Long term Portfolio - Min for 10-15 years

Dear All,

I’m invested in these stocks for long term (for at least 10-15 Years). I have started investing couple of years back. I have made some mistakes initially and this is how my current portfolio looks like after restructuring. I would appreciate to hear your feedback / comments. Thanks in advance!

Aditya Birla Future Retail - 5%
Branded apparel business is fast-growing and it has high growth potential possibilities in future. ABFRL enjoys best-in class profitability and management pedigree in its branded apparel business. It takes still sometime to take off, purely a long time play

CenturyPlyboard - 5%
Century Plyboards is a leading player in the fast growing plywood and laminate segment, with an overall share of 25-30 per cent of the organised plywood market. With GST and schemes like housing for all augers very well for this company. Its has strong fundamentals and good historic performance

Cera Sanitary - 5%
Similar to Century, Cera Sanitaryware has a powerful brand name and visionary management. It will also be a biggest beneficiary of GST and the housing for all. Lot of big investors and institutions are holding it

Delta Corp - 5%
Delta Corp is the only listed player in this sector. As per Motilal, its at the inflection point and the approval of the Daman casino will be a game changer. They are also acquiring lot of online gaming sites which is a big plus. The biggest advantage to Delta Corp is the fact that it has a monopoly competitive. We can see this company going very rapidly. Its a risky bet but I believe its worth taking if you are an aggresive investor

DHFL - 5%
The government is pushing for the affordable housing . This entire house finance sector is expected to do well . DHFL is still quoting at low valuations compared to peers. It has already more than doubled in the last one year and I believe it has still lot of scope to grow

Finolex Cables - 5%
Finolex Cables Limited is based in India and deals in the manufacture of electrical and telecommunication cables. Its a very good fundamental stock, lot of institutions are owning it. Its also the benificiery of affordable housing and GST.

Future Consumer - 4%
Future Consumer Ltd. (FCL) is the food and FMCG arm of the Future Group. Post the group level restructuring, FCL has been largely focusing its energies on the food space. Food and beverages formed about 94% of the brands business with the balance coming in from its home & personal care stable. FCL’s key brands include Golden Harvest, Premium Harvest, Kosh, Nilgiris, Tasty Treat, and Fresh & Pure. Given the projected earnings growth trajectory and visible potential improvement, it can offers significant upside

Future Retail - 4%
Future Retail to be a key beneficiary to the growth of retail. Its quoting at discount compared to Dmart. The company has brick-and-mortar stores with a strong presence through brands such as Big Bazaar, FBB and Easyday. Given the projected earnings growth trajectory and visible potential improvement, it can offers significant upside

Granules India - 5%
Granules India has achieved 25-30% CAGR in revenues & 30-40% CAGR in earnings over past 10 years. I expect the company to continue its growth momentum on account of moving up the value chain towards high margin business, improved capacity utilisation & capitalising Auctus Pharma’s portfolio.
As per Motilal Oswal 19th Wealth Creation Study, Granules is shortlisted as one of the potential 100-baggers

HSIL - 5%
HSIL is an industry leader and a very well-managed company. It has a very good market share. If the real estate sector picks up momentum, HSIL will benefit due to the increased demand for sanitary ware etc. Housing for well also augurs well for this company

Kitex Garments - 5%
Kitex Garments has no net debt, earns a high ROE and sells garments to giants like Carter’s, Gerber, ToysRUs, Wal-Mart, Mother Care, and The Children’s Place. Many experts says “Kitex Garments is a Page Industries in the making”. There are some goverence and growth issues in the recent past, need to see how it goes in the next one or 2 quarters

Lloyd Electric - 4%
This is a company operating in to 3 segments - consumer durables, packaged AC and heat exchanges. Company has done very well in the recent past and valuations cheapest compared among other consumer durables companies. Company has sold their consumer durable business to Havells. They shoulD get enough casH to clear the debts and to pay out big dividends, buyback or aquisitations. Have to wait for the deal to conclude, will make a call in the next few days tostay or get out of this

PTC India Fin - 5%
This stock, ‘PFS’, is one of the best among non-banking financial services (NBFC) trading at discount. The renewable space in which the company is a master is growing at an excellent space. The parent of this company, PTC, which is into short and long-term power trading, will ensure that its financing arm would tend to get a lot of new projects. This one is not moving much since last 2 years, testing patience

Piramal Enter - 5%
With strong business line and superb investment record this company is all set to become the safest compounder for next 5-10 years. Looking at current growth I feel that company is likely to continue the same momentum in near future as well. Company is diversifying in different geography and taking giant steps to capture global markets. Real estate financing as an industry is in strong momentum and PEL has shown enormous growth in loan book Company has indicated that all business is virtually independent and has great opportunity for value unlocking. De-merger can be a game changer for the investors.

Pokarna - 5%
A turnaround, which not only has turned around but growing at a great pace. Big opportunity size, huge growth space and company has solid moat. They have also announced tie up with IKEA, have plans for expansion, can grow at good pace

Reliance Capital - 5%
They are into many verticals general insurance, life insurance, the NBFC activity. Now the housing finance is being separated and they can develop anything related to finance, they can establish that business unlike most of the same much better than most other people in the market, because Reliance is a big brand and the group is coming out of its problems. Demerger of different entities can be a game changer

Sintex Ind - 5%
The company expects a steady growth of 18-20 per cent in its pre-fabrication business catering to sewage treatment plants, biogas plants and organic waste management structures. The housing for all, swatcha bharat and smart cities augers well for this company. Demerger of Plastics and Textile verticle unlocks value to the investors.

Suven Life Sci - 5%
As per Motilal Oswal 19th Wealth Creation Study, Suven is also shortlisted as one of the potential 100-baggers. Suven Life Sciences is an excellent high-growth, high-margin business which operates out of the new chemical entity-based, contract research-manufacturing space.
Typically, it is a pharma stock which enjoys very high margins. In addition, it has a huge monetisation opportunity for one of its molecule – SUVN-502. The molecule is in the advance stage. Other than this, the company has no working capital issues; it has superb balance sheet, and good return ratios.

TCI Express - 5%
TCI XPS has tremendous growth and profitability potential, more specifically in e-commerce and high consumption driven sectors. Clearance of GST bill will be an added advantage for XPS. It has a very good parent company TCI.

TVS Motors - 3%
TVS is India’s third largest two-wheeler manufacturing company. The better product mix has helped TVS to improve its operating margins. The two-wheeler company has better rural penetration, which allows them to capture a wide range of the domestic market. The tie up with BMW will auger very well

Yes Bank - 5%
Yes Bank can potentially grow even double the industry rate at somewhere around 22-24 per cent YoY for the next 3-5 years. They have done very well with asset quality which is very important for banks / financials.

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Write a couple of lines explaining your investment theses for each of your holdings. Only then can others help you out with their views.

Hi, I added my rationale behind choosing the stocks in my portfolio. Appreciate you feedback!

Dear sir . I am also invested in granules and suven for last 2 yr . Sir kindly requested to share your investment basis in granules India in detail please .
What about omnicam jv approval and metformin expansion

Good to see diversification in the portfolio, helps in de-risking when one invest in India where very businesses can be trusted over corporate governance and forever changing government policies.

However in India there are a just a handful of businesses which doesn’t need monitoring beyond 3 years, with rest one cant afford the same.

I strongly believe every portfolio should have 15-20% invested in large caps to cap the downfall during big falls. Midcaps can take forever or maybe never to reach back its peak due depression.

Also I believe one of the theme missing is a defense play. Most defence companies are multi play so risk is limited even if government doesn’t walk the talk. (Bharat Forge, L&T, Bharat Electronics, Tata Motors, Reliance Infrastructure etc)

Another suggestion would be to add more financial space, RBL Bank (500 or below), Edelweisse (100-120), DCB can give better appreciation.

Happy Investing.

Disclosure - I hold all the above mentioned stocks including quite a few mentioned in your portfolio.

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Thanks for your feedback. Yes, I agree on the defense play and the financial space. I have some of these stocks you listed in my watch list, I will plan to add them in future. I also strongly think financials will do well in the next 10 years.

What’s your take on Agri, chemicals and airline space?

My investment basis in Granules is as follows:
Granules is the pharma company moving up in the value chain from API to FD. 10-year consistent track record of 25% sales growth, 36% PAT growth, 48% ROE, 15% OPM and now increasing PAT margin as well. The company has generated wealth for shareholder consistently

The Omnicam JV helped diversifying the product portfolio by adding high-value products with significant market demand. The acquisitions and capex decisions seem to be weighing the operational efficiency parameters down. We need to see how it goes in the next few quarters.

Thanks sir for reply

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100% agree with what you said about Granules.
but dont you think it is slightly over priced, compared to book value, also in this bull market.

I am waiting for some time to enter into it, but not getting scope in last 3 months.
Waiting for a black swan day like brexit or surgical strike.

Is my plan correct? Share your views on this.

Disc: Invested, and also new in market. :slight_smile:

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I would say to wait for corrections to enter into this stock. I expect market to correct 5-10% from these levels, not expecting a major crash but we never know if something unexpected happens. Granules has already corrected 8-10% since last one week. I have entered into this stock 2 years back when it was around 85-90 levels. I added few more when it went down to 100 levels few months back.

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I’ve been investing only since November, 2015. You have probably been at it longer than I’ve. So, take this feedback with a pinch of salt. :slight_smile:

It’s a well diversified portfolio, & your rationale seems to show that you have done your due diligence before investing in these companies. Hopefully, you acquired them at decent valuations.

I would point out a couple of things.

  • The Institutional holding is not necessarily a good thing, especially the FIIs (I refer to them as FITs - Foreign Institutional Traders) who tend to sell for macro reasons nothing to do with India, or the underlying business fundamentals.

  • Also, your portfolio seems skewed towards Housing/Home Improvement sector (Century Ply, Cera, DHFL, Finolex, HSIL, Sintex). You might look at discretionary spending/demographic/entertainment/media plays like Wonderla, PVR/Inox, Shemaroo/Balaji, etc. (You will have to wait for a correction in Wonderla, PVR, Shemaroo.)

I hold Granules (you definitely got it at a great price which allows you to wait patiently for the triggers to play out), and Sintex. They need to be monitored closely not only in terms of operational performance, but also the corporate governance.

I track Pokarna - successful capex execution of the Quartz division, and the hiving off the apparel business are the key things to monitor. In case you missed it, @varadharajanr’s write up on Pokarna covers all the moving parts of the business.

If you are looking for defence plays as @bbbhutra suggested, you could also look at AstraMicro, & Shiva Texyarn.

Regarding Chemicals, you may read these Phillip Capital Reports on the sector to take a call.
http://www.phillipcapital.in/Admin/Research/702452410PC_-Specialty_Chemicals_Sector_Initiation-Mar_2016_20160329212843.pdf
https://www.phillipcapital.in/Admin/Research/48447685PC
-_Specialty_chemicals_Conf_Key_Takeways-_Sept_2016_20161003195148.pdf

Happy Investing!
Rajeev.

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Many thanks Rajeev for your detailed feedback. You seems to have very good knowledge about the Indian stock market though you are not that long in the market. Your suggestions really makes quite a lot of sense. I have also been investing only since Feb / Mar 2015.

I completely agree with your point about FIIs, I was referring here only to the Indian Institutional holdings such as MFs. You are right about me currently having more weight-age to the Housing/Home Improvement sector, I definitely acknowledge and plan to move some of them to discretionary spending/demographic/entertainment/media plays. I have been waiting for some correction to invest in the stocks you have mentioned above, they seems to be going only one way but I’m patient enough to wait for that correction :slight_smile: I used to hold Eros Media, but booked profits and got out of it as I was not comfortable because of governance issues.

Thanks for your comments regarding Granules and Pokarna. I have read @varadharajanr’s report too. I will definitely look at the defense play too at some point in the near future. Whats your views on Reliance Defense?

Thanks also for sharing the links / reports related to the chemicals space, I will do my research and plan to add one / two to my portfolio.

I don’t track Reliance Defence much. The Balance Sheet doesn’t look great, which means the company needs the large defence orders to come through sooner than later. Even with their Modular Shipbuilding, there’s bound to be working capital pressures (This is an intuitive assumption, I might be wrong). I need to keep an eye on whether their partnership with Saab for Combat Management Systems, & sensors will affect AstraMicro (I hold it) in any way.

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thank you for your comments.

Well I do not track the agri space much, fertilizer to be precise for me here, most of the business houses have been selling off their fertilizer business or many have been reporting losses. There have been talks since decade of consumption picking up but it never picked up and hence I have been away since I do not see consumption picking up in a hurry by our farmers. However with Modi government into play, i wont mind having a look where industry consumption rises by 10-15% overall.

I do hold EPC Irrigation and Shakti pumps as indirect play in agri space.

Chemicals - Output prices have risen quite a bit post chinese factories shutdown and the stock prices are reflective of the same. I holder hold small positions in Asahi Songwon, Bhageria Industries, Bodal Chemicals and Dharamsi Morarji.

Airline Space - I do not track it since there are many factors on which it remains dependent, specially government policies. Plus most of them are trading at premium for my comfort.

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Repro declared result today
Complete turnaround story
Vijay kedia has 35 cr of investment
I’m going to buy on every decline
Request to share if any one interested

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Thanks for your feedback. I also believe Agri is more cyclic. It also depends on the monsoon. I was thinking to buy this sector because of government focus. I will do some research on the chemical space. I was avoiding airlines space so far due to the policies and the dependency on crude oil but I believe this is one sector which is going to grow quite a lot in the coming years

Thank you Rajeev,

One of it notes…

“China´s emerging middle classes are health conscious and forcing the
government to fight pollution; as a consequence, regulation of the
chemical industry in China has tightened in the recent past”.

I think this would slowly in India too…considering reducing the pollution to rivers a priority…slowly…fighting pollution will come back to focus, I feel by next year end before general elections…So I like to know the companies in green technologies and investing by themselves to reduce pollution as they may not get affected when Govts start tightening the screws after some time… One of such may be Vikas Infotech (I am still studying it)…Which are the companies who are investing in green eco-friendly non polluting/less polluting chemicals and looks good from investing perspective?

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Check Shree Pushkar. It has made claims of Zero Effluents and pollution Free.

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Shree Pushkar has serious IP issues and court case with Huntsman.