ValuePickr Forum

Hitesh portfolio

Hi Hitesh bhai
1 Kilpest India is into agrochemicals and pesticides. Profit has shown good growth with 5 year CAGR being approx 70 percent and quarterly profit jump by 84 percent. It’s a small microcap and price too has increased considerably following the earnings . Can it be considered at a high price as whether theres still steam left as I have seen a lot of times that small caps seem costlier but theres high possibility of growth due to low size but also get worried after looking post 2017 period where lot of good quality small caps were only doing sideways movement despite good result
2 should one keep switching between large and small caps depending on momentum in favour and investor preference ? As I observed in my very short investment tenure that in 2019 many were bullish on page, titan including me and had written off small caps and now its vice versa with renewed focus on small caps
Request your suggestions and guidance Hitesh bhai and thank you so much for handholding amateur investors as you have always done :pray:

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Hitesh will certainly answer this… I am putting my views about such scripts

Let us list down growth drivers other than Covid for this company. If we can see something which gives a visibility of atleast 3-4 quarters… certainly it qualifies for long term investment.

Contrary to above, if it has only covid as the growth driver, it has uncertainty as everyone is waiting for vaccine & few nations have claimed to be different stages of trial… as soon as we get a successful vaccine , revenue growth for such companies may disappear. If one wants to exercise their luck & have entered at lower levels … they may enjoy the momentum but fresh entry at current levels has huge risk associated. The scrips trading in back to back circuits have additional risk attached to them.

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Can anyone throw light on Nava Bharat Ventures.
In their consolidated cash flow statement there is an allowance of credit loss of Rs156 cr compared to 27 cr last year. Also unrealized foreign exchange loss of Rs43 cr.
Whereas in their notes, figure is 189 cr loss due to adjustments on account of foreign currency fluctuations.
Is 189 crs a total of 156+43 which is 199 crs, a 10 cr deviation.
What am i missing here ?

@A_shah

Specifically in the case of Deepak Nitrite, the q1 fy 21 results have been below par because of closure of facilities for around a month and drop in prices of Dasda which was the main growth driver for super profits in previous few quarters.

The phenol spreads which had remained subdued during previous few quarters have picked up somehwat but by and large they remain fluctuating.

Deepak has a steady basic chemicals division which is a steady business. But the main growth driver going ahead will be the fine and speciality chemicals division where there is predictable growth with higher margins. You can listen to concall to get a better idea about it.

Stock price action wise, previous all time high of 567 was crossed and stock hit a fresh all time high of 670 plus before correcting due to lacklustre q1 fy 21 results. But once a significant top is crossed, it tends to become a good support zone to watch out for on subsequent declines. As of now that region seems to be holding. We need to see how it holds.

Fundamentally we need to see how the fine and specility chem segmeng plays out besides any improvement in phenol spreads as well as uptick in dasda prices.

I dont track kilpest.

@Mukundks I havent tracked the triggers in lupin too closely but Mayur seems well placed to ride any possible rebound on the auto sector. One can listen to the candid talk of Mr Poddar on concalls. One has to consider the levels to where stocks like mayur have corrected during the previous correction. Post significant falls, any positive news for beaten down stocks is often cheered very well by markets.

Regarding responses to results it often takes a few days for the market to react properly to results. So one has to be patient to see how the market reaction plays out.

@Aluwalia Defence stocks have as you said shown a lot of momentum post govt policy annoucements. But I am not too big a fan of playing themes based on govt announcements. I would prefer to wait for actual results to materialise and only then take a call. Chart pattern wise these stocks have done very well but I prefer to look elsewhere.

@vivekinfinite, Not tracking nb ventures.

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The main interest in Kilpest as well as the recent profit jump comes from its unlisted subsidiary 3B Blackbio Biotech, which is into diagnostic business. There is a separate thread on Kilpest worth checking out.

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We work with data mostly published by various listed companies showcasing their financial performance, management interviews etc but I observe an interesting fact on individual thread for respective scrip also contributes in identifying the fancy stock of market.

Following data is related to Kilpest thread on our lovely forum

The thread started almost 10 years back. It had 64 posts till covid hit India started first lockdown, the thread got 113 posts in next 4 months & further 54 posts in last 30 days

To put it in simpler words

64 posts in 9+ years
113 posts in 4 months
54 posts in 30 days

We have seen activity reducing as soon as the stock looses its charm among investors.

Kilpest or activity on any other thread has helped me in tracking market fancy stocks & most of them turn out to be good for retailers, who don’t have access to information related to company. It helps us other way as well… decreasing no of posts give a hint of mood of retailers… e.g. Laopala used to see regular activity but has lost it way on the thread and market prices also.

@hitesh2710 : I thought of sharing relation between investor psychology and valuepickr thread of respective company through this post. Feel free to remove if it doesn’t add value.

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Hi @mrai74 could you also please share the methodology for the counting? Was it an automated script, or a manual counting that you did? If the former, would it be possible to share it so that rest of us could also make use of it.

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Hi @hitesh2710 sir. Sometime back you had mentioned that you are invested in Polyplex and Cosmo Films as a technical bet based on industry tailwinds. Polyplex has come up with good results but the price hasn’t moved at all today.

Wanted to know your views on the industry. Is this high growth sustainable in the coming quarters or it was one-off and things will normalize going forward?

I would NOT recommend running any script on valuepickr.com without prior approval of administrators.

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@fundoo

These polyfilms are typical cyclical companies. Idea should be to buy with a huge margin of safety and ride it or buy based on technicals amd exit when trailing stops are hit, or targets are achieved.

Trying to predict the sustainability of the earnings is a futile exercise because things change a lot with time and its difficult to forecast beyond a quarter or two.

The other aspect is the market reaction to the earnings, which again is difficult to predict.

So one hand on the steering, foot on the brakes. :slight_smile:

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@hitesh2710 bhai is it a good idea to keep trailing stop losses in larger long term positions as well? Not cyclicals but fundamental growth stories.

For example a fast growing company’s stock that I own goes from 20 to 200 and then I keep a stop loss at 75% of peak price, say at 150, would it be a good strategy to retain profits? I am asking because I have observed that stocks which fall more than 40%+ seldom recover.

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Sir as all riding on these API story , it will also come to end some day .
But as retail investor not having full domain knowledge , can you suggest how should one exit these sector , once its start showing slowdown and how to know actually slowdown??
Because market will hammer every stock in any early signs being seen and we not able to understand that .

@barathmukhi

Stop losses depend upon the type of investment strategy one follows. Pure fundamental guys don’t need to follow stop losses. But for someone who follows techno funda or pure technical approach, stop losses makes sense even in longer term positions. But usually in longer term positions, stop losses have to be kept with a liberal sense of things. Say below 200 day moving avg or 3 months low or something like that.

Most strong uptrending stocks dont usually go below 25-30% from their recent tops, except in cases where the top is a whipsaw top. (one may consider a closing price for purpose of calculation of all time high and then calculate appropriate stop loss.).

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@DEEPAK_AGARWAL

The question reminds me of a few lines of a ghazal. … :grinning:

ishq ka karvan chala bhi nahi aur abhi se gubar ki baatein.

gubar is dust in the eyes. The journey has not even fully begun and you throw dust in the eyes. :grinning:

If the API story is going to end it will in all probability end with a bang some time in the future. But for that valuations have to go haywire. Currently it does not seem so. The only probability I see is the earnings momentum shown in q1 fy 21 by most players not continuing in future quarters. But that is a bridge we cross when we come across it.

e.g Larus, From commentary, it seems if company is likely to maintain its q1 fy 21 run rate going ahead it can report eps of 65 by just extrapolating q1 numbers. (not always advisable to do extrapolation to justify valuatons but this is a hypothetical exercise.) Then based on current levels of around 1050, at around 16 PE, it remains fairly attractive if growth is going to continue for few more quarters. Froth will be when these companies start quoting at 30-35 PE and people start extrapolating numbers 2-3 years in future.

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Sir Wo Kehte hain na be cautious earlier than sorry later , when the real run will come , retail investors like me will forgot to exit and then will fall .
So to keep the narrative in mind , asking for advice at initial stage .
Sir 35- 40 means , if in current perspective people start giving laurus a valuation of 35 pe on fy25 eps , if I am correct

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Hello Hitesh Sir, Do you track Suven Pharma, the demerged entity? If possible please share your views? Thanks

hi Hiteshji
thanks for the reply. what i meant to ask was if the management was convinced of the future ahead and a lot of hard work has already been put in by them and are privy of the result to be declared, considering 32% holding ,i felt ,i in there place would have preferred to increase my holding rather than depledge the pledged shares. before i share the rewards with others ,i would like to have my fill .
could it be they didnt anticipate such a rerating on the stock?
if Lauras follow the trajectory ,it may double from here in a years time max.
if i can see this,A Novice ,how could management not see this?
what am i missing?
they are in the business first to make money nfor themselves first. right?

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@hitesh2710 sir your view on lincoln pharma post it’s results?
became net debt free and i guess its the cheapest pharma stock

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@hitesh2710. Aarti Drugs announced bonus 3:1 and the stock up 20%. Do you find in any way bonus having effect on shareholders apart of increasing float?

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My view is not going to be a fraction as insightful as Hitesh bhai but I will just give my 2 cents .
Hitesh bhai has earlier mentioned in this thread that promoters holding for technocrats founders may be less as they would require funding for growth as they are self made and hence need to get access to pe funds or other investors for capital for funding fast growth and this would reduce their shareholding .
Besides they may also need to pledge their shares .
Nothing is to be seen or judged in isolation .
Besides promoter holding the shares from a very initial stage and hence may like to diversify their investment instead of putting all eggs in one basket .
Besides there are several cases where increased promoter holding has not resulted in increased company performance eg ccl products
Besides there are some companies with high promoter holding that has gone bust also .
Another thing to observe is promoter holding has been low since long but company has been performing.
Instead of judging why promoter isnt increasing , it’s always better to judge the present scenario and the performance of company as the earlier will have lots of possibilities the answer of which Is not known.
Not for laurus, but in general, My personal short experience is that a lot of time too much focusing on one issue in isolation has made me lose many multibaggers .
As all individuals are not perfect but sometimes as we go close to a person and come to realise their goodness or otherwise , so is the case with companies. If all things are perfect and seen , the valuation would be very high and multibaggers are generally obtained where one knows what to ignore and has some unclear things though theres a risk too and one should try to learn what to ignore . I am trying to learn this from Hitesh bhai and am too at a very initial stage
Also request you to read the whole of above thread in case you have yet not done so as it’s a goldmine of practical insights which are not found elsewhere and which Hitesh bhai was so kind enough to share after devoting lot of time . It’s highly recommended
Disc- invested and my view may be biased . Pls do your own due diligence and am not a sebi regd investment advisor . Am an amateur and my view could be wrong

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