Hello Hemant,
Superb performance. More than the return percentage I would appreciate on Ankit’s line and say you really did a superb job of combining fundamental( what to buy) with technical (when to buy) rather neatly.
Please refer to my portfolio thread, the latest post, would like you to put your best estimates ofFY14E EPS and FY14E trailing P/E (Mar-14) for your PF stocks. This is just a quantitative exercise so rough ballparks/guesstimates will just do fine 
Thanks in advance.
thanks for the kind words rudra and ankit. i have extremely lucky to start investing close to significant bottom in dec-11 and also to be an extremely good company of investors with superb skills. i have done a few mistakes in this journey which i have learned from:
1. if a stock is cheap and remains cheap for a long time - market is correct most of the time and there will most likely be a reason for that stock to be cheap. e.g., arshiya.
2. continous rebalancing of portfolio to maintain doesn't necessarily work. for e.g. i got entry and exits correct most of the times with ajanta but kept on reducing its allocation to keep its overall weight in the portolio in check. the learning from this is that one should ride their winners until you find a fundamental reason to sell it rather than just to rebalance the portfolio.
as far as earnings growth and PE expectations(trailing PE on fy14earnings)are concerned, i have the following:
| stock | fy14 growth | PE |
|
ajanta
|
35% | 18 |
| astral | 40% | 18 |
| cera | 30% | 15 |
| page | 35% | 40 |
| kaveri | 35% | 18 |
| hawkins | 25% | 35 |
| hdfc bk | 30% | 25 |
| indusind | 35% | 23 |
| atul auto | 35% | 10 |
| mayur | 25% | 12 |
| PI inds | 30% | 18 |
| poly med | 30% | 18 |
|
unichem
|
30% | 16 |
| wimplast | 25% | 10 |
| wockhardt | 0% | 12 |
| granules | 35% | 14 |
| la opala | 35% | 15 |
Too optimistic in my views...
Like Mayur has guided for 15% only, La opala has given 20%,Atulhad 0growth inApril.. would be tough to grow>15% this yr given auto slowdown.
Anyways lets see how things turn-up in future.
However would like to ask youon the stock with the best growth rate- Astral.
Why do you expect it to grow 40%?? Can it grow 20+% for 5 yrs? If yes, why?
Disclosure- No holdings in Astral :( but looking to buy..
fy14earnings)are| stock | fy14 growth | PE | |
|
ajanta | 35% | 18 | |
| astral | 40% | 18 | |
| cera | 30% | 15 | |
| page | 35% | 40 | |
| kaveri | 35% | 18 | hawkins | 25% |
| 30% | 25 | indusind | 35% |
| 35% | 10 | mayur | 25% | 30% |
| 30% | 18 | ||
|
unichem | 30% | 16 | |
| wimplast | 25% | 10 | |
| wockhardt | 0% | 12 | granules | 35% | 35% | 15 |
hi jatin,
the growth numbers above are
not revenue growth. most of these stocks are also a play on operating leverage having just finished or finishing the capex.
mayur management is usually conservative but still even if it grows at 15% only in revenues, i expect profit growth to be higher due to higher export contribution.
la opala also has been showing improving margins over the last few quarters and hence the growth in earnings this year is expected to be higher than revenue growth inline with the current trend.
atul auto this year had 20% revenue growthbut much higher66% profit growth. they are finishing a capex which doubles their capacity with very marginal cost(all funded with internal accruals). i expect operating leverage to come through this year so even with 15% revenue growth i expect profit growth to be higher.
astral has been growing at 40% cagr for the last 10 years! so this year’s 40% growth is not a one off and has come in a 5% gdp growth environment. astral is riding an amazing growth wave of cpvc where the oppurtunity size for them is huge. its an industry wide phenomenon(just check supreme ind’s cpvc growth numbers) so i be sustainable for next few years.
adding to unichem here. think its long consolidation period is getting over. strict stoploss remains at 157 on closing basis. below that stock can drift lower to 100.
Hemant,
What are your views on Atul Auto at CMP? What according to your fundamental and technical analysis is the good price to enter the stock?
Regards,
Ankit
hi ankit,
i like atul auto at cmp. it has been growing steadily in an environment of general volume de-growth in the industry. the stock may do ok. big move will only happen once the 20%+ growth resumes.
Hemant bhai,
I did a small analysis on your growth target to find out target upside for various stocks assuming your growth and pe targets (I reduced atul growth target to 20%). I removed high pledged share stocks like granuls/wockhardt from the list. Do let me know do you have similar price target for these stocks.
| stock | fy14 growth | PE | fy13 eps | cmp | curr pe | fy14 eps | fy14 target | Upside | ||
| wimplast | 25% | 10 | 47 | 360 | 8 | 59 | 589 | 64 | ||
| cera | 30% | 15 | 37 | 495 | 14 | 47 | 712 | 44 | ||
| atul auto | 20% | 10 | 23 | 192 | 8 | 27 | 275 | 43 | ||
| unichem | 30% | 16 | 11 | 160 | 15 | 14 | 227 | 42 | ||
| hdfc bk | 30% | 25 | 28 | 651 | 23 | 37 | 918 | 41 | ||
| kaveri | 35% | 18 | 94 | 1650 | 17 | 128 | 2295 | 39 | ||
| mayur | 25% | 12 | 40 | 437 | 11 | 50 | 605 | 38 | ||
| indusind | 35% | 23 | 20 | 466 | 23 | 27 | 630 | 35 | ||
| hawkins | 25% | 35 | 64 | 2138 | 33 | 81 | 2821 | 32 | ||
| page | 35% | 40 | 101 | 4225 | 42 | 136 | 5448 | 29 | ||
| PI inds | 30% | 18 | 7 | 132 | 19 | 9 | 166 | 26 | ||
| la opala | 35% | 15 | 22 | 361 | 17 | 29 | 437 | 21 | ||
| astral | 40% | 18 | 26 | 579 | 22 | 37 | 667 | 15 | ||
| ajanta | 35% | 18 | 43 | 932 | 22 | 58 | 1049 | 13 | ||
| poly med | 30% | 18 | 22 | 525 | 24 | 28 | 510 | -3 |
thanks subash
interesting exercise…
There could be surprises in terms of eps and PE for some of the stocks.
lets try and follow this table and see how things pan out.
thanks for the analysis subash. wockhardt and granules are test cases right now to track and see how the story unfolds there and hence the low allocation. of the estimates that you have come up for profit growth, i think poly med(due to removal of forex losses), atul auto(margin expansion), kaveri(better possible growth) could surprise on the upside. in terms of price target, i believe wimplast, hdfc bk, mayur, page may underpeform the target proposed while poly med, astra, la opala have chance of outperforming those.
Hemant,
Can you provide your estimates in the table above?
Also have you made any allocation/deallocation recently?
Regards,
Ramesh
hi ramesh,
i have added to lupin(below 750), ajanta(below 800), hdfcbk(630), kaveri(1550), unichem(155-160) and sold wimplast(fully), granules(partially).
on estimates, i have quite similar numbers to subash.
| fy14 growth | pe(end fy14) | |
| lupin | 25% | 25 |
| cera | 30% | 15 |
| atul auto | 25% | 10 |
| unichem | 25% | 15 |
| hdfc bk | 30% | 25 |
| kaveri | 40% | 18 |
| mayur | 20% | 12 |
| indusind | 30% | 22 |
| hawkins | 25% | 35 |
| page | 35% | 38 |
| PI inds | 30% | 18 |
| la opala | 30% | 15 |
| astral | 35% | 18 |
| ajanta | 30% | 18 |
| poly med | 35% | 18 |
**Thanks a lot, Hemant!
Would it be prudent to convert Page into Kaveri/Unichem at CMP?
Regards,
Ramesh**
page is in a different league ramesh. it would keep compounding for many years to come. I can’t say this about kaveri or unichem yet. in the short term kaveri may outperform page. not so sure about unichem.
hi ramesh,
**
Thanks
Ramesh
**
hi ramesh,
FY14 G PE Upside/downside
Poly medicure 30% 18 -3
Hemant bhaiya, but technically Poly medicure is on strong footing along with Kaveri, Cera and Astral.
Going forward do you see Poly medicure underperforming ?
Regards
mallikarjun
hi mallikarjun,
technically it is on a strong footing. it is a stock which moves in spurts and then consolidates for a long period of time. it is going through one such consolidation. it rarely goes through price correction but does more of a time correction. these stocks usually show limited downside but upsides are also slow and more of a grind higher.
thanku bhaiya :-).Have been adding poly medicure from 2 weeks. Now waiting for ex bonus date to add more, since after ex dividend/bonus date stocks tend to fall more.
Regards
mallikarjun
Hitesh bhai,
Thanks for your encouraging words. What I was thinking is to have a spreadsheet, where we can have growth/pe in {min/max} format. So as we can calculate the {min/max} of target upside (for next 1 yr). We can update the same once a month (shouldn’t be a big exercise, I can do the same, provided I get data from seniors).
I feel this should help us big time in deciding which stocks to buy now.
Regards,
-Subash
Hitesh/Hemant/seniors,
This is the type of table I was refering to in my last comment. Planning to create a new thread for ease tracking of this
| stock | FY14 target growth | FY14 target PE | FY13 EPS | CMP | FY14 EPS | FY14 Price Target | Upside | |||||||
| Min | Max | Min | Max | Min | Max | Min | Max | Min | Max | |||||
| ajanta | 35% | 40% | 18 | 20 | 43 | 932 | 58 | 60 | 1049 | 1208 | 13 | 30 | ||
| astral | 40% | 40% | 18 | 20 | 26 | 579 | 37 | 37 | 667 | 741 | 15 | 28 | ||
| atul auto | 15% | 25% | 8 | 10 | 23 | 192 | 26 | 29 | 210 | 286 | 10 | 49 | ||
| cera | 30% | 40% | 13 | 15 | 37 | 495 | 47 | 51 | 617 | 767 | 25 | 55 | ||
| hawkins | 20% | 30% | 30 | 35 | 64 | 2138 | 77 | 84 | 2322 | 2934 | 9 | 37 | ||
Good initiative Subash. I keep a rough table like this with me for all my stocks where I track their pe, price, growth prospects on weekly basis. I update my growth prospects and hence projected pe based on ground level feedbacks( valuepickr ), management interviews, research reports and actual quarterly results and concalls. This long with technical analysis helps me make entry/exit decisions, partial profit booking and incremental capital allocation. On top of this, I give a lot of weightage to capital efficiency ratios, consistency in growth and management’s ability to deliver on the promises they make during interviews and concalls. All this has helped me immensely over the last 2 years.
