Lazycap's Portfolio - Feedback

1

Hi Valuepickrs

Please read down and suggest. A bit lengthy, appreciate the patience

Equity Holdings as on 2023-12-08. As on today returns could be +2% (i.e. 27%) over what is mentioned here in portfolio table

S. No Symbol Company Sector Qty>1 Yr Qty<1Yr Average Buy Price Last Closing Price Unrealized P&L Pct Invested Sizing Current Sizing
1 ARE&M Amararaja Industrials 100% 0% 554 752 35.7% 5.64% 6.11%
2 AVANTIFEED Avanti Feed Consumer Staples 47% 53% 369 402 8.8% 5.52% 4.80%
3 AWHCL Antony Waste Industrials 0% 100% 245 462.85 88.6% 1.66% 2.50%
4 CUB City Union Bank Financials 0% 100% 121 155.9 28.6% 13.87% 14.25%
5 DELTACORP Delta Corp Consumer Discretionary 0% 100% 145 137.3 -5.4% 1.34% 1.01%
6 GLS Glenmark Life Health Care 91% 9% 419 635 51.5% 4.07% 4.93%
7 HDFCBANK HDFC Bank Financials 100% 0% 1348 1653.2 22.7% 4.27% 4.18%
8 HEMIPROP Hemisphere Prop Real Estate 100% 0% 116 143.05 23.6% 2.72% 2.69%
9 HERANBA Heranba Ind Materials 100% 0% 546 359.15 -34.2% 3.38% 1.78%
10 IDFCFIRSTB IDFC First Bank Financials 100% 0% 39 88.07 128.8% 1.41% 2.57%
11 IGL Indraprastha Gas Utilities 0% 100% 393 401.65 2.2% 4.05% 3.31%
12 KOTAKBANK Kotak Mahindra Financials 0% 100% 1755 1838.45 4.7% 16.21% 13.56%
13 KRSNAA Krsnaa Diag Health Care 15% 85% 419 665.75 59.0% 13.68% 17.36%
14 LUXIND Lux Ind Consumer Discretionary 100% 0% 1939 1371.65 -29.3% 1.42% 0.80%
15 MANAPPURAM Manappuram Fin Financials 100% 0% 111 163.85 48.1% 5.93% 7.01%
16 MATRIMONY Matrimony Communication Services 56% 44% 624 541.05 -13.3% 2.30% 1.59%
17 THYROCARE Thryocare Diag Health Care 36% 64% 539 609.45 13.1% 3.59% 3.24%
18 ZEEL Zee Limited Communication Services 0% 100% 182 278.95 53.5% 2.71% 3.32%
19 Cash 6.23% 4.97%
21 Overall Portfolio 25.2% 100% 100%
Exists Till date Avg Buy Price Exit Price
Cochin Ship 350 1070
Repco Home 155 300 Willing to get back below sale price
Hero Moto 2250 2997
Midhani 180 293
Muthoot 1249 1234

Rough Total Dividend Earned - 2% on invested cost. Added Exit cash back onto portfolio, around 7% of portfolio (on cost basis - Invested sizing) invested is back from realised profits. Will be paying some good tax on exits as all are this FY exits

Core Philosophy:
Could say maybe a mix of Value and GARP, bottom up only. Not sure what would it be going forward but this is what I am following now. I do not study business in deep sense but try to understand what I am paying and how much I can lose/ gain in a rough scenario. Top priority is clean Balance sheet for high allocation bets, bottom allocation is towards deeply mis-priced as per me or kind of speculation

Rational Summary:

I do not read up much deep into companies, rather rely on balance sheet and rough math for valuations and industry economics. All my positions are built over time from April-22 (Started as got savings from corporate) to lets say till -12-09-2023. I do not calculate current XIRR as such but a bit back through m-profit got to know its at 35% or so, feel very lucky that its trending at this level almost similar levels as if mutual funds with SIP done in last two years. I keep holding cash in bank account if I am not sure and this is all my money though not much. No Mutual funds or Debt or anything else. Very short summaries of my rationale shared below for each position

Amararaja: High lead prices and cyclical bottom margins while I bought, not looking to exit as I believe it is still reasonably priced at around 17-18 PE and good chashflow with clean balance sheet. Yes growth has been slow and could be slow going forward as well but optionality of Lithim ion and pretty safe revenue share in replacement market which is kind of here to stay for medium term
Avanti Feeds: Again clean balance sheet with excess cash with optionality of pet care business. Mean reversion play, as current margins are supressed due to resaons we all know ecuador, high raw material etc. Might or might not pan out but if I can make 100% due to favorable conditions within next 1-2 years still the cagr is 20% plus which is decent
Antony Waste: I like their Waste to energy initiative and bought at lows, not sure when to exit but keeping this for now. Yes its a B2G business, but waste is a big issue and might do well if not due to cashflow but due to thematic play as per herd behaviour in the market. Plan to exit if cash flow is not visible in near future. Not high allocation
City Union Bank: High allocation as I believe its tails I don’t lose much but Heads I make good enough kind of bet. Has historical evidence of quality, ROEs, ROAs etc. Growth might comeback as per management guidance by next FY and was trading near 1.1 PB when I got it, Wish to keep long term (3 or more years) if it doesnt run up much in short term
Delta Corp: Pure speculation play based on logic of GST nonsense, Yes management is not great but possibility of 20% plus in a year. In terms of business, no one knows after that GST call. Less allocation
Glenmark Life: I got it due to high dividend yield at that point in time, pretty much value buy with high cash flow, reasonable growth, clean balance sheet and good margins. Related party transaction is sure a concern but NIRMAs acquisition terms might help in short term. Honestly no idea about long term business prospects. Kind of confused on exit as well
HDFC Bank: Evergreen history, got it at reasonable price. Maybe could have had high allocation but did not go that route due to merger
Hemisphere Prop: Asset play due to their land bank, its a pure speculation and no business logic as such. Math is there as Assets are 30% of market cap but market would not recognise unless some business move by management. Exit really not sure
Heranba Ind: Thought good historical growth, capacity expansion but chemical down turn played a spoil sport. Whole industry is in doldrums. Loss aversion preventing from exit. This could be a big mistake in portfolio
IDFC First: Vaidyanathan :slight_smile:
Indraprastha Gas: I think too much negative priced in due to the EV policy bill. Maybe it will not be a 2x bet but very clean balance sheet, always optionality of charging infra setup, new GAs although not much visible volumes. Consider it as better than Cash or FD in current market as there is dividend yield. IGL and KotaK are very recent entries, like in October and Nov
Kotak Mahindra Bank: Kotak exit factor uncertainty is gone, could inch up once the new head at helm proves. Growth is back in whole industry, I kind of like their unsecured loan growth as they are nicely cushioned with high CAR and less NPAs. This unsecured growth helps in keeping the NIM at good enough position and not take ROE drastically down with high CAR. I like that Kotak still holds 25% and believe he wont let it go bad. When cycle turns Kotak will regain old glory is what I believe. Currently trading at low calculations in comparison to its historical numbers
Krsnaa Diag: Comfortable entry price, low valuations due to B2G nature. Need to keep close watch on cashflow, growth would come as contracts are executed. I believe Krsnaa is a business where ROCEs will improve as capex matures into regular business. But who knows what might pan out as we go ahead
Lux Ind: Did not pay much heed to management issues while I got in which was a mistake. Kind of mean reversion play as raw material prices cool down and hopefully when demand is back. I am not sure what to do with this, plan to exit but again loss aversion
Manappuram Fin: Good dividend yield when I got it and low to reasonable valuations. Good management, low NPAs, IPO of Asirvaad, and no red flags in funds (no Commercial papers and other bad stuff for ALM issues). Dont plan to exit
Matrimony: Brand matters in long run. High spends on marketing keeping the margins low, the day this will go off stock will move is what I believe. Yes growth is not there, I got this basis the past and not the future as such. Great management and they are exploring avenues for growth. I think I have high cost price in this counter but happy as allocation is not high
Thyrocare Diag: I believe this is highly priced and keeping for now. Growth is there but margins are not helping in comparison to past, dividend yield is the cushion I see as positive. Pledge removal could playout for short term
Zee Limited: Was lucky to get it at that price and if sony announces merger in lets say next 1 year, will keep it else will exit

Exits till now (More like regret selling as market has run up)

Cochin Ship: Felt too high a valuation and exited to protect gains. Not sure if it was a right move. Opportunity loss of 70% on buy price
Repco Home: Management seems to be doing fine job, was not sure of fast run up and exited. Opportunity loss of around 60% over buy price
Muthoot: Great company, but somehow I felt Manappuram is enough
Hero Moto: Did not anticipate such high growth. Got it during tax claim issues and sold recently before it moved. Opportunity loss of 33% over buy price
Midhani: Again exited due to run up and not comfortable with Defence stories

Now I am confused on what to do going forward now that market is at kind of highs although still might not peak out, not able to find low effort high return picks :). And do not want to pay tax by exiting short term positions. Suggestions would really help me going forward
Also believe none of my portfolio stocks are in overvalued zone, need inputs here. Willing to deploy remaining cash if I find low effort high return picks :slight_smile:
Was Seriously looking at Nippon HSI ETF and Alibaba to buy, but our tax laws are too harsh for outside India investments. LTCG is 20% and STCG is income bracket with 24 months as period

7 Likes
2

Small Update, making a habit to keep record

Sold out Delta Corp as this was a pure speculation bet for me and as results are out GST effect was seen in numbers as well. Q3 being the strongest other quarters could be more bad I guess. Foray into real estate could turn out fine but I personally do not like real estate. Will Govt roll back 28% GST completely I don’t think so, promoters commentary doesn’t suggest as well. They seem to be negative on gambling going forward. Sold with no profit or loss after holding for 3 odd months. Some cash wont hurt

Currently looking for some options to add, PIIND came in radar but not pulling trigger anytime soon

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Portfolio Update

Exited Hemisphere Properties today completely at around 250 a piece, Thanks to Anil Sanghvi (Zee channel - ironically lost all unrealized gains in Zee and holding) scrip has gained in last few sessions due to his coverage in TV resulting in volume spurt with green shoots. I might be completely wrong as results are out tomorrow and many I guess believe some good announcement on Pune land is due. Happy with gains for now made some 115% in nearly 2 years holding. Happy to get in in future if I see pessimism or some positive development

Added some 2% position to HDFC Bank in 1425 to 1480 cost range over last two weeks although near term upside is not visible

In terms of portfolio currently at 31% overall unrealized gains

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Update

Exhausted all the cash for now, built up HDFC Bank to 11% on cost basis with Avg price @1390 levels. Also added PVRINOX today with 7-8% allocation on cost basis with 1390 avg as well (Used up all the cash to buy it in a sense)
Rational for adding PVR is beaten down in my view with good risk reward, could go wrong. In expansion mode, most of the capex is front ended. ROCE might improve going ahead if new screens start yielding results. It could be a good bet from a very long term point of view not sure how long I will hold. Easily available & reasonable bet in current market for me at the moment

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Update

Entered UPL ltd with allocation of 2% at 465 price point. I feel this one resembles Lupin at 500 bucks, similar issues of price erosion, inventory destocking, volume, high interest due to high debt & out of nifty 50 all negatives bombarded at once. Trading at 1.2 PB which is bottom valuation for the stock I guess in lifetime, could lose most of money so less allocation, one thing I am not clear is what to do if rights issue is executed in next 6 months although i feel its unlikely for them to issue at depressed price unless in pretty bad shape. Agro is bad currently anyways got it not basis fundamental outlook but basis past history and valuation point of view

Sitting with zero cash, bank has money to get me by till month end xD

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Update

Sold Zee and Lux completely at loss of 30% combined. Added proceeds to UPL at same price as above, holding Zee was a mistake I guess even post merger cancellation while could have booked 60% profit and exited in hindsight 2 months back. Lux sold with 45% loss, yes it seems to be at good price point currently to average down but somehow felt UPL is better bet for now, could get back into Lux if any cash buildup is there. UPL now is 4-5% position on cost basis and could also add more

Portfolio at meagre 18% green overall. KMB, HDFC, CUB all are flat and they form 35-40% position

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You are selling debt free corporation (lux industries) for debt ridden corporation (UPl). If you want to do bottom fishing in Agrochemical, then why you are not buying sharda cropchem with zero debt and asset light model hovering around 52 week low. I think lux can be added at this level keeping watch on cotton prices. There is not much to loose in lux and sharda cropchem at these levels.
Disclaimer: holding both sharda cropchem and Lux industries and buying frequently. Just want to understand your frame of mind.

1 Like
8

Hi

Lux I sold out as it did not make much difference in portfolio as of now, it was less than 1% position. I added it initially with same thesis of cotton price reversion leading to better margins thus price, ignoring the promoter family issues and governance. Did not want to add currently to it as I am not comfortable with increasing position size, Zee had corp gov issues as well so sold out. Might look at both if dropping lower but not sure really

I have not looked at Sharda as I was looking at Largecap firms in a sense. Yes Shardacrop does seem better now that I looked at numbers, but I already hold Heranba from smallcap, keeping this due to domestic growth and -45% painful to sell :frowning: I am thinking now if I should replace Heranba with Shardacrop given corp gov redflags with Heranba. UPL over Shardacrop because it’s Largecap and I am comfortable building big position even upto 10% if opportunity arises, I do not want to do that with Shardacrop. As on debt, yes it’s pretty high and can be a double edged sword only time will reveal. With interest rate cuts around some relief at that end, also Valuation wise UPL is better than Sharda I feel being a Largecap

I am still learning, been in markets only from 2 odd years. Long way to go, let me know your/others views on above for any disagreements

1 Like
9

Update

I have added very small position to Bandhan Bank today around 172, its like 0.6-0.7% position size of folio on cost basis. Could scale up basis development going forward, but will not do so if there are better relative options with high risk reward asymmetry

Rational for addition:
It has pristine history (at least till now), NCGTC audit seemed like a big overhang to me. If proven then, have no idea of repercussions on Bandhan’s business but stock might nose dive and if bank comes out clean from audit then I think that’ s a positive (When is audit result due - God knows). If proven otherwise this could be next Yes bank (but I think highly unlikely given Founders pedigree and recent banking license with so many uncontrollable events in their concentrated region of WB, Assam)

Growth is there as MFI in itself is growing, my concern is their Corporate Book (did not dig deeper on CB)

Valuation wise seemed reasonable, not undervalued but lets say fairly valued given the historical and peer’s, but banking is a big blackhole so this could turn out to be 0 or 1 bet

And exit of Mr. Ghost could just be the short term hiccup as we are talking about an institution which will go on no matter what (Key man risk has already played out)

Reason for buy: Bottom fishing in current market with least efforts and of course anchoring bias, rationalizing away my bet with above points while reality seems different. If conviction builds up might switch Heranba position to Bandhan completely

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10

Update

Added some 30% position on top of existing to KMB in two tranches one at 1660 and other at 1550. Current avg price of total holding stands at 1705. On cost basis KMB is 20% position now and at portfolio level it is around 15% position. This addition was with some cash inflow from my salary which was happy coincidence with the fall

I was seriously mulling over selling a lot of other holdings and adding a lot more of Kotak if it falls to 1300 levels, still can do but that price level could be a wishful thinking

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Update

Added some 1.5% position to Radiant CMS at 77, might add more basis comfort at price level

Thesis:
Reasonable price, not cheap and not expensive with 3% dividend yield. Cash on B/S and FCF yield of 4% which is rare in current market I believe. Future plans are not clear but Promoter seems to be competent and clean, entering parallel business vertical DBJ logistics. As per management profits are subdued due to costs associated with DBJ, but not sure as we will know only as time passes. No idea on what their fintech arm does, I ll consider that a bonus/ optionality

When it comes to growth revenue did grow, and yes UPI etc are risk to business but that’s far ahead considering UPI is free. Terminal value risk exists but I am willing to take that. May increase the position basis market movements, thinking of switching from Heranba

1 Like
12

Update

Sold out Avanti feeds fully at 637, might get in around 500s if market permits

Sold out and booked -45% loss in Heranba at 300, it apparently moved +12% after I sold :frowning: such is market. It has been the case with most till date, but you do what you gotta do

Sold out Matrimony at -1% loss after holding 2+ years, might get it at 500s if market permits. Sold as my buy price was not justifying the growth

Overall with all above three positions CAGR was 12% which is kind of bad. Other than that portfolio stands at +30%

Holding good cash like 15%, looking for some options to deploy. Radiant is one option but want to check into some large cap. Star health looks okay but unable to convince myself of the valuation

I think I am being more active in terms of portfolio turnover than required, need to keep it in check but then it’s a process and keeps evolving maybe. Postmortem will teach the lessons later on

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13

Update

Entered GPT healthcare with 3.5% position on folio cost basis at 156. Seems like a good bet considering it is one the undervalued ones in Hospital. Good capex plans going ahead, will add more once convinced of prospects or thinking to play as a basket with likes of HCG/Aster/Shalby/Narayana

I like GPT though, I have not studied others much I just know them on the surface level, As GPT is already at medium cost basis for patients I am hoping if any regulations are enforced in terms of pricing of procedures at hospitals this one might turnout to be least affected (no numbers support as such just a though derived from what I saw in Management interviews)

17

Update

Took major exits today
Amara - sold out 1680s - 3x
GLS - sold out 900s - 2.1x
Antony - Sold out 540s - 2.1x
City union Bank - Sold out 170s - 0.4x

Overall have to pay 3.2% as LTCG of sold out amount. Wanted to keep cash, just intuitive. Now cash stands at 42% of overall portfolio value

This could turn out to be a very big mistake/ bad decision. Want to take one concentrated bet, trying to find value

18

Update

Added Samhi Hotels at 179 with position size of 8-9% of portfolio

Found it to be an okay pick, if supply demand gap continues and with no demand decline expecting it to be 2x in 3 years time atleast, as available in forum play is based on Supply demand gap, Deleveraging, Operating leverage and expansion in upcycle

2 Likes
19

Update

Added Credit Access Grameen at 1165 with 5-6% allocation, seems beaten down. Kind of studied and found to be a quality company at maybe fair price.Near term upside triggers are absent rather downside triggers are playing out

High chance of going more low as MFI cycle unfolds (If goes bad), but willing to take the risk as I might plan to hold as the Parent exit story unfolds (I personally wish KMB acquires of at all - Not sure what anyone or I gain out of it)

Added as valuation is at bottom (assuming no book value losses will be posted given the past track record as profits and BV bloated in this upcycle)

2 Likes
20

Update

Sold off PVRINOX fully with some 7-8% gains. 70% of proceeds added into Kotak and rest is cash for now

Kotak is 20-21% of overall portfolio now. Not that PVRINOX was overvalued, just that Kotak seems like more predictive business and historically low valuation and one less stock/business to track

May add back PVR depending on how bad it gets. Current portfolio after such changes

Current value basis (Mark to market)

Kotak 21%
Krsnaa 17%
HDFC Bank 10%
Samhi 9%
GPT Health 8%
Manappuram 8%
Credit access 5.5%
UPL 5%
Thyrocare 4.7%
IGL 4.1%
RadiantCMS 2.6%
IDFC First 2%
Bandhan 0.6%

Cash is overall 5-6% of holding value. If I am holding 100 rs stocks then cash is 5-6 rs with overall portfolio size of 105-106 rs for illustration

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21

Update

Added 1% position to PGInviT at 91.1, thesis is interest rate cycle peaking out with reduction in next 1 year leading to bond like behaviour for Invit. With current yield of 13% and decrease in repo (expected) price should theoretically increase keeping everything else constant

Felt like no further downside, possibility of 20-25% return including yield in a years time. This position is more like a case study or for proving my hypothesis. Nonetheless a cash position with optionality

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