and last but not the least company has been returning capital wel to its shareholders via divs | Increases in taxes on cigarettes, profitability in hotels business and tough competition in the fmcg space from established competitors are a threat |
| DEEPAKNTR | 6.57 | Leader in the space of speciality chems, company has long track record of excellent execution and further building capabilities across the value chain, had entered at around 711 rs massive gains over the past year has resulted it having second position in pf | Prices of comodities can affect margins, international competition from china, regulatory risks on environment and other compliances as well as risks of accidents in factories (has happened recently) |
| INFY | 6.5 | Bellwether IT stock with capable management, has stable capital allocation policy of dividends and buybacks, infy has quite a few huge deal wins the past year and reason to think the momentum wouldnt continue going forward in the cloud and digital space especially | Attrition IT companies are facing serious pressure from high-paying startups and MNCs and India’s huge and cheap labour force is their prime USP although indy has been reducing the risk by increasing hiring in other countries locally like in the US. Also reduction in global IT spends in present scenario is a risk |
| HDFCBANK | 6.41 | One of the largest and systematically important bank in India (TBTF), has the best track record on lending standards and net interest margins and I believe upcoming merger with HDFC will be a net benefit | HDFC banks biggest weakness has been its tech infrastructure and it has been seen because of this their credit cards business had been affected last year |
| LT | 5.74 | Probably the company building new India, no other construction biz has shown the scale and efficiency of LT but more important than construction is LT’s holdings in valuable businesses like LTI, mindtree, LTTS and LT finance excluding the values of which would put the constructon biz at pretty attractive valuations and also company has delivered good dividend yield over time. Also recent government initiatives to invest upto 100lk cr on infra means huge opportunity for LT | The construction biz is most sensitive to macro environment recessionary env would be detrimental also government spending plans would have a huge impact on the company’s success, running construction biz also means higher leverage and larger capital requirements which also could pose a risk |
| ICICIBANK | 5.54 | This bank has seen a massive turnaround in its preformance in recent years with new management, has reduced npas, increased NIMs and has a much better tech strategy than other large banks also its subsiiaries like icici pru, lombard are also of great value | The bank has a history of aggresive lending and getting stuck in large corp scandals (chanda kochar case) but those risks are largely reduced under new management |
| HCLTECH | 4.56 | Same case infy, much higher dividend yeild whats interesting about hcl is their ER&D business which i believe has quite a potential | Same risks as infy also recently company has been spluttering a little more on its financial perf |
| Alphabet Inc - Class A | 3.8 | Probably the best case of “wonderful company at a wonderful price” if the present rout in the US market continues google has massive cash reserves on its balance sheet (100B+) and geneates huge fcf of 50B+ and is a monopoly on search and presently available at < 20 pe, google’s business segments like adverts, cloud, youtube etc have shown explosive growth over the past year and the main focus is on its cloud biz which an serve as a competitor to aws | Google’s revenue source is still not well diversified still most of its revenue is from its Ads business and given global stuations ads spend is likely to reduce in the short term, also google has the regulatory risk of facing anti-trust actions has already faced problems with the EU |
| IEX | 3.49 | A new age business in Indian power sector, the company has shown good revenue and profit growth over the past years and has extremely high profit margins given the nature of the business further this sector is very underpenetrated | The stock was subject to a lot of speculation last year leading to unsustainable valuations, give early nature of this sector there is no guarantee that the dominant position of IEX would be maintained also the stock is most receptive to regulatory risks entire business could be disrupted by small changes in regulations. |
| HDFCLIFE | 3.15 | Underpenetrated sector and a play on LIC loosing its market share (has been seen across all sectors in india public loosing to private) also hdfc has amongt the highest vnb margins and a very balanced product mix with not too much dependence on ULIPs et al. | Building trust in the life insurance sector is biggest hurdle in this sector LIC is already a household name although hdfc is also a huge brand its adoption at te level of LIC is dependent o management capabilty, company also faces regulatory risk in the sector |
| Amazon.com Inc. | 3.13 | Another company available at a very good price, my primary thesis on amazon is AWS 50% of market share in cloud is on AWS and cloud adoption is still low poised for much higher growth | Anti-trust regulations, and unprofitablity of ecom and logistics segements in this economic situation present a risk |
| MARICO | 3.11 | Another bellwether FMCG stock owning some well known brands like parachute, saffola and has made forays into the d2c space by acquiring some d2c startups, maricohas also been trying ot increase its international biz with forays in markets like bdesh, egypt, etc. has delivered faily good roce and roe along with dividends and more fairly valued than other fmcg cos | Prices of comodities again a risk here and currency fluctuations in international markets also management calibre to deliver on intl markets at the level which it has done on domestic markets remains to be seen. |
| ICICIGI | 3.08 | Again a play on underpenetrated sector health, motor, etc present huge opportunities, the company has steady financials and has delivered close to 20% RoE over the long term | Regulatory risks, merger with bharti-axa how it pans our remains to be seen also shocks after covid and present eco situation |
| Microsoft Corporation | 2.96 | Aain another wonderful tech stock in the present turmoil, again microsoft’s cloud business is the key focus with azure running up second to aws along with their sass offerings like office, msft also has been growing its dividends steadily over the years | Microsoft faces relatively less risks presently gievn how diversified their revenue sources are and hasnt faced any large regulatory ire |
| ASIANPAINT | 2 | Dominant force indian paint industry, huge distribution network with proven mgmt track record | Upcoming competition from competitors like jsw, rich valuations |
| SYNGENE | 1.85 | Most interesting stock to study, something in the cutting edge sector syngene is one of the few companies engaged in CRAMS one could simplify it as IT of biological molecules, the company has shown exponential growth at times, overall i believe the sector could be at the cusp of exponential growth | Global spends on biotech outsourcing, regulatory challenges and also capex on bringing new plants ext online (ex their mangalore plant) |
| TITAN | 1.63 | Bet on indian consumption, especially india’s festivals economy | Rich valuations, gold prices. |
| PIDILITIND | 1.59 | Again a monopoly stock similar to asian paints | Risks are also similar to that of asian paints |
| CANFINHOME | 1.5 | An interesting HFC, has shown one of the best asset quality in the industry, competitive returns on equity, stable returns on equity did report some of the best quaters in the last year and management is well experienced and most of is customers belong to the salaried class with lower ticket size loans. | Real estate market risks, still owned by a psu (canara bank) which is trying to sell it without much success, managemen’s goal of doubling balance sheet is quite ambitious also lot of competition from established companies like hdfc |
| Berkshire Hathaway Inc. - Class B | 1.43 | The legend’s company I don’t think much explanation is needed here :-), Berkshire’s stock serves as exposure to america’s various sectors like insurance, railroads, energy, etc which I dont have the expertise to analyse | Succession of the company |
| Facebook Inc - Class A | 1.28 | Most riskiest tech stock right now but facebook still is able to generate nearly 20Bn+ in fcf, and fall in earning’s hasnt been as drastic as the fall in the stock, facebook still has many avenues of monetisation like reels, whatsapp for business, etc and even thouh facebook’s metaverse pitch is far fetched but not entirely impossible | Metaverse requires huge amounts of investment, moat is severely bruised with apple’s moves for privacy, and further ire from governments as well as general society on privacy |
All the above stocks add up to nearly 80% of my stocks the remaining stocks are really small positions on which haven’t yet had a coherent thesis or am simply squeamish to sell (do suggest how one can get over this aversion to selling) but anyway the above stocks are the ones I am very bullish on and would be buying slowly in this present market situation. I would be very much happy to see your feedback please do point out flaws in my thought process, reasoning, etc. and if you have read this far I am really grateful to you for your patience.
Thank you,
Debadree
