Lakshmi Narayana Portfolio - Long Term

Hi Folks,

Happy New year!!

I have been using VP forum since 2013 and started my investment journey in FY12.

And I would like to thank VP team for providing such a great platform to learn about stock markets and also for the in depth info/analysis on different companies.

sorry, if my rationale for investment info is not capturing the more details,but i’ll share my thought process if anyone is interested in any of my portfolio stocks.

Currently am not looking for any changes to the portfolio but i would like to keep the max size of stock to 10-15% of PF and if anything breaches beyond that i’ll trim my positions based on the stock valuation and the available opportunities in the market.

As am a long term investor and would like to hold stocks for 5-10 years if underlying business is good with strong moat at a reasonable valuations.

For generating the extra alpha to PF, i take some contrain positions with PF position size of less than 2-3% and would sell once it reaches the peak value.

I would like to be more happy by taking your valuable suggestions and feedback!!

2017 Exits

Eicher Motors ~10X
Amara Raja ~ 4X
Finolex Cables ~ 2.5X
Torrent Pharma - 10% CAGR
Pidilite - 3X
JB Chemicals -3X

** 2017 New Entries**

Piramal Enterprises
Pennar Industries
PNB housing
Prakash Industries

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Hi. Maybe you need to pay more attention to number of stocks you have. Even with avanti and mannapuram you have not beaten the broad market. Would like to learn from you your rationale

Hi,
Thanks for taking time and replying back on my PF thread.

I strongly feel 15-20 stocks are good enough for a portfolio and my top 10 holdings currently occupied ~76%.

Avanti Feeds is a very well known and proved business and growth is also not slowed down and still have a potential to grow 20-25%CAGR if their expansion plans and new business verticals delivered as planned.

And comming to Manappuram am happy with management and thier risk free gold business.They had recently ventured into different lending business like MFI,HFC,SME, Truck loans and they want to increase the non gold loan business share to ~50% in next 3-4years.
Their TIER1 capital is around ~30% and as per RBI it should be minimum 12% for NBFCS so they don’t require any additional capital for next 2-3 years but more interesting things to lookout are Rural economy recovery and growth in new business verticals.

And coming to PF returns am MORE MORE happy with 24-26% CAGR for a duration of 5-10years.

Luckily I got ~29% CAGR for 5.6years for next 5 years even if I generated 24% returns I’ll get around 26% CAGR for 2012 to 2022 period.

Btw this is not my full time job and I have other things to do so am having another PF investments in Mutual funds but currently it is just 16% of my total portfolio and am using that for goal based investments for a very long term of 15_25yrs and MF invesments might occupy 50% of my total invested PF in next 10years.

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The CAGR numbers you aim for may be sustainable but you will probably have to keep rebalancing
For eg CAN FIN homes by many parameters may have peaked and may not appreciate at the same rate going forward - compared with peers they seem more highly valued
Peer Comparison Of Top 7 companies in the same business such as LIC, Indiabulls etc show their numbers as high PE, CMP/BV and high D/E But growth numbers have been good.

So a close watch and rebalancing with more prospective companies will be needed but I Guess you know and are doing that already

Hi,

Happy New year!!

Thanks for your response!! Yes in terms of My growth canfin is slowed down but will see next 3-4Q how it is going to utilize the Housing for all scheme.

In lending business along with growth asset quality is also very important and from quality stand point canfin is very good.

I recently bought PnbHosing and it growing at 30-40% but need to track thier quality of assets in the comming cycle.

Regards,
Lakshmi Narayana

You should increase your allocation towards Pennar Industries.
It is a sleeping giant.
It will be a massive wealth creator if held for the next 3-5 years.

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Thanks for your feedback, i do SIP once It started delivering the projects as expected.

As Prakash Industries got approval for demerger and also delivered good Q3 results , i added few more shares and looking forward to increase it size to 7-8% of PF

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LNji, you are missing out on having portfolio names that are in the Large Cap category. With India being in growth mode, you want to have a mix of that just as you see what is happening right now.

There are folks that have their portfolio sitting at New High historically, and others are down by 25% since they were focused on Small Cap and/or Mid Cap.

I believe in a similar portfolio build with multi-sector, Large, Mid and Small Cap, and a Long Term Buy and Hold. All Buying is in SIP mode and all Selling is in SIP mode.

Hope moderators like this comment and allow it.

KKP

Hi,

Thanks for your feedback ,except Piramal and HDMC AMC i haven’t made any new invesements in last 8 months and also sold some portion of Avanti,Canfin and Prakash Ind.

Btw this year am completely moved to goal based investing using direct Mutual funds.

Now 50% of my PF consists of mutual funds.

Do you forsee less growth with Avanti? I feel its a bad weather in shrimp industry overalll around the globe. Feeder for Shrimp is soya (price is lowering), hence there is potential savings on operating cost. What’s your opinion on the same.

Yes, it might face near term challenges.

It is still forming >5% in my PF.

Recent updates from My portfolio Perspective.

Completely Exited from Cera, PI & Prakash Industries,

New additions to PF CCL Products, Yes Bank During recent fall and Johnson Control.

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Due to recent market developments and some personal needs, i have trimmed down my direct equity portfolio and also taken a conscious decision of not to hold more than 15 stocks in the PF and make sure that top 10 constitute 75-80% of the PF and also maximum sector weight to be 25-30%.

As mentioned earlier, i have moved my investment strategy to Goal Based investment strategy by investing in Direct Mutual Funds. Hence my direct equity investments were just below the 35% of my combined Equity PF which predominantly consists of MFs.

Though my direct MF portfolio returns are below par compared to my direct equity investments , I would like to stick to the Goal based strategy linked with Mutual Funds.

ScripCode Percentage Category
Piramal Enterprises Ltd (XBOM:500302) 16.72% CORE
Manappuram Finance Ltd (XBOM:531213) 14.71% CORE
Tata Elxsi Ltd (XBOM:500408) 12.23% CORE
CCL Products India Ltd (XBOM:519600) 10.42% CORE
Can Fin Homes Ltd (XBOM:511196) 9.67% CORE
KEI Industries Ltd (XBOM:517569) 8.81% CORE
IDFC First Bank Ltd (XBOM:539437) 5.32% CORE
Oriental Carbon & Chemicals Ltd (XBOM:506579) 5.01% CORE
Avanti Feeds Ltd (XBOM:512573) 4.93% Satellite
Acrysil Ltd (XBOM:524091) 6.12% Satellite
HCL Technologies Ltd (XBOM:532281) 3.57% Satellite
Aimco Pesticides Ltd (XBOM:524288) 2.50% Satellite
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Sold most of my winners in last upmarket and in sidelines to add new or accumulate existing stock during downfall but didn’t get many opportunities, started adding new stocks to my Portfolio in last six months.

Here is my current portfolio, as mentioned earlier I had moved most of my investments to MFs as part of my Goal-based financial planning.

Am investing in the below stocks as part of my retirement target and to follow the markets and trends.

Company name % of Total Comments
Acrysil Ltd. 19.3 Core
Kei Industries Ltd. 18 Core
Piramal Enterprises Ltd. 14.36 Core
ITC Ltd. 12.37 Core - Dividend play
CCL Products (India) Ltd. 10.52 Core
Biocon Ltd. 3.77 Core
Prince Pipes & Fittings Ltd. 2.41 Core
Pidilite Industries Ltd. 1.87 Core
Aimco Pesticides Ltd. 3.52 Satellite
Avantel Ltd. 1.25 Satellite
Valiant organics Ltd 1.01 Satellite
Bank Of Baroda 3.73 Value
Manappuram Finance Ltd. 3.38 Value
HCL Technologies Ltd. 2.76 Value - Dividend play
Axis Bank Ltd. 1.73 Value
![image 557x465](upload://zqDNBfgU4ZXPxOpRsBzbXmU1dJk.png)

In addition to this am tracking/following these stocks HDFC Twins Merger, LTI-Mindtree merger, TechM, ICICB, MAS Finance, AU Bank, and Tata Consumer.

Piramal is the bigger lagger in my PF, waiting for demerger to happen.
Planning to increase my allocation towards banks.

I am here to update my recent Direct equity portfolio which is 20.6% of my total Financial assets PF.

When I checked the total direct equity transaction, I saw that I had invested/traded in around 110 stocks in the last 10 years, around 10 stocks per year.

I feel it is quite a decent number from my perspective and am trying to minimize it to 5-6 stocks per year.

Company name % of Total Holding Period Column1
Kei Industries Ltd. 15.51 6-10 Years Core
Newgen Software Technologies Ltd. 11.36 2 Years Core
Carysil Ltd. 7.49 6-10 Years Core
ITC Ltd. 6.92 >10Years Core
CCL Products (India) Ltd. 6.33 6-10 Years Core
Laurus Labs Ltd. 6.32 <1Year Core
Avantel Ltd. 4.51 <1Year Core
SRF Ltd. 4.25 <1Year Core
AU Small Finance Bank Ltd. 3.34 <1Year Core
Tata Consumer Products Ltd. 2.98 2 Years Core
Bank Of Baroda 2.84 3-5 Years Core
Axis Bank Ltd. 2.49 3-5 Years Core
Manappuram Finance Ltd. 2.35 >10Years Core
HCL Technologies Ltd. 2.33 3-5 Years Core
Radiant Cash Management Services Ltd. 2.03 <1Year Core
Prince Pipes and Fittings Ltd. 1.88 3-5 Years Core
Piramal Enterprises Ltd. 1.8 6-10 Years Core
Valiant Organics Ltd. 1.4 3-5 Years Core
Orient Electric Ltd. 1.25 3-5 Years Core
Piramal Pharma Ltd. 2.58 2 Years Satellite
Rico Auto Industries Ltd. 2.31 <1Year Satellite
Biocon Ltd. 2.12 2 Years Satellite
Restaurant Brands Asia Ltd. 1.99 <1Year Satellite
Apex Frozen Foods Ltd. 1.66 <1Year Satellite
Goodluck India Ltd. 1.6 <1Year Satellite
Top 5 Holdings 47.61%
Top 10 Holdings 69%
Period XIRR
1Yr 45.50%
3Yr 32.90%
5Yr 27.50%
10Yr 18.20%

Coming 6 months plans: Exit BOB, Rico ; Add: Carysil(If came ~700), Radiant Cash(~70) and small cap IT stocks(Still studying)

Mistakes: Price Anchoring Bias - Not being able to increase the holdings when earnings and prices are going in proportionate.
Taking too much time in deciding to take a position in a value stock and leaving the stock after a 20-25%price hike after researching.

As I moved to goal-based investing, most of my investments were in EPF, NPS, MFs, and FI/Gold.

I would like to move my direct equity PF to 25% from my current 20% and total EQ in PF to 70-75%from 65% in the next 5 Years.

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If possible, pls share your Mutual.funds portfolio also and their XIRR returns.

Actively investing in only 3 Funds ( PPFAS Flexi cap, Mirae ELSS & Mid-cap)

Fund Name % of Total
Parag Parikh Flexi Cap Dir-G 36.56
Mirae Asset ELSS Tax Saver Dir-G 18.02
Mirae Asset Large & Midcap Dir-G 16.46
Mirae Asset Midcap Dir-G 11.7
Motilal Oswal ELSS Tax Saver Dir-G 6.67
Franklin India Focused Equity Dir-G 6.39
Franklin India ELSS Tax Saver Dir-G 2.2
Quant ELSS Tax Saver Dir-G 0.81
Period XIRR
1Yr 39.90%
3Yr 21.80%
5Yr 22.10%

In the Goal Sheet, I keep Expected returns on EQ are 12% & 8% for FI/GOLD post-tax

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