If you go through concalls of both Avanti feeds and Apex frozen, there is clear cut articulation that both managements expect FY 23 to be a year which is better than FY 22. However I do not consider these companies to be structural growth stories. Both are susceptible to vagaries of demand /supply and the duty structures in the US markets. Plus the all important input prices.
Kaveri seeds has been struggling to show meaningful consistent growth. They keep doing buybacks regularly which keeps folks excited, but ever since it went into corrective mode post its stellar rally where it went up multifold, it has never had any meaningful rally.
Hitesh bhai could you explain in detail about the structural growth stories? How a small cap become a large cap like Infosys and divis? It’s a 1 in a 1000 chance but still what’s the catch here? How can a company with below 100 staff goes on to employ lakhs of people in just 3 decades? Could give some case studies and if possible few stocks/sectors where there is potential and what the management has to do to realise the potential ? Thanks in advance
Since you are invested in Ujjivan, can you please help me to understand why does Ujjivan Financial Services trades at a steep discount to Ujjivan SFB calculated on the basis swap ratio of 10:115. Discount is almost 33% at CMP.
Hello @hitesh2710 Sir,
I have query on my tracking GFL Ltd(Holding company of Inox ~ 43%) Inox and PVR in process of merger
Is it possible that GFL gets dissolve and holders gets PVR shares after completion of merger or INOX shares before merger
Please share your view, knowledge and experience on this type of situations
To get an idea about structural growth stories, or about how a small cap can become a large cap, you should go through this lovely thread of 100 baggers started by dr pragnesh shah, who has put in a lot of efforts to put forth the idea of 100 baggers in a concise format.
Post that you can go through the VP threads on success stories of companies that came out of obscurity and became big winners. Threads like Ajanta Pharma, PI Inds, Astral, etc. Benefit of going through these threads is that you get to know what people felt and wrote when the company was a small company and how things unfolded as time went by. Its important to know opinions of retail investors in early phase of big winners, because that is what we may ourselves face when we are on to a big winner early on.
Ujjivan fin services trades at a discount to Ujjivan SFB because as of now its a holding company and most holding cos attract holding company discount, till the time some form of value unlocking triggers are visible. Here, in case of Ujjivan twins, the merger of holding company with the bank can be an important trigger, more so as we have an example of something similar nearing its conclusion in case of the HDFC twins.
@hitesh2710 ji, would like to pick your brain on charts of Rushil Decors
does this qualify to be a cup and handle pattern (3-years graph). I’m a novice at this. still learning the basics… So am I just seeing things?
the fundamentals seem to be on the uptick… revenue doubling after 5 years of stagnation… highest ever Operating Profit with scope for increase in OPM…
and the entire manufactured wood industry seems to be on rising due to pressure from imports, increasing proportion of MDF as against Plywood and real estate revival. (Courtesy: FVP post on Rushil Decors)
Lets not make this a generic thread on asking anything and everything without making any efffort at understanding ourselves. This is a forum to learn and if possible earn based on that, rather than spoonfeeding. So let’s keep it that way.
We have had a strong rally from the lows of June 22 at around 15200. Currently we are at near 17400 and the nifty has rallied close to 2200 points in a matter of 2 months. All throughout this rally there has been absolute disbelief about the sustenance of this rally and various people have called levels of 16800, 17100 etc as potential resistances, but markets seem to have a mind of their own. We seem to be in an expanding triangular structure in nifty and the overhead resistance could be possible at around 17700-800, a level I would watch out for any signs of exhaustion of this rally. The aforesaid expanding triangle is marked on the attached nifty chart.
I have always tried to refrain from predicting the market movements in advance because the one thing I have observed is that its difficult to get these predictions right all the time. I might draw a few simple trendlines and try to see how markets behave at crucial points which I see on these simple charts. But its better and more rewarding to focus on companies which enjoy strong tailwinds and strong charts , or where markets give a thumbs up to even weak results, indicating good times to come ahead.
Some of the sectors which seem to be showing strong charts till now have been defence, autos, capital goods, power and energy, capex themes, etc. One sector where I see market giving thumbs up to what are comparatively weak quarterly numbers is the FMCG sector. But here, with prices of input materials like palm oils, dasda, other edible oils, materials used for soaps, shampoos etc cooling off, there is promise of better times to come. I would not like to take specific names, but as a sector one can do some more detailed work and try to find anything interesting. Or try to find ancillary play to these names.
Individual companies in the portfolio like Fluorochem, Usha Martin, HBL power, and some trading bets in auto anc space, auto space, hotel space etc have been showing strength/resilience. There are many other stocks and sectors which seem to be on the verge of completing their long corrections. I will post any sectoral stocks once I see clear actionable patterns.
As a investor interested in growth, how much importance do you place for a stock which do well both in terms of top line and profits yoy, but de-grow qoq on both sales and profit.
For ex. If we see the results of Gujarat Flourochem or Schaeffler, it has done well both yoy as well as last sequential quarter, whereas company like HBL power did well over last year quarter but de-grew compared to previous quarter. I know it’s too much to expect greater performance and compare it with last 3 months. So how much of this does matter for you?
Since you are fairly concentrated investor betting big on few stocks, how do you deal with adverse situations, which can’t be foreseen. For example, recent income tax raids in the case of Krsnaa diagnostic and insider trading by director in one of innerwear company (can’t recollect name). If we see, in the long run all these doesn’t matter much, like in the case of Divis where there were some IT search/raids and then some insider trading etc., but the stock went up several x.
However, in the short term, the news is enough for the stock to fall by 20%. So with limited capital, being concentrated, how should one manage these kind of risks which is unforeseen.
While looking at companies quarterly performance, we have to know that there are certain companies involved in certain sectors where particular quarters are heavy and some are not so heavy. In companies like HBL where an element of defence orders is there and govt projects like railways are there, quarterly results can be often lumpy, so its better to look at them on a yearly basis. There are some sectors like construction, defence, etc where last quarter is often best quarter. Another example is of Kaveri seeds where q1 is the most important quarter.
In a concentrated portfolio, there is not much space for errors and if an error is detected, it has to be dealt with as early as possible and in a decisive manner. Krishna and Divis are different business models. I usually am not too aggressive with companies with high percentage of revenues from govt side. The so called B2G businesses. Because according to me, these depend a lot on currying favours from those in office and hence orders may not be sticky. Plus payment may remain pending for long periods of time when it has to be collected from govt.
Even after all precautions, stocks often fall because of unexpected reasons and in these situations, the rough has to be taken with the smooth and it often makes sense to exit at earliest sign of trouble.
Hitesh sir, you have multiple trading bets in the hotel sector. I have couple of queries related to it:
1/ How long is your time horizon for these bets (2-3-6-12 months)?
2/ Most of these stocks are already up 50%+ so far in 2022, so how do you see the valuations of these stocks (are these still undervalued or now fairly valued)? how much more upside are you expecting in hotel stocks from here on as per technicals?
Yesterday attended a twitter seminar having Sajal sir. He said this is not practical because
Unbranded generics are cheap for a reason. u wont step into the factories of them bcz they are in bad shape. There is nothing like USFDA in India to control quality.
Medical professionals also dont like them because if it takes 2 pills and 2 days hospital bed for a patient to recover with branded ones then with unbranded generics of low price it takes 20 pills and 7 days.
Absolute profit earned by selling one pill of unbranded generic is much lower than branded one. So to make same profit the pharmacist has to sell more pills.
Hence it’s not viable and sajal sir told this type of things makes no sense for neither the doctors, nor the patients nor the pharmacist. Only government gets some credit for bringing down medicine price but at what cost? india is already the cheapest producer of drugs. How do u make some thing more cheaper when it’s already cheapest in the world.
Hi hitesh bhai, you recommended shaeffler India for a technofunda bet about a year ago. The stock did fantastically performed and reached a peak of 2000 then it sold of to 1800. some time ago in March 2022 I asked for your opinion on the stock as it already had significant run up from your recommended levels. Then you replied that you exited counter at 1800 and don’t expect any major move. But to our surprise the stock went up another 50%.
My question is how can we avoid missing such moves even when we have identified the counters for technofunda bets.it happened with me alot in recent times as I was looking for opportunities to go in using technofunda method. I waited for laurus labs to correct till 450 levels to buy but when it did happened i was unable to pull the trigger. Happened in sbi when it was 440 and happened with icici bank at 680 and in many more counters. I wanted to buy stocks for 10 to 20 percent up move within 1 to 2 months. Most of the times the stock making the move but I’m unable to hold the position for the entire move. I’m able to capture only 2 to 3 percent or exiting the loss. Could you suggest any psychological or anyother changes in my approach? Or in general the desire to stop booking the small profits and hold for larger gains.
Thanks in advance