Kalpesh's Portfolio

Hello Value Pickrs,
I am 35 year old businessman, execute water supply projects such as Electro-mechanical works of pumping stations, distribution Sub-stations etc (Gov. tenders), I was also dealer of electric motors(Bharat Bijlee) and pumps(Wilo Mather & Platt),

After running successful growing business for several years I slowly lost interest in running it mainly due to quality of people (customer) I had to deal with, so I was looking for something else to do.

After reading investment books I developed strong interest in analysing and valuing listed businesses. So I started to gradually increase time for investment analysis/studies and reduced time allocated to business activities, for 3 years I gave up growth and only bid for profitable orders and happily watched let go of many of my previous orders (did not bid). Had to continue with business for 3 years parallel with investment studies/analysis to have some income source for yearly family spending’s.

As business activities reduced, working capital got free and started investing this capital in listed securities since 2019, in 2020 covid sell-off my portfolio went down 55% on 23rd march. During that time I had mixed feeling to do either what is rational (as per my reading knowledge) or sell off as market can go down even more in uncertain economic times. I decided to keep away emotions from investments and took former option.

From the books/ letters/ blogs I read I think I’m more influenced by warren buffets technic of measuring portfolio results by looking at progress made by businesses you hold rather than price performance. As said in 3 idiots “Kabil bano, kamyabi zak marke piche aayegi”, same way focus on business performance, price will follow sooner or later.

I’m not a buyer of either value investing or growth investing side but invest solely based on future (owner’s) earning discounted to present value, the more margin of safety the more I like it. Growth is simply an important component of my calculation of value.

My investment thesis usually is to find a capable & rational management, running a business with good or improving economics, doing things differently than peers, and available at discount to intrinsic value.

Purpose of this post is to give & take knowledge and improve investment skills.

My portfolio with rationale as below,

1. Time Technoplast ( 20% of portfolio as on 18-3-2021)
Market leader in packaging in almost every country they operate, share of value added products is increasing so ROE, ROCE will increase in future. Stable business economics and growing.
Was available at deep discount.
Avg. buy price: 37.98

2. IDFC First bank ( 11% of portfolio as on 18-3-2021)
What is hidden under the book of financial institution is almost no one knows, so I think bet on financial institution should be based on honest & capable management.
Past track record of capital first, increasing share of retail assets & liabilities, management walking the talk, doing things differently than other banks (I like it most), legacy pain going away gradually.
Was available at discount.
Avg. buy price: 38.32

3. KG Petrochem ( 11% of portfolio as on 18-3-2021)
Techno-savy management (Father-son team) running the company,
Manufacturing and marketing of Terry Towel, Made-ups & Garments etc. in the international market as well as domestic, a fully computerized system maintains uniformity of quality, strength, colors, printing and any other customer specification. Supply to customer like Walmart & Saturday knight ltd., - good growth potential though competitive industry.
They entered Technical Textiles in 2018 - Manufacturing of Artificial (PU) leather, I think less competitive industry and high demand, a business with good economics.

Was available at deep discount.
Avg. buy price: 183.57

4. Vipul Organics ( 20% of portfolio as on 18-3-2021)
Its highly unorganised industry.
Due to strict environmental regulations in western developed world, polluting dye & pigment manufacturing shift to Asian countries,
Again due to implementation of strict environmental regulations in India, small unorganised players are going out of business and only handful of organised players will have all the market share. (Installing & running Effluent treatment plant is not economically feasible for small/unorganised companies)
Company recently completed capacity expansion (6 times existing) and now doing backward integration capex.
I think this 6 times capacity will absorb immediately in 1-2 years as even after such a large expansion it’s like a drop in ocean. (World fourth largest producer Sudarshan Chemicals have just 3% global market share, we can imagine how big unorganised sector is)
Global large players going out of business, this means their customers have to buy from Asian low cost manufacturer’s further scope of easy growth for Vipul

Environmental regulations act as an entry barrier as small manufacturers can’t afford Effluent treatment plant

Operating leverage will kick in due to expansion, backward integration & economies of scale

Improving economics of business from last several years and this trend is expected to continue.
Was available at deep discount.
Avg. buy price: 114.07

5. DHP India ( 10% of portfolio as on 18-3-2021)
DHP India Ltd is a Kolkata based ISO 9001:2008 certified company in the manufacturing of LPG regulators & accessories used for various LPG applications.

Many years ago company realised that by selling these products in India, they will have to face intense competition, low profit margins etc. so they decided to export finished products and only sale the machining scrap in India. This strategy worked very well for them.( Doing things differently, I like it)
This is a promoter run company and promoters have skin in the game with whopping 74.37% shareholding. They have strong and varied range of products as per requirement of varied markets, their products are of high quality & safe which is the requirement of quality oriented foreign markets, at the same time they sell it at affordable prices which gives them edge over foreign manufacturers, as manufacturing in India is cheap due to cheap labour, electricity & incentives from gov.
There is also need of a various Licenses and certifications required from each country to manufacture or sell such products within that country for specific technical requirements & safety measurements, gives another advantage to company, as it has already obtained such licenses & certifications in various countries. (Entry barrier for competitors)
The future global market is very optimistic relating to LPG Appliances.
Growing trend for consumption of Low Pressure Regulators & Gas Appliances.
Expanding into newer untapped markets.
Company is confident of obtaining satisfactory orders in the coming years.
Only issue is that management seems not a good capital allocator, as its generating high free cash every year and management has no clue what to do with that, if they do anything stupid with pilling cash, I will sell immediately.

Was available at discount.
Avg. buy price: 420.48

6. PPAP Automotive ( 13% of portfolio as on 18-3-2021)
Market leader in sealing systems,
Management seems rational with capital allocation, and at constant endeavour to save expenses.
Cyclical industry but economics of business are good.
Was available at discount.
Avg. buy price: 259.97

7. GNA Axle ( 11% of portfolio as on 18-3-2021)

Manufacture & supply axles to tractors in domestic market and to commercial vehicles in western markets
Lowest cost producer,

Taking market share away from competitors (Foreign competitors going out of business)

Margins improved from 13% to 15-16% due to latest machinery/automation & other cost cuttings, which seems sustainable

Price pass on mechanism with customers

Very high temp. in forging as high as 1000 degree C, not a good condition for workers, so robotics & automation gives advantage over informal companies

Cyclical industry
Was available at discount.
Avg. buy price: 264.99

8. NBR Bearing ( 03% of portfolio as on 18-3-2021)
Tie ups with auto OEM’s for customised bearing, so its long term association
Competitors can’t just get in, high entry barrier due to customisation
70% market share in domestic Needle roller bearing market
Strong R&D
Rising exports
Cyclical industry
Was available at discount.
Avg. buy price: 70.31

Today my portfolio value has increase to the point that if I sell out 65% of equity investments and invest that in fixed income instruments at 8% returns, all my yearly expenses will be covered. So I finally closing down my business activities entirely.

Your valuable suggestion and views are invited


I cannot comment on your PF, as I don’t follow any of them. I would like to say about this though.

You said if you sell 65% of your equity and invest the amount in fixed income at 8%, your yearly expenses are taken care off and you are closing down your business.

Would your fixed income returns forever take care of your yearly expenses because your expenses may increase and your return on fixed income will more often than not decrease and not remain the same, and what kind of fixed instruments will give you 8% return today with absolute protection of capital? Even if there exists any such instruments you may not get the same 8% return going forward as the economy matures, and there is the tax if applicable.

How would you increase your allocation to your existing holdings or buy new stocks as your business will be closed and there will not be any cash flows from here?

I know that it is possible to take care of expenses completely depending on fixed income part, but there should not be an iota of doubt here regarding the math, there is no place for discussion in this matter.


I came across your post and really liked your introductory note, quite similar to my story. We share two common stocks only. Will not comment on good bad, just here to say good luck to your investing journey. Thanks.

No comments on your portfolio, hope you have done enough research before investing.
you have invested all in small cap which are high risk, high reward and one should not depend on these for a day-day living. In the long run they may create wealth but will be volatile in short term.
if market crashes and these stocks loose value, will you able to hold for long with out a panic selling?

If you do not have any other source of income, before you exit your business, need to take care of few years of living with a reliable source of income.
You need to have a portfolio where you invest some part of your money in fixed instruments. hope you have planned for the same.

10 year Gov. G-Sec yield is 6.3% currently which is very safe, so I think there will be opportunities in the debt market with good public ltd & PSU companies.

The Idea is to generate cash from equities, for e.g. I had biggest position in NRB bearings it ran up 60%, I sold it and bought PPAP & KG Petro.

Thanks a lot

Please do it, that will be appreciated.

Same to you sir!

True that

I consider volatility as no risk, as long as business is improving & undervalued. It gives opportunity to invest more.

I have some receivables and Security deposit refunds pending, which will be enough to take care of my two years of expenses. I used market crash of 2020 as an opportunity to reshuffle portfolio.

Yes. Idea is to create wealth in next 2-3 years and then shift some portion to fixed income instruments corresponding to exact yearly needs (dividend income will be like bonus) and keep maximum in equities to continue to create wealth.
I hope this works out in near future.

Expecting to generate cash from equities is risky, at least with small companies. If they are large good dividend companies like PSUs or FMCG companies, otherwise I don’t think we can expect to generate cash with certainty. It should be other way around. Debt generates cash flows which can then be invested in equities.

Yes, your stocks may turn out to be winning bets and may give you very good returns, I don’t know about them but if they get stuck and do not move, you may experience no cash flows for a couple of years or even more and may even want more cash if you know about the companies well, so want to to invest more.

My point is, have a robust debt plan that takes care of all your expenses for at least 10 years and then invest/trade in equities as you wish. The ideal situation is be that debt generates more returns than your expenses, and the extra will go into equities.


Great story, all the best for your portfolio.

If I may just highlight that most of the companies in your portfolio are microcap and at least for me are not in industries that I can be excited about. They may be stable growing businesses but will never become huge businesses, at least in the next 3-5 years you have set your investment horizon as.

If I were to put myself in your shoes, I wouldn’t be comfortable having all my wealth in 10-20 small cap stocks while not having a stable pay cheque coming in every month and having dependents like family, parents.

This is just my 2 cents and your risk tolerance maybe completely different than mine.

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Vipul Organics allotted 18,25,000 new equity shares of Rs. 10/- each fully paid up of the Company to the shareholders of Efferchem Private Limited pursuant to the Scheme of Amalgamation of Efferchem Pvt. Ltd. with the Company on 30th June, 2020 . Consequent to the above allotment, the Paid-up Capital of the Company has increased to 95,49,500 shares of Rs. 10/- each fully paid up. This lead to 31.3% equity dilution.

Director of Efferchem Private Limited is the promoter of Vipul Organics. This increased promoter holding of Vipul Organics from 54.50% to 63.20%, reducing the public holding by 19.1%.


Further, the company allotted the 7,00,000 Warrants convertible into equal number of Equity Shares of Rs. 10/- each of the Company at an issue price of Rs. 111/- per warrant (including premium of Rs. 101/- per warrant) on preferential basis to the promoter and promoter group upon receipt of 25% of issue price from the allottees on 23rd February, 2021. The above warrants entitle the allottees to apply for and be allotted equal number of equity shares for each warrant held by them on payment of balance 75% of the issue price within 18 months from the date of issue of these warrants.

This will further dilute equity, increase promoter holding and reduce public holding.
Any thought regarding this is welcome.

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Great introduction :smiley:

I have met management of time techno twice. They have big plans and probably will be only guys in their upcoming products (i.e composite needs more acceptance, CNG cascade, urea tanks etc.) if they get accepted and they scale it well. I am tracking this one.

IDFC bank : Even i am an investor in this one post the management change :slight_smile:

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First of all congratulations on your success so far. This is indeed dream for many and from your post it seems this was a important target achieved.

Now that it’s achieved, why do you still want to continue with these microcaps, as many have pointed out the risks involved? I agree you know everything about them, their business …but at end of the day do not actually own them and call the shots… Agree owning their shares, and if all goes right with business, economy and you also take right sell decisions, they can create tremendous wealth for you going ahead…but what if things go south, and rather suddenly…?

If you don’t want to put significant percent in debt, how about putting significant part in some stable mid/large caps, maybe some dividend plays as well?

I maybe completely wrong in my assessments and ideas, but from your post seems like a great milestone reached and maybe capital preservation strategy needed?

Congrats on the great achievement once again

Vipul has a conservative management, they don’t want to overburden their balance sheet. because there is going to be huge requirement of working capital in next 1-2 years, right now they don’t generate much cash internally so they will have to go for external funding requirement.

They are diluting shareholders equity right now and keeping balance sheet light so that they can borrow working capital from banks later, which is exactly what I would have done if I were in their shoes.

Recent issue of 7,00,000 convertibles will be entirely absorbed by promotors and this cash is going for backward integration, which is need of hour as their recent capex is already commissioned, up & running.
This is good as company is need of cash and promotors providing it almost at market price, and they will have to infuse funds almost immediately.

Everything else is deep discounted in price.


Thank you sir!
I think Time Techno is one of the most R&D oriented innovative company of packaging industry in our country.
They have CNG cascades which are manufactured by only one player in world apart from them. This is a new market in the making as steel cascades have many disadvantages relative to composite cylinder.
apart from that what I like is they are acting very rationally right now,

  1. Getting rid of unrelated businesses
  2. Focusing on value added products
  3. Focusing on improving ROCE & reducing WC cycle going forward.

Promotors are not hungry for money and drawing approximately only 1% of PAT all together, which shows they are more interested in growing this business rather than drawing cash out of it.


Thanks you sir!

Yes that may not happen, but even if they become micro cap to small cap it will be huge, lets forget that, even if they come to their fair value that will give good acceptable returns.
I look at businesses with improving economics, which will generate more owner’s earning in future and available at deep discount.

I accept that focused portfolio will be very volatile, I have tried to put that in my psych so that it wont bother me much psychologically.
If you ignore volatility, focused approach is much more beneficial than diversification.
Having 30-40 stocks for the sake of less volatility will affect in less capital appreciation.
If i have to ever go for 30-40 stocks, why bother doing all the hard work, I would simply invest in Nifty 50 or Sensex 30.

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Thanks a lot sir for your kind words!

Reason for sticking with these businesses is simply they are great businesses in my views.
Large caps are usually tracked by lakhs of investors, so getting into these excellent businesses at attractive prices is mostly not possible.

Whereas small caps/microcaps are generally neglected by most mutual funds/FII’s/DII’s because they can’t put their thousands of crore’s in 100/200/500 cr market cap companies, and almost no analyst tracks it.
So it is possible to find “good to excellent” businesses trading at totally irrationally low prices.
It gives tremendous advantage to individual investors like us to find unknown gems early, where these big people would want to invest later.

Dear Kalpesh,
Your opening story is Very interesting, few points i want to outline , which may be helpful to you:

  1. it is good that you experienced, 2020 fall, in order to develop bare minimum understanding about it, 10 years of experience is must. So, do not put all your capital in one go, phase it out over the years.
  2. I am very uncomfortable with 20-15 % allocation to these small caps. Personally, i do not know much about these companies, but if story is very interesting, i will allocate 1-2% to these companies. Do not go by stories, almost always these are traps.
  3. Longevity of the businesses , you must take into account, if you can sit with your investment for 20 years , even in moderately growing business, you will make hell lot of money.

Thank you & Good luck



Given 8% return on 65% of folio is sufficient to cover annual expenses, it means your PF provides 20x cover. Also, given there are other sundry receivables, as some buffer. This is quite a courageous threshold and looks like you know what you are doing.

I doubled my holding of Vipul based on your high conviction level and that has already given me very good returns, and seems a low downside risk also.

Just added GNA axle also, though near ATH, seems to be consolidating, with respectable DII holdings.

What is your growth story behind DHP? Can they really scale and grow bottom-line at a good rate? Was invested for few months but nothing was moving and small scale was worrying.

It looks as if Time is finding it difficult to really grow bottom-line, while plastics manufacturers have made hay due to low crude, maybe they were hit by holding inventory. Will composite gas containers be in less demand due to city-gas? Was short-term holder here too as business seemed decently priced.

Microcaps bear the worst when the cycle turns, though we must focus on our individual conviction bets, leaving aside the broader markets. So I agree with your convictions overall, just maybe little more diversity may help, cap-wise also.

Maybe add some stocks which have missed the current rally, will add to the margin of safety also?

Best of luck!


Thats right sir and thank you for your kind words.

Vipul is a growth story and I’m looking at it as a continuous unfolding movie, if I see anything wrong like capital investment decisions/corp gov issue or anything else which I dont think good for long term, I’ll exit immediately irrespective of price.
But right now I don’t see any such problems and management seems rational.

GNA is doing great in terms of the business, even in overall auto industry downturn they did quite well.
If EV comes faster than we think, their business will be in risk,
but I think, other alternative fuels like CNG is also growing and petrol/diesel vehicles will be around for many years to come,
so EV is not significant risk but stock market participants can unnecessarily give low PE under the fear of EV.
So I’ll be riding this cycle only.

DHP has an honest management, for growth it doesn’t need much capital, so free cash flow is very high. they are already generating owners earnings at high ROE.
I don’t know whether they will generate growth or not, but management is confident on growth. They are small company and world is an open market, so growth is possible.
Suppose we have a business partnership offer from a family/friend circle,
which will be run by existing owner who is honest & expert in respective field and business model is excellent.
suppose business is generating Rs.100/share owners earnings per year and had Rs. 500/share cash in balance sheet and there are good chances of growth in future.
He is offering it for Rs 1000/share what should we do?
Definitely we will take that offer.
because we are getting business at effective per share price of Rs.500 which is generating Rs100 every year which is very attractive deal for a company with wide moat and good growth possibilities.
Return of capital in just 5 years without any efforts.

Promotor & MD Asheesh Dabriwala has recently received gift shares from his father & mother, after this restructuring of shareholding I’m expecting them to dispose pilling cash in balance sheet through dividends.

Time techno is very steady business with a good moat.
Management has guided for ROCE to increase 20% in three years, this will help increase bottom line, & topline will also grow with GDP growth rate.
In terms of valuations in my opinion it is available at deep discount even at today’s price.
CNG cascad has two major customers,

  1. Automobile manufacturers ( CV’s & PV’s) - for fuel(CNG) tank
  2. Oil marketing companies - for CNG stations they need 3 cascad vehicles per station. ( Gov planning for 10000 stations)

From concall transcript -
traditionally, as said, it’s been used in type-I or steel cylinder, and a truck can carry about 4,500 liters only, whereas when they use type-IV or the composite gas cylinders, they can do close to about 9,000-odd litres of gas. So you can carry two times more at almost the same or reduce costs. So obviously your operating cost comes down by half. That’s a phenomenal advantage that we see. And secondly, because of the fact that the cylinders are much lighter, you will be able to travel a longer distance, so the reach out to CNG gas becomes much farther and you can reach larger destination.

The government has given the two directions; one is 7,200 mobile stations by 2024 and another, Mr. Narendra Modi has also announced 10,000 CNG filling stations. And one thing just ballpark figure I’m telling you, 10,000 filling stations, every station needs three cascades, one always should be made available at the station, one in the transit, one at the production level of the gas. So, it’s a very large market. If you work out in terms of the figures taking this cascade of Rs.60 lakhs, it is worth more than Rs. 10,000 crore business in the next six to eight years time.

Bharat Vageria: In composite product, world over, there are two companies; Ragasco and we are in India. In
India we are the only one who got this approval, but the other products of CNG cascade available is a metal cylinder. But advantage of composite cylinder is more because of running
expenses, per liter gas is very less

Thats true

many of stocks I short listed I missed the rally :joy: like
Shaily engineering plastics
APL Apollo
Bharat rasayan
mistake I done was waiting for my predefined price, I became greedy as already enough margin of safety was there but I wanted to buy at even lesser prices.
Switching money from businesses who are trading overvalued and having no long term positive prospects is good idea,
and buying businesses which are having good long term prospects and available with some margin of safety is good idea.


Dear Sir

What is your selling strategy either for profit booking OR stop loss ( Fixed SL / Trailing SL)
Is it common for all stocks OR you have different brackets for each stock you own.
Kindly elaborate