Feedback requested on my portfolio

Hi All,

I am a newbie in both share market as well as This text will be hiddenin the forum. I liked the forum and felt the members are very kind. That gave me the courage to raise my question here on the second day itself. Please find my portfolio below. I am new to market and started reading 3 months back. So far with whatever little I read and understood, I built this PF. The considerations I had was 1) consistent sales performance over last 5 years, consistent profit increase in last 5 years, ability to drive the business forward and past returns of the stocks. Except couple of stocks, mostly I selected the top 3 companies in the respective sector. My rational behind this is that no one can become the top 3 without hard work and if someone reach there, then more often than not such people tend to continue the same way. Even though I read about all the PE,PB……all sorts of ratios but still getting a grip over it, so I have not used those parameters to judge these companies. Rather I reviewed it with my little knowledge on P&L & BS. I humbly request you to review this and let me know if I made any errors here. Based on the past performance records, PF should be providing more than 24% CAGR. I simply took the average returns of every stock for 5 years and 10 years and took the yearly average from that. Even the SmallCase performance comparison shows that portfolio will be reaching `157 vs 120 (Index). Please correct me if my understandings are wrong here.
I intend to invest every month on a SIP basis without looking at the price points using the SmallCase I created. I am looking upto 15+ years. I intent to relook into the portfolio on a monthly basis and correct it if needed. Please advise if you find any gaps in my understanding or approach.

My rational of choosing these stocks.
Reliance : a unique company who is a leading ISP with over 60% market share + Leading Oil&Gas company in the country + a leading retail company in the country. The combination of all these with a lot of other group companies puts RIL into a great position.
Cholaman.Inv.&Fn : A well managed profitable NBFC. Consistent performer over the years. With my little understanding, I felt their books are clean. Even the reviews in many sites were +ve. Good returns in the past
Muthoot : A well managed profitable NBFC. Consistent performer over the years. I know their working style and they should be profitable all the time. Even the reviews in many sites were +ve. Good returns in the past.
Bajaj Finance: Consistent performer over the years. Great performance all the while. Even the last quarter result also not very bad though it is not at par with their own standards.
Berger Paints : A good number two who is giving better returns to share holders than Number One. Overall review was good.
Infy : A good IT company with strong fundamentals. Me being a part of this industry knows a lot about these IT companies.
Mastek: A rising star. They are doing very well. Evosys is getting business from everywhere. Wanted to be part of their growth
HCL Technologies : A stalwart along with Infy & TCS. It will continue like this for ever
LTI : A good service provider with a lot of focus. The management is superb and they will catch up with the other 3 very soon.
Laurus Labs : Good reviews and sales numbers.
Kotak Mah. Bank: Selected Kotak ahead of ICICI because of two reasons. First the leadership and second all the subsidiaries of Kotak comes under the same entity. May be this is a reason for this stock being overprices all the time.
HDFC Bank: No1 bank in India with stellar performance all these years. It was a no brainer pick.
Pidilite Inds.: the first case study I read when I started learning market. A good company to invest. All the FI,DI and other institutional investors gives more comfort to invest in this. Consistent performer all these years
Deepak Nitrite: All the reviews were positive. Spoke to a friend of mine who is chemical engineer. He also gave +ve feedback. So selected it.
Supreme Petroch. : Heard it from twitter and figured out that this is a good company with good numbers and performance. On further research many people were pushing it as a multibagger. Couldn’t see anything wrong, so selected it.
Titan Company: A good company with some great management delivering consistent performance.
Astral Poly Tech: Stumbled upon this from a site which showed the increased number of MF, FII and institutional investments. Good performance so far and also riding on the institutional /MF/FI investment. I am 200% sure that they would have done the due diligence. Past performance was mind boggling.

Eagerly waiting for your feedbacks.

Thanks,
Vipin Kaimal

1 Like

Welcome to ValurPickr forum.

I think you have calculated the price performance. You should instead see the profit growth CAGR. Often price growth exceeds profit growth because of PE expansion (re-rating). Regardless, you should not project the past growth into the future as that most often leads to disappointment.

However, you’ve put up quite a decent portfolio for a newbie. It should help you beat FD returns handsomely.

Most of your portfolio companies are proven performers.

Some pointers:

  • I am not following Mastek. However, it is performing well. Please follow the VP thread. It is not a proven performer. So, make sure to track it continuously.
  • Deepak Nitrite is a good company but it is performing at its peak nowadays & thus undergoing PE expansion. Such performance may not sustain forever and then the price performance may lag.
  • Supreme Petrochem is mostly a commodity company which has good amount of cyclicality in growth. If you don’t understand the commodity cycle you shouldn’t invest in this company. Commodity companies create euphoria in the up-cycle followed by extreme grief. So, never invest in such companies based on recommendation.

There are tons of incidents where institutional investors have been wrong. Never be so confident about their intelligence. :smiley:

Lastly I would like to know what percentage of your overall portfolio is in equities. And is that equity portion completely into direct equity? Do you invest in mutual funds?

3 Likes

Dear Sujay,

Really appreciate your kind feedback here. I would like to seek clarity on few points here. When you say profit CAGR, do you mean to say the EPS growth rate? . I will rework on the 3 companies you suggested. BTW, what change should I bring in to my approach so that I can beat Index&Mutual funds.

On my asset allocation, this is 30%. 45 % is going into mutual funds and 25% debt funds+bank+other deposits.

Thanks,
Vipin Kaimal.

They are same if there hasn’t been any equity dilution during that tenure. EPS growth is more meaningful from shareholder perspective.

I think you’ve started in a good way. Just stay in the market, read as much as possible, experiment as much as possible without taking undue risk, and give yourself enough leeway to create your own investment philosophy.

Beating index should be a goal in the long term, say 10 years. In the short term index may outperform. This is true for most mutual fund and PMS too.
Beating MF shouldn’t be your goal unless you want to lead a life of restlessness.

As you are just beginning just remain content with returns around 12-15% CAGR. Atleast that is what you can reasonably expect from your portfolio in the long term.

You have quite well diversified stock PF but still could have been better prospects of wealth creation with adding Sanofi India Ltd, Kovai Medical & Hospital Ltd, Poly Medicure, HIL LTD, TIDE WATER OIL Ltd, HPCL, The Ramco Cements Ltd, Tata Steel Long Products Ltd, Sandur Manganese & Iron Ore Ltd, GRM OVERSEAS LTD, ORACLE FINANCIAL SERVICES LTD, ZYDUS WELNESS LTD, ABOTT INDIA LTD, TATA MOTORS LTD.

3 Likes

At the onset, apologies for the delayed revert. Was stuck into few other things.

I really appreciate your suggestions here. To be honest, I didn’t know about many of the stocks you suggested. Some of them like Oracle, Abott ,Tata Motors etc was deliberately skipped by me. I was not so comfortable with those stocks. I know that we need to keep our personal bias aside while investing, but it is difficult to practice it I guess :slight_smile:

I am still reading and trying out various parameters on screening the stocks.

Good portfolio. All the best

Btw fmcg stocks seems missing

1 Like

Yep. Added NESTLEIND & ADFFOODS.

Y adf food ? Is it’s coz of it’s valuations?

1 Like

Good PF…i have lots common with ur PF…

1 Like

Sorry. I missed to revert.
ADF is a good company with lot of growth potential. Their numbers are strong and robus fundamentals.