Devarajan's Portfolio

Hi All,

My Investing Journey so far:

I have started investing in Stocks in 2008, (luckily after the big crash) during my first job after finishing Engineering. The first stock I invested was SBI with which I had my first savings account. Second was Indian Hotels which I bought after the 26/11 attack and subsequent crash in the stock price. Liquidated 90% of my stock holdings before my MBA, started investing again in 2013. Used the interim time to read further, also explored sites like ValueResearchOnline, Moneycontrol, research reports etc.

Have been a quiet reader of various threads in VP for the last one year. Also follow MarketsMojo to track investments. Increased my allocation to stocks in the last 2-3 years.

Portfolios and Asset Allocation:

  1. Retirement Portfolio: Includes EPF and NPS.

  2. Debt (Conservative and Aggressive): Liquid Funds, Peer to Peer Lending. Recently started moving from Liquid Funds to Bank FDs looking at the IL&FS story.

  3. Equity Mutual Funds - Only ELSS, with rotation after 3 years. Need to rethink as LTCG has been introduced recently.

  4. Stock Portfolio - Objective is to create long term wealth, with occasional restructuring based on performance.

Stocks Portfolio:

Providing my stock portfolio below. Requesting constructive feedback from fellow investors.

Company Industry % Average Price

  1. HDFC Bank BFSI 12 2000
  2. Piramal Enterprises BFSI 11 2350
  3. Bajaj Finance BFSI 11 1870
  4. Edelweiss BFSI 5 170
  5. DMART Retail 11 430
  6. HUL FMCG 7 1670
  7. Britannia FMCG 3 5530
  8. Asian Paints Paints 9 1300
  9. Reliance Diversified 7 1150
    10 Avanti Feeds Aquaculture 9 450
    11 Godrej Properties Real Estate 10 620
    12 PSP Projects Real Estate 5 430


  1. HDFC Bank - Steady compounder
  2. Piramal Enterprises - Good Prospects, Performance and People. Bought recently below 2000.
  3. Bajaj Finance - Best managed NBFC. Good Prospects, Performance and People. Bought recently below 2000.
  4. Edelweiss - Diversified financial services.Good Prospects (ARC, Insurance etc.), Performance and People. Expecting to add more in the coming months.
  5. DMART - Best bet in retail story. Holding from IPO and added further.
  6. HUL - Steady compounder
  7. Britannia - Steady compounder
  8. Asian Paints - 50% market share. Steady compounder
  9. Reliance - Steady compounder. Retail, Digital Content & Telecom emerging as growth engines.
  10. Avanti Feeds - Steady compounder. Looking to add more.
  11. Godrej Properties - Best brand and promoters in Real Estate. Bet on consolidation in the industry, which I feel is bottoming out.
  12. PSP Projects - Good execution and Growth. Debt Free. High Promoter Holding. Looking to add more.

Only trying to hv a discussion here.

HDFC at PE 28 is expensive. There are some better Banks at lower PEs. No matter how good HDFC is, if bought high, it may not give returns in the near long term. Just like:

Asian PE 56
dmart PE 102

Surely, it will be tough for these companies to give a handsome return from these levels.

I would suggest get out from expensive stocks, and getting into cheaper ones. Like Yes Bank, Mayur, Finolex and so many others…

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Thanks Amit.

From my experience, quality will always be expensive. I was a staunch believer of value investing but have seen that most of the value stocks remain value traps.

Intention is to build a core portfolio with steady growth first, then venture out for some value buys. Avanti is one candidate, exploring Mayur as well. Will stay away from Yes Bank. I havent tracked Finolex.

The long term return I expect from heavyweights like HDFC Bank, Asian Paints, HUL etc is 12-15%, which they have given in the past and am hopeful of getting in the near future.

DMART is expensive no doubt but I will wait to see one or two bad quarters before exiting.

I am exploring more stocks as I wish to expand the current list of 12 stocks to 15 or 20.


The likelihood of getting into a value trap increases as we stray away from large cap stocks.

In the same breathe, getting into High PE stocks is a trap from the very start. To illustrate…

HuL was a dud from 2006 to 2011…
Infy from 2010 till date. Luke warm performance…

I could go on and on. LT, Tata Steel etc.

Everytime we buy a large cap at a high PE, it is almost always trouble. It could be a different case with mid caps, as they have plenty of room to grow. But it is still a risk.

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Very interesting and looks to be good picks. What’s the share of stock PF in percentage out of overall investments ? How much cash you hold to invest further to stock PF as a percentage to total stock PF allocation ?

One test I use based on Peter Lynch principle is that PE should be less than growth rate. So you can buy a high PE stock as long as the growth rate remains above the current PE. Bajaj Finance passes this test. Other quality stocks you hold looks quiet expensive to me. Your holdings are well researched and have a history of good performance. There is a good probability that future will be good as well for these stocks performance wise. It is only the price that looks expensive for some.

I never understood quality investors. But your selection may be good in an overheated market looking to fall anytime (which is what is happening now) as the downside will be protected.


Pe less than growth. Means PEG less than 1. Is suitable for midcaps

Large caps tend to ask higher PE as they are popular and on the list of fund houses. And growth is less, due to their sheer sizes.

I mean, metrics for Large Cap and Mid Caps will be different as far as PEG is concerned.


You mean PEG less than 1, please correct the typo.

Expensive compared to what? Quality will be expensive, is a universal truth, but by how much. Can we quantify it?

If Page demands 87 PE… then how much EPS and EPS growth must it have?

12%…15%… Is proper expectation over the very long term. HuL tends to consolidate for several years then breaks out. Five years of no share price gain, or moderate correction, then break out.

110 PE… A tough spot to be in.

As of now, stocks is 25% of overall portfolio and 50% of Equity portfolio.

Cash holding is not uniform, typically around 10-20% of stock portfolio.

BFL was my largest holding till sometime back, reduced as it crossed 20% of total portfolio. In the hindsight I was lucky to miss the NBFC crash which took even BFL down.

In fact, my increased allocation to Asian Paints, HUL happened as a result of too much % of Financial services in the portfolio.

Appreciate your views.

There was increased allocation to Asian Paints, HUL due to my worries on diversification - i.e., too much into financials. I will switch partially to some of the growth/value stocks.

As I mentioned earlier, Dmart looks to me as a different story even at this PE and will wait for 1-2 quarters of poor results. May be I am biased because of my low buy price :slight_smile:

Hi Devarajan, don’t you feel the portfolio is very BFSI heavy. The financial sector is almost taking 40% of the portfolio. I feel you should diversify slightly with your plan of adding a few stocks .Rest looks pretty solid i feel.

Yeah. Started that already some time back. Btw, it is not 40% but only 34%. Piramal is only 50% BFSI as rest is Pharma.

Updates to portfolio till yesterday:


  1. Godrej Properties - Exited completely after a pullback rally, as the market offered better opportunities
  2. HUL - Sold partially after the GSK acquisition news came out. Will buy on dips, if any.
  3. Some profit booking in Dmart, might sell more after the Diwali quarter results are out. It will be a high base for future quarters, making growth challenging.


  1. Ashok Leyland - Available at reasonable prices. Impact of Oil prices coming down. Will hold till Mr. Market appreciates its value.
  2. Edelweiss and PSP - Added this week, will add more at favorable prices.

Watchlist: CCL, Natco Pharma, Accelya, M&M

Currently, the portfolio looks like this:

Stocks Portfolio Weight Avg Price Absolute Gain
Bajaj Finance 14.48% 1871 38.9%
HDFC Bank 12.53% 2033 4.38%
Piramal Enterprises 11.94% 2317 -1.78%
Avenue Supermarts 10.8% 487 238.3%
Edelweiss Financial 9.87% 173 16.1%
Reliance 9.32% 1150 -1.14%
Avanti Feeds 8.15% 419 -1.02%
PSP Projects 7.53% 424 -9.58%
Asian Paints 4.59% 1218 14.98%
Britannia Ind. 4.24% 2765 16.97%
Ashok Leyland 3.52% 109 -1.56%
HUL 3.02% 1594 15.67%
Overall Portfolio 16.17%

Overall portfolio return looks good :grinning: but thanks to Dmart alone with super gains.5 stocks we have in common.Read the rationale stock wise and seems convincing too.

Share your line of thoughts on overall process that you are following esp wrt rebalancing, allocation, loading up or down etc. Thanks!

I have burnt my fingers in small caps in the past. So for now the philosophy is BUY quality companies at reasonable prices. I have been inspired by @Yogesh_s philosophy of ‘buy growth companies when consensus is no growth and buy defensives when consensus is growth’ :slight_smile:

Bought most of my growth stocks this year in March (was lucky to see market drop after I got yearly bonus) and also in October when the world was crashing!

Now sitting on cash and more into debt than equity, playing the waiting game. May do small allocation in defensives (i actually prefer to call them steady compounders).

Not buying anything currently, actually exited Godrej properties, trimmed some Avanti Feeds, Dmart etc as nothing much has changed for the stock price to increase. I see the current rally as irrational and without earnings visibility.

That said, I might be proved wrong, when the GST on all items are brought down by Modi Saab and market reach new high. But am ready to wait.

So, my strategy is:

  1. Buy good companies at reasonable prices in a staggered manner, average up/down if my conviction remains in them
  2. Book some profits when prices are irrationally high
  3. Buy bulk when nobody wants to buy like march, October this year.
  4. Add some promising small caps to boost returns
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All 4 points are well noted. Current irrational rally is also very valid. Kindly elaborate on point 2. You may take some actual examples. How and when do you decide to book partial profit. Is high PE or technical or others?


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Cant really quantify this aspect. It is more of a qualitative judgement call, though I always try to quantify it.

It is like I should not lose my sleep over something. If I am scared that the price might correct anytime soon, I will look at booking some profits. Or if I find better opportunities to invest.

For example, I added to my NBFCs as I think the turnaround is on account of liquidity constraints being addressed, and on my conviction that NBFCs held by me: BFL, Edelweiss and PEL will survive the crisis and come out strongly.

On the other hand, nothing much has happened in real estate but there was a rally once liquidity issues of NBFCs seem to get better. Godrej Properties had a rally without any reason. The buy reason for it was a revival in real estate on account of consolidation in the industry and larger players getting stronger. This is taking more time than expected and I found better opportunities elsewhere. Will come back to Godrej Properties if there is a good correction.

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