Hitesh portfolio

Q&A: Questions & Answers Portfolio Q&A
1141

Hitesh,

I’m trying to compare capital allocation in something like Deepak Fertilizers with investing additional capital in Ajanta Pharma.

  1. Upside levels - Deepak = 30-40%; Ajanta = 40+%

  2. Conviction - Deepak = Low; Ajanta = High. You’ve been tracking for a long time.

  3. Capital Preservation & opportunity cost - Ajanta has been a wealth creator, so even if the stock does not behave as we expect, over time we are much more certain to preserve the invested capital. Whereas Deepak has not been a wealth creator historically with low returns on capital.

  4. Learning - Deepak teaches a lot more about the markets, because of it’s unknowns.

The above are the 4 parameters I can think of when deciding portfolio allocation. What do you consider, and how do you rate Deepak vs Ajanta on the parameters?

Thanks,

-Prasanna

1142

Hitesh Bhai,

Is INOX a good buy after this recent fall ? or it is better to wait and watch for some time. How do you see it fundamentally. Also share your opinion on entering Sintex Industries as well. is it still very much susceptible to INR depreciation ?

1143

Hitesh,

Also your views on TATA Elixi at cmp? Seems management is turning very bullish on this one. They are projecting 40% CAGR for next two years. Can this one quote at higher PE levels than TCS given its lower base and quality pedigree with huge moat just like GRUH quoting at exorbitantly higher valuations than HDFC bank.

Also request your opinion on Liberty, Mirza and tyre stocks like JKTyre. Rubber is quoting at 145rs ( is it time to be bullish ) ? but stocks are going down day by day … any opinion ?

1144

Hiteshbhai,

What is your view on Sintex after its good show in Q3 results. I am looking to invest in it as an opportunistic bet. Is it worth loading now as the price is looking attractive.

Vijay

1145

@pavan… opportunistic bets occupy less than 10% of the portfolio… I usually hold a concentrated portfolio so most of the long term funda bets occupy more than 10% weightage.

@prasanna… bets like deepak are for shorter duration unless some other positive triggers come along… If within a stipulated timeframe I dont get my returns, its usually exit time… for stocks like ajanta, the bets are usually of longer duration unless I feel there is overvaluation due to excessive price run up.

@sandeep… Inox seems to have been hit hard post q3 results… I think it would be better to leave it alone for some time till some fresh triggers are visible. I got stopped out in it mainly as it was a technical pick. tata elxsi I feel is getting in to the expensive zone… regarding mirza, liberty etc as a business these are mediocre businesses bcos the brand strength is not translating into the sales and profit growth seen in other consumer companies.

@vijay… sintex has an overhang of high debt… If u discount that or if u feel investing in high debt companies it seems okay at cmp.

1146

Following up on your answer to Hawkins, do you think with the current results and stock falling below 2000, Hawkins is at the height of its pessmism?The stock has not gone anywhere for lot of quarters and it is only yield that is still protecting it, would it be the best time to enter this stock?

But dont you think, the high brand strength Hawkins enjoyed is decreasing with the entry of other participants in the same as well as allied space?

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1147

Following up on your answer to Hawkins, do you think with the current results and stock falling below 2000, Hawkins is at the height of its pessmism?The stock has not gone anywhere for lot of quarters and it is only yield that is still protecting it, would it be the best time to enter this stock?

But dont you think, the high brand strength Hawkins enjoyed is decreasing with the entry of other participants in the same as well as allied space?

1148

nishant,

hawkins continues to surprise investors mostly negatively but every couple of quarters later, positively… As you say, yield may offer some downside protection.

With the launch of new products slated soon, one needs to see how it translates into profit and sales growth…

with correction from 2300 odd levels to sub 2000 levels, a lot of negativity is priced in. So for someone still with a bullish view, it makes sense to buy. Personally I am holding on for a couple of more quarters… A single quarter of positive results makes up for 2-3 quarters of poor results and thats what I like about the stock.

1149

I would agree with Hitesh Bhai…Lets wait for a couple of more quarters .Hawkins stock seems to have found a base at 2000 odd.

Moreover, had feedback from dealers, Hawkins Plans to launch new induction based cooktops somwhere in this quarter

1150

Hiteshji, thank you for your prompt feedback. It helps so much to understand the point of view of veteran investors like you to get a better perspective. Is the portfolio on 1st page your latest and updated one?

Thank you

1151

Hitesh , when you say you got stopped out of inox , do you mean you sold it?

1152

arjun,

for inox stop was placed at 107. that got triggered so it was exit time.

hitesh.

1153

Hi Hitesh ,

I was going through piramal thread and I guess you were invested in it at some point of time .Since I haven’t seen the same appearing in your portfolio allocation,it will be helpful if you can outline the reasons for your exit .I was thinking about taking a position in the stock so I wanted to know your views for the stock

1154

sourabh,

valuing piramal was proving to be a difficult thing. And then at those times there were so many compelling opportunities for me… So I exited Piramal long back. And in hindsight seems a very very right decision as proven by returns in subsequent picks.

I still find it difficult to make much out of it… Neither have I the inclination to pursue it…One has to consider it as a sort of Berkshire Hathaway stock with Piramal running the show. But I still maintain we will always have better opportunities in future as compared to Piramal.

regards

hitesh.

1155

hitbhai,

It’s been a while since you updated your portfolio. Not sure what has changed in terms of confidentiality etc. but I do request you to share your current picks (not interested in % nos; just the names). It will give us some food for thought.

thanks,

)- HG

1156

Hiteshbhai,

It has been some time since you shared your portfolio. Kindly do - helps us understand how portfolios are refreshed and shuffled. Also please advise the planned holding period or exit trigger or price for stocks in your portfolio. Especially keen on knowing your recommendations for a 5 year period.

regards,

PN

1157

Hiteshji,

At CMP of 348, Poly medicure is trading at a PE of 18.7 with a growth of 25%. What should be the target price for one entering at the current price ?

Regards

1158

hi

current portfolio stocks include kaveri… (booked some profits to maintain the balance of portfolio and added more canfin ), symphony, vst tillers, canfin homes (added more yesterday post results)… these occupy more than 50% weightage

gruh (gradually trimming it in favor of repco), repco , hawkins, deepak fertiliser (new opportunistic bet), ajanta (re-entered), polymedicure, jb chem (partial profits booked). page inds.

basic theme is that for any stock to occupy top weightage, there has to be very good business model with appropriate tailwinds(symphony, kaveri, ajanta ), or glaring undervaluation as in case of canfin.

Most of the above stocks have been discussed theadbare on VP.

Currently adding hawkins,repco, deepak fertilisers in small small quantities.

Hawkins I had put up my logic earlier… Buy it after one or two bad quarters and then a good quarter makes up for all the previous pains. Here its not too important to go too much into the details and nitty gritty of the company or sector. I feel its discussed in too much details ad nauseum.

Repco I feel is going to grow much faster than gruh… Gruh seems priced to perfection.

Deepak fertiliser is a purely opportunistic bet. If things go right for it, it might provide quick returns.

I am still not too comfortable with the state of markets and think we might be in for more pain in the ensuing six months.

@nadakarni… I would prefer to buy polymedicure closer to 300 closer to 14-15 times forward PE.

1159

Thanks for sharing the details, hitbhai.

regards

HG

1160

Hitesh Bhai,

What is the percentage of cash in your current portfolio?

Regards,

Rajarshi