Hi, sharing my portfolio here for expert comments-
My portfolio size is at 40x my annual expenses. I have reached this level through concentrated investing mostly.
Currently, I have only 4 stocks in my portfolio-
- GPIL- I have started posting on GPIL thread a few days ago. GPIL is 40% of my portfolio.
This is my latest post on it. Godawari Power - Any Trackers? - #267 by Kumar_manas
GPIL is my biggest allocation and I have bought stocks in last 1 week as well given how mouthwatering the valuations are. The stock was available at nearly 45% earnings yield just 10 days ago. Even now, it is at 30-35% earnings yield compared to 5% earnings yield of a fixed deposit or 10-12% earnings yield of other commodity stocks. Also, the new specialty steel plant will not just nearly double the earnings but re-rate the company as well to higher multiples than other steel companies as specialty steel plants have higher margins than regular steel. Please do your own diligence.
I don’t agree with many people that it deserves very low valuations. It is a very low depreciation, debt free, high free cash flow company which will be putting a big specialty steel plant in next 3 years (potentially doubling the revenue and profits, leading to 20-30% CAGR in growth for next few yrs). So, why should it not trade at higher valuations than other steel companies?
Also, the solar plant which will be operational in an year should add 170 cr EBITDA/year which is totally non-cyclical in nature. 170 cr non-cyclical EBITDA itself gets a 1200-1400 cr mkt cap in Indian companies if I am not wrong.
Market may have some other views right now, and Mr. Market may change its views when they get EC for the new plant and lay out the detailed capex and expected profits from that plant. Let us see how this happens.
There is no listed or unlisted company in Indian markets that is making annual EBITDA in range of 1400-2500 crores, is debt free and is in 4000-5000 cr mkt cap range or having debt and is in 4000-5000 cr Enterprise value range.
Meghmani organics and Meghmani Finechem- 20% allocation each.
Again both are doing very big capex in next 2-3 years. and currently have low valuations compared to their peers.
The theme of GPIL and Meghmani is common- low valuations, mega capex.
GPIL seems better than Meghmani - because it is debt free. They haven’t done corporate governance mis-deeds like Meghmani did. GPIL has been very transparent in their concalls and presentations every quarter for last many years.
That’s why GPIL gets double the allocation compared to each Meghmani.
Rest 20% allocation to Dynemic products
Again same theme- their new plant is ready now, and it can potentially triple profits. The stock is at lower valuations compared to its peers though not exactly cheap like GPIL or meghmani. Still, the mega capex theme is pretty similar to my investing style.
Comments are welcome.