I am 31 years old IT professional living in Bangalore. I am new to the investing world. Recent Market crash in March provoked me to get into stocks. My time horizon is long term, creating this portfolio for my daughter. So I am looking at 10-20 years from now. But I am ready to track the portfolio periodically and do any adjustments then and there.
I have gone through all the videos of Saurabh mukherjea and his team and got inspired his idea of coffee can investing and choosing leaders in each sector.
I am buying stocks from March in SIP mode and plan to continue the SIPs in future as well in the below companies. I humbly request all the members of this forum and seniors to review my portfolio and provide your valuable feedback.
Stock
Avg price
Portfolio %
Background
HDFC Bank
896
26
Leader in the private bank. Consistently growing 20% y-o-y.
Kotak Bank
1300
5
Conservative loan book growth, well run under the leadership of Kotak. Expecting the growth of 15% y-o-y in future.
Bajaj Finance
2384
12
Leader in the NBFC space.
Asian Paints
1761
6
Leader in the paints.
Berger Paints
515
6
Runner up in the paints
Pidilite
1378
8
Leader in the adhesives.
Bata India
1233
8
Leader in the Footwear space
Relaxo
600
2
Runner up in the Footwear space
Titan
900
5
Growing middle class consumption theme
ITC
180
18
FMCG + Tobacco, less volatile so I can pledge this stock and do covered call to earn some money additionally
VST
3000
3
Tobacco, good dividend income
Stocks in my watch-list: I will enter once I am convinced and any fall in the price.
HDFC Life - Long runway for term insurance growth in India.
DMART - Its in my watch-list but worried about the competition from Amazon & Reliance.
Dr Lalpathlabs - Tracking and will be adding soon
Aarti Industries - Leader in the chemical space.
I completely ignored
Pharma sector since I couldn’t understand anything about the companies.
FMCG sector since I find the valuations are so high
Specialty chemicals since it went up so high in last 2 years
Auto sector - lots of disruptions going to come in next decade
Although short term gain is irrelevant, I am happy that my portfolio is up by 16%.
Currently my portfolio is financial heavy since I utilized the crash in these companies. Step by step I increase the allocations to other sectors so that financials weight will come down.
My idea was to keep the number stocks within 12-15. If I diversify, I afraid portfolio will look more like index and the number of stocks will exceeds. I agree to not more than 30% in one sector. Eventually I will reshape the portfolio to such break-up.
Tech - I am not liking any Tech companies listed in India. I feel US listed companies are better and well diversified since they do business globally.
Auto - Back of my mind, I have this fear that e-vehicles are going to disrupt many players in the industry. Not sure when that’s going to happen, but any innovations in battery tech is going to disrupt this industry.
Pharma - I started learning the sector. I will look into your suggested companies
Agrochemicals - I have gone through PI industries from this space, but again it went up quickly in 2 years, not sure this is right time to add.
I need some guidance from the forum members that in the same sector, I have this dilemma which stock to choose and which one to ignore. For example.
Private banks - HDFC Bank vs Kotak Bank.
Footwear -Bata vs Relaxo.
Paints - Asian vs Bergar.
All these companies are doing well and appears like 10-20% long term compounding machines. Since I am new to the investing, I find it difficult to choose one over other. If I can ignore some of these stocks, I can replace with other good stocks from other sectors.
IT is one of the most global sector for that matter of fact. It serves most of the english speaking geographies. Mid-cap IT theme is very strong right now as companies need to get build IT (especially cloud) capabilities. The order book for all IT companies is growing strong and is definitely worth looking at. HCL Tech, LTI are definitely worth a look.
Tech - I am not liking any Tech companies listed in India. I feel US listed companies are better and well diversified since they do business globally.
Let me tell you about HCL tech, they operate in 172 countries worldwide, as @Swapnil_Marathe mentioned their order book is growing rapidly, even if you see the past growth rate, HCL has more than 20%.
Tech companies in US - I meant product, R&D based companies like Microsoft, Amazon, Facebook, Tesla as such.
I am not denying that quality IT stocks from India will give good compounding returns. But conventional IT services like Application support, maintenance and testing is going through lot of transformations in last few years after the advent of Cloud, Automation and A&I. Most of the IT companies relies head count growth for revenue growth. But all these latest innovations are to reduce the headcount and do things efficiently with less cost. So unless IT companies transform themselves, I am not sure where the growth would come. IT companies have enough talent and money, but still innovations are all coming from USA only in this space. We have lots of examples- facebook, whatsapp, zoom, instagram…etc list is endless… If we want to play the Tech, we have quality companies in US why to invest here in India.
Even I feel the same about Indian IT space. Almost all of the listed companies provide facilities which are mostly in nature of support and outsourced jobs, or simply service based industries. I don’t feel confident about a tech org unless they come up with a genuine a product of their own, and again what happens when it is in the market competing against the big fish, is a different story. Overall, I don’t feel strongly for the IT cos.
On Indian IT space I agree that there is no MOAT but there are two trends we have to look at. 1) many of these companies are transitioning to product companies and can be big winners or can be bought over by US companies (such as Majesco). 2) post COVID, any business that was not digital, has no other option to come digital, think cloud and derisk themselves. No large company can implement cloud or go digital without a service provider (many indian IT companies have partnership with Amanzon, msft and Google for implementation). There will be a sectoral tail wind. Is there one company that can be big winner: no; can IT as a basket give good returns: Yes…
