Take a look at HCL tech also, nicely evolving from a pure play services to product with services mix, decent execution in in-organic growth success track record with buyout of select IBM products. Lots of naysayers didn’t think they will pull it off given services DNA of India IT biggies.
Among larger players they still have some rerating room left with margin expansion and were first to give business revised upward growth in mid quarter update in middle of Corona crisis in July.
Lot of runup in most IT players over last few months hence might take a pause but still must to have good IT stocks in PF. Lots of good quality names as called out by @Investor_No_1.
Personally am holding Infoedge and Indiamart also from lower levels in core PF in consumer tech, exited Affle due to valuations.
Route and happiest mind seems another good possibility but key is to get entry right with , market momentum is with them for now so not easy to get it. Tracking them for now.
Just dial seems a case of riding the tech wave but likely have missed the bus IMO…they have been around for long but most others in consumer tech space have zoomed past. Didnt study it though in detail.
Thanks @d.investor@Investor_No_1@Dev_S . You’ll have given me sufficient homework to go through. I love when this thread turns into a conversation starter. Please feel free to add more regarding your thoughts on IT/Tech and continue your conversations if needed since I’m honestly on the backfoot when it comes to this field and all your posts are helping me no end( I’ve admittedly been lukewarm on IT/Tech apart from a small stake in kpit). Added more of chambal, granules and deepak today during the dip with my freed up cash ie boring companies I understand and am familiar instead of taking the step into a new field with the likes of JD etc that I’m not so comfortable or familiar with(I do understand them but I honestly can’t make entry or exit strategies since I can’t understand them competition and valuation wise). Will need all the help I can to do so and you’ll have given me enough insight to make a decision regards which companies I want to invest in over the next week upon further study . Thanks again. Cheers
sir, what are your views on Bharti Airtel?
arrival of Jio had completely changed the telecom sector and now due this this competition Airtel is transforming into more than just a telecom company, look at the services that they offer-
Telecom, broadband and dth
NXTRA data centers
Airtel payments bank
Xstream
Airtel bluejeans for video conferencing
Airtel IQ for cloud communication
Airtel secure, Airtel cloud and IOT services
so they are not just pure telecom providers anymore and are getting into high tech services, can you see them atleast as semi-tech companies in the next few years as internet related tech services get more steam?
Those are very nicely put details, while we wait for Hiteshji to respond, I am just thinking loud here…these telecom players in this data world are excellent tech companies with a major problem though, which usually other pure play tech firm don’t face…and that’s the capital intensive infra in terms of not just physical infra but brutal licence fees and gov. Policies and regulations…this puts me off in investing in these otherwise excellent companies…I maybe wrong and would eagerly wait on Hiteshji’s views. Thanks
I agree totally with Investor no. 1. The telecom business is brutal and the government can’t help but do their best to prevent them from flourishing. I won’t be investing since I already know that I won’t be able to handle drastic falls since in the back of my head il keep wondering if it’s a new policy that we aren’t privvy to yet etc. To prevent such kneejerks I’d rather just not invest. Could be good options but I like sectors and businesses where management capability is given free reign and they are not held back by the government and hence why you as an investor can buy and hold long term just based on management pedigree.
I have always been coming back to this thread everyday, to gain wonderful insights, backed by data and logic. I have been mostly working on learning, and haven’t taken any decision without going through ConCalls, ARs myself, I have two questions, if you could help me with.
What are your thoughts on market crash yesterday? I consider these as buy opportunities in quality businesses. But I didn’t act, and the moment I woke up, the whole landscape had changed. A different time zone doesn’t work well in such situations where market offers buy opportunity in the morning and fades away by noon. I missed Laurus. I wanted to add below 300 (just a figure in mind). But it came very close (305)
Have you researched Hikal? As per their recent ConCall, their capex of 300 cr will be done in a year, and Fy22/Fy23 looks very exciting. Can it be next Laurus? I didn’t get much insights on the quality of management. But they seem to be conservative in giving numbers. What are your thoughts on this?
I was having a discussion with my sister on JustDial 3 months back, where she insisted it’s good. And I explained with various data points on why I would never use it, and hence didn’t find it a good business to invest in. I was never this much wrong.
as a rule I only invest on days when markets crash or when there’s new information that I feel hasn’t been priced in(usually post quarter results). I check the market 3 times a day when I’m in cash inbetween work @ 10 am , 1 pm , 3 pm (I check post 3.30 pm if I have no cash available since there’s nothing to use it for) and usually already have a mental list of supports and resistances for all the stocks I own and some on my watchlist. So whenever there is a crash I invest. For eg I added to my holdings in Deepak nitrite yesterday around 708 since it consolidated there long enough and I added more of granules post results since their guidance was unexpected and huge and I felt I got the info without it being priced in thanks to the asm list. It’s easier to make a quick buying decision on a stock you own and are familiar with than with a watchlist stock. Some stocks like alembic, laurus I’m already very overweight in so I just ignore their falls now.
I am admittedly overweight on pharma with laurus, alembic and granules so I’ve stopped myself from looking at more companies so I dunno much about hikal. I have tracked iolcp , kopran and alkem and if I wasn’t overweight I’d probably invest in them at current levels. Laurus spoilt us… Its rare to have a very low PE rating combined with the sustainable jump in EPS that they had. I do believe that companies like granules/alembic will match laurus slowly but steadily over the next few years and since that’s my investing timeline I don’t really care when the massive jumps happen as long as they do. If you believe strongly in hikal then it may be a good option for you. The day you can stomach steep drops knowing that long term you want to stay invested is the day you’ll take the plunge.
I regret just dial too. Market sentiments were obviously poor regards them earlier since they’ve been under delivering for a long time and the management has been running it on autopilot. I do believe JD mart is more in line to their strengths vs their other ventures of late but it’s risky since it’s a turnaround story and shouldn’t take too much of one’s portfolio. Considering no debt, negative working capital, considerable cash in the books, low valuations and breaking of year long highs in technical charts I don’t see much downside and a lot of upside. Risky but could well be worth it. I ended up investing more in my current companies(see above) instead of buying JD since I have a risky concentrated portfolio as it is and for it to work I need to know and trust the companies I own inside out… and JD doesn’t fit that bill yet. Considering the high valuations tech companies have I don’t mind waiting a few months or years to see how they handle their new business since there’s a lot of breathing room for a re rating and so buying later could be profitable too.
Now that I’m fully invested in my companies and am overweight in Pharma, Agri, Chem(the three themes that I absolutely am bullish on) and most of the companies I’ve tracked and owned belong in these themes im now looking elsewhere since I need to spread my investment themes out a bit and IT/Tech stands out. Will take me a few weeks or months to gain both the conviction and cash required to invest… until then il be studying IT/Tech and JD is one of those companies I’m still studying only for now.
Absolutely stunned by laurus labs Q2 result. Need to wait for the concall tmrw but if Q2 EPS of 4.5 is sustainable the EPS for FY 21 could end up being 17 to 20 at this rate when market expectations would have been around 12 since Q1 looked like the new base. This just sends it into orbit. Probably on track for 2.5X over the next year even from the CMP. Cannot wait for the concall. 823ece9c-1dfd-4cca-9c1e-714599020a36.pdf (2.2 MB)
Edit:
Attended the concall. Realised this journey is just starting and there’s visibility of growth uptil atleast FY24
Deployed all of my balance cash into laurus today when it dipped to 317(average now around 190) and it now takes up a whopping 40 percent of my portfolio. If there’s one share il safely keep investing in for the next few years it’s now laurus
I always took you for long term investor ,do you buy and sell at quick dips in the market like within a week or a month or invest saved profits from your core and keep it for long term.
@raku
I do consider myself a long term investor but corona made me improvise since these weren’t and aren’t normal times.
I had a core concentrated portfolio of large caps that I built from 2011 without any churn whatsoever(added in sip mode every month) that I liquidated totally in early March since corona increased uncertainty and I did not feel comfortable holding on to finance, auto etc going into it. I even liquidated my last finance stock recently ie sbi cards and used that to buy more shares in the same companies above. I just can’t justify holding onto sectors with covid uncertainty(even though I’ve spent a decade getting comfortable in those sectors) since these aren’t normal times and the opportunity for wealth creation currently in other sectors seems like a once in a decade opportunity
These sectors and the only 3 sectors with earnings visibility for me were pharma, chem and agri… however, I’d never invested in them properly (apart from a few good years with kaveri in 2014) so as a stopgap While studying pharma, chem, agri in April I bought mid/large caps in the sectors I was familiar with on steep discount and built a warchest till June during the bull market with the aim of investing that amount in companies within those 3 sectors once I gained conviction.
Over that period I studied and got comfortable with pharma, chemicals and agriculture and Thanks to this forum I managed to understand enough to invest in July. So I bought Laurus, Granules, Alembic, Deepak nitrite, Kaveri, Chambal… I’ve used dips to add to those stocks mainly over the past few months and haven’t sold a single share and don’t plan on doing so(unless the kaveri audit issue rears it’s head or any other fundamental issues prop up. I have exit and partial profit booking strategies for all my stocks since it’s so concentrated). I’ve now created a very concentrated portfolio in pharma, chem, agri basically with huge bets placed
I have no plans to get rid of any of my main portfolio stocks for the foreseeable and If anything il be using dips to buy more when I’m in cash. These are my core concentrated portfolio companies and they hold about 90 percent of my entire savings which looks like a staggeringly risky amount but I’m very comfortable and excited about what the next 3 to 4 years look for all of them. I’d never have been able to bet this huge without building conviction via study in those April, may, June months and without the help of this forum.
I have an experimental sub 1000 CR mcap satellite portfolio small amounts in Racl geartech, kopran and ganesh benzoplast too. There could be some churn here due to the nature of sub 1000 crore companies but ideally I’d like to be able to hold for the foreseeable too. I’m using this as practice since I’ve never owned sub 1000 cr MCAP companies before. I allocate about 8 to 9 percent of my savings for this.
Apart from those I do take small short term technical bets on the likes of KPIT, Aarti drugs, Kilpest etc inbetween but that’s just for a bit of fun tbh with small amounts ie the balance 1 or 2 percent of my savings and that’s where I use dips/charts etc to take advantage of situations that prop up.
Pretty average tbh. Invested in safe mid/ large caps my whole life. As I’ve mentioned in posts above I used to do it on auto pilot. Pick mid/ large caps and SIP in them in dips. Wasn’t very good at technicals and apart from a little reading of annual reports etc I wasn’t very well versed in the markets at all. I Got lucky with the likes of Bajaj finance, Page Industries but also got stagnant with the likes of ITC and lost a lot with Yes bank etc…overall I managed approx 12 percent CAGR over the past decade but was pretty happy(also dabbled in mutual funds for a flat return over 3 years which brought my overall returns down to around 10 or so). Once covid hit and I realised how dangerous the markets are and how at risk my money was I began studying. Read and watched everything I could and then I found value pickr accidentally… and it felt like a curtain was lifted and all the dots connected. Most of my picks and refinement of my thought process are due to the amazing threads and posters in this forum… Looking at stocks purely as businesses has made me very comfortable now and Im hoping that the next decade is a lot better than the last.
I am personally evaluating whether it makes sense for me to spend time and effort to identify and actively manage the portfolio. Alternative would be index funds or mfs.
I do not have a long track record to say one way or other.
Deepak results are out. At first glance they don’t look fantastic… but the magic of deepak shines through when looking at the consolidated results. Basic chem and performance products have underperfomed obviously due to covid. But my word… specialty chem and Phenolics more than made up for them which is all I was looking for. Once basic chem and performance start firing again post covid they are definitely in for a re rating with growth drivers in spec chem and phenol performing. At this rate I think someone will have to pry my deepak shares from me from my cold dead hands b8d20dd5-0c6e-48b9-9e89-d0c0cd0c8453 (1).pdf (3.5 MB)
@kanvgarg123
It’s been brewing and bubbling for some time now. Management increased R&D spends and cap ex plans towards the same and last 2 concalls spoke about focus on agro and pharma specialty chem. Linking you to the discussion we had in the deepak thread a few months ago. The discussion there along with the previous concall notes will help. Spec chem was the basis of my investment thesis due to the high margins on offer hence leading to a re rating and that seems to be playing out perfectly. There’ll be a quarter over the next year when everything will fire on all cylinders(basic , performance, spec and phenol) and the EPS will go through the roof. Deepak Nitrite
Great answer ,TBH i have very low patience level which i have payed with booking profits early that is a story for other time.
Took holding in kaveri and alembic pharma today will be siping in alembic specially will be little cautious with kaveri specially considering mohnish pabrai selling but i did look at his interview where he stated that he would change his investing strategy of not buy companies at 50 cent to a dollar and look for compounders ,lets see how it goes
whats your take on kaveri ,i found there valuation very cheap ,the managment is top notch knows how to get them out of trouble and there is a very strong tailwind in the agriculture field.
Hey @raku … maybe I’ve gotten a bit pessimistic watching my capital erode owning kaveri but I’ve realised a couple of things while owning it.
On paper everything looks fantastic… Huge amounts of free cash to benefit investors, tailwinds, good management guidance, good growth drivers, low valuations etc. The elephant in the room is the audit/tax issues though and on days like today when it drops 5+ percent you can’t help but think that maybe there’s something you don’t know about that’s causing it and it leads to testing of conviction.
I was sure kaveri wouldnt break it’s 200 dema around 510 to 520 and now here we are at 470. The realisation that maybe institutes aren’t risking large amounts of money due to the known unknown… ie the sebi audit keeps running through my head. The volumes are low on most days… and in general rises have been followed by steep falls… and in each of those falls you start questioning the audit. It’s a horrible feeling to have and it isn’t conducive to long term holding tbh. There may be nothing wrong regards the audit… but it grows in the back of your mind as an owner and i don’t have a Deus ex machina issue like this with any other company so its a bit annoying. I’m hoping that management addresses it outright soon since I’m sure a re rating will follow that. Until then I’ve lowered my expectations
In short: if alembic or laurus etc fell by 7 percent I’d be over the moon and I’d be excited to buy even more. When kaveri fell by 7 percent like today Im not even thinking of averaging it due to the chance of it being an audit related issue. When I fear averaging down my own companies I know that my conviction is being hit.
Note: the rational side of me knows that that the past few months could be purely technical since there was a breakout on June 20th which put it around 470 and it’s probably just reversed to that level now and the combination of this plus the oversold RSI means it’s ready for a steep rise but I can’t help but feel a bit pessimistic.
Edit: wish I’d followed my usual instinct and bought more at 470 haha. Atleast the rise today makes me confident there’s no audit issue resurgence yet
Interesting to know Malkd’s take on Kaveri. It brokedown over 200 DMA hitting my stop loss. Exited in loss as all the issues kept popping in mind on audit. May be as a novice, couldn’t get over the fear quickly & the kind of movement with low volumes swinging left and right, Kaveri was beyond my capacity to handle. On a lighter note, what’s that keep you going in this kind of large swings. Any methods you follow to keep a cool head !
@neeru3855 Haha I just added the reasons to my notes in my post above. The main thing I regret is my buying price. I got it totally wrong lol. Never in a million years did I expect it to revert back to 470. Il be waiting until Q2 results and commentary(they are declaring dividend too) and will then reassess after. I have a feeling I’m digging myself into a small hole though especially When I have so much conviction in my other companies so selling now and buying more laurus/deepak/alembic/Granules/Kopran/Benzoplast/Racl is something I would love to do. I cannot justify selling before I get more info post Q2 results though. If not for the audit issues I would’ve definitely averaged down again today but it just seems too risky to do so(which is a weird feeling for a long term investment and has put me off turnaround stories for a bit lol)
