Dear All,
PFB my portfolio, your views are valuable so looking forward to feedback.
| HDFC | 20.77% |
| HDFC Bank | 38.97% |
| PAGE | 5.50% |
| Supreme | 5.48% |
| CERA | 2.66% |
| eClerx | 5.42% |
| Mayur Uni | 5.42% |
| SCUF | 5.47% |
| SUPRAJIT | 2.31% |
| REPCO | 7.99% |
I am thinking of reducing HDFC [some profit booking] and adding V-Mart. Pl suggest.
Thanks.
Interesting. HDFC twins forms ~60% of PF! Can you give the rationale? Also why HDFC? Why not GRUH? Why do you want to reduce HDFC?
Close to 73% into financials seems a bit high.
I think the move from HDFC to some another stock might be advisable. HDFC doesnt look like giving abnormally large market beating returns.
Markets seem to be worried about software stocks and their future. maybe that could throw up some opportunity there. With your software background you might have an edge.
Thanks Hitesh.
Yes, HDFC i want to reduce. HDFC Twins are old holding but i am seeing them aging so will do replacement.
Whats your replacement suggestion except Pharma as i am weak in understanding it like ANDA, API etc…
Thanks Hitesh.
Yes, HDFC i want to reduce. HDFC Twins are old holding but i am seeing them aging so will do replacement.
Whats your replacement suggestion except Pharma as i am weak in understanding it like ANDA, API etc…
Ashwin - Its old holding and in good prfit but i am seeing returns from small/mid cap of my PF are outsmarting it hence looking for a replacement. Let me know if you can suggest something looking at my PF in a balanced manner.
You have a good analytical mind. You can easily understand pharma n should not miss the bus.VP itself is a treasure trove of info on pharma .
Indian IT & pharma story are similar both being knowledge intensive asset light stories taking advantage of Indias vast technical manpower pool, lower cost of manufacturing set up & lower college education cost when compared to the West.
As such opportunity size remains huge & ROCE very decent for good cos in these sectors.
You can look at Natco,Ajanta,Shilpa,Alembic,Lupin amongst pharma names
Also look at Avanti feed as opp size will remain huge as world is moving to lower cholestrol producing healthy non veg food like Shrimps & Indias natural advantage in producing them,Govt excellent measures over last 3-4 years post introduction of Vannamei which has not resulted in any disease,rising prices,very low valuation of below 5 PE & ROCE of 30%.
I think both PE & EPS will increase in coming year for Avanti along with expected dividend of 15- 20 rs per share. TUF 25% stake in this sunrise sector is a big differentiator along with ethical promoter with good execution track record of 20 years.
Expect excellent results in coming quarters as capacity has been expanaded by 85000 tonnes recently & demand is not a problem .
You have a good analytical mind. You can easily understand pharma n should not miss the bus.VP itself is a treasure trove of info on pharma .
Indian IT & pharma story are similar both being knowledge intensive asset light stories taking advantage of Indias vast technical manpower pool, lower cost of manufacturing set up & lower college education cost when compared to the West.
As such opportunity size remains huge & ROCE very decent for good cos in these sectors.
You can look at Natco,Ajanta,Shilpa,Alembic,Lupin amongst pharma names
Also look at Avanti feed as opp size will remain huge as world is moving to lower cholestrol producing healthy non veg food like Shrimps & Indias natural advantage in producing them,Govt excellent measures over last 3-4 years post introduction of Vannamei which has not resulted in any disease,rising prices,very low valuation of below 5 PE & ROCE of 30%.
I think both PE & EPS will increase in coming year for Avanti along with expected dividend of 15- 20 rs per share. TUF 25% stake in this sunrise sector is a big differentiator along with ethical promoter with good execution track record of 20 years.
Expect excellent results in coming quarters as capacity has been expanaded by 85000 tonnes recently & demand is not a problem .
Thanks Vivek for inputs.
Off-late i thoughts were on same track. Decided to offload HDFC and SCUF in steps and reinvest the proceed in Alembic & V-Mart. Both looks growth stock with enough visibility on scale.
Avanti is on my radar, will dig deeper into this.
Whats your most high conviction bet as of now?
I have recently bought Avanti Feeds,EIL,PSU ETF & Shilpa.
EIL & PSU ETF from are small positions from a trading mind set.
Manish,
What’s your take on v-mart? I read the retail stocks related passages in ‘Beating the Street’ and based on that gyan v-mart looks good to me. Would be nice to hear your views.
-HG
V-Mart is an excellent middle class consumption pan-india story. What i liked most is that:
Demand is clear and visible. Target segment is niche.
Growth plans are clear and they have the cash in hand to invest
Mgmt look smart and cost/return conscious
Most important is this business is easy to monitor, if it slips on below then one can easily decide to SELL - Same store sale, profit margin, per-sqft of sale, inventory turn over and so on
Downside is that until RoE improves it will take time to get rerated.
I agree, Manish. The key monitorables are easy to track. And Mgmt words and actions are in sync so far.
**“IF”**promoters replicate past 5 years story ahead in next 5 years then it seems a sure 10 begger from current MCAP.
I spent around 6 years in the market and lucky to earn the money and lose some too. All past 6 years were learning and still now few surprises keeps me kn toe. I realized now that stock market is the harded game to play. Here one bets against or bet with a crowd. Nobody in the world knows crowd behaviour still we listen to many experts. Few examples-When USD soar and BoP crisis happened market tanked then all the experts were very gloomy:
RamdevAgrawal sounded extremely frustrated in MC interview about the future. His tone was like road ahead would be very very tough.
HDFC Research pubished a commentary - “Hope for the best and prepare for the worst”
and so on.
Alas, now in a short span everything has changed! We have now a hush-hush talk of Bull Run!
I do not mean to insult above guys, my point is that when crisis occurs then it affects all of us including experts. So those who uses rationality often earns outsized returns.
My limited intelligence says that future trend is for small/mid cap healthy stocks. All those stocks who are smaller unknown companies but they are creating values for shareholder will continue to be rewarded. One such company was Suprajit Engg which i invested in small sum due to lack of volume. Its doing phenomenally now while all big players are struggling…This list is big, all favourite stocks on VP in 500-1000Cr MCAP with healthy BS, Good Mgmt, Clear expansion Plans and availability of fund for expansion will continue to rock.
Cheers!
I wanted to discuss HDFC valuation today. I dont need to say that below are very high conviction assumtipns:
Superb, ethical and smart leadership
20-21% growth for next 3 years, if interest rates drops then it will shoot up further
Now lets look at current valuation:
CMP=879 [21 Apr14, 2.30pm]
EPS:
Standalone - 33.8
Consolidated - 48
PE:
Standalone - 26
Consolidated -18
Reasonable estimation for FY15-17:
Growth rate - 20%
FY17 EPS:
Standalone - 58.4
Consolidated -83
FY17 PE:
Standalone - 15
Consolidated -10.5
Practically we all know that consolidated PE of 10-11 is surely a huge undervaluation and in all probability such quality business will quote at a PE of say 18 which gives FY17 price of 1500 (18x83) its a 19% CAGR for next 3 years!
Now my question is as below:
Assumea hard working and employedindividual investorhas got20+ Lakhto invest then what makes sense:
Buying 19% near sure grower like HDFC and sleep well? It menas 20 lakh would be near 40 Lakhs in 3 years
Scattering 20 Lakhinto plethora of small caps with much higher risk?
Views invited…it would be good if other can share similar high conviction but better bets, if any.
Hi Manish,
Obviously when the Size increases, one should look for less risk & sure shot opportunities even with less CAGR. And 19% CAGR will make the money double in 4 years not 3 years.
Considering the same business, when market leader is giving 19% CAGR, wont the followers give much better return due to size, considering market size and opportunities.
ex: Gruh & repco
just my 2 cents…
-Sridhar
Assumea employedindividual investorhas got20+ Lakhto near sure Lakhinto high conviction
Sridhar,
Agree with Gruh,Repco [i hold] but is present valuation looks logically justify to bet huge amount?
Thats the question i have. I am not doubting quality of many mid caps but can one bet heavily on them w/o losing sleep? 20 Lakh is a example figure, what is bet size is even bigger…
I’m also invested in HDFC. HDFC has the 22.8% stake in HDFC bank, 59.8% in HDFC AMC business, 72.4% in HDFC Life, 73.9% in HDFC Ergo and 59.7% stake in GRUH finance. Around 40% of HDFC stock price can be attributed to its subsidiaries (http://www.thehindubusinessline.com/industry-and-economy/banking/investment-focus-hdfc-on-a-strong-footing/article5567121.ece). The contribution of its subsidiaries in the consolidated earnings has increased in the last three years, rising to 33% of consolidated profits from 13% in 2010. You are also buying the insurance and mutual fund businesses which can show higher growth.
I feel with HDFC it is more of a an opportunity loss only if you can pick a better performing small cap. Personally as a individual investor if I’d 20 lakh, I would invest 8-9 lakh in HDFC and the rest in small cap. When a mortgage lender (GRUH) trades like a FMCG stock and an apparel manufacturer (Page) trades like an internet company stock, it is good for existing owners and not for new entrants. This is my personal opinion. I like both these businesses but not comfortable to own at 33 or 50 times earnings.
You may have a look at Avanti Feeds which is available at CMP for around 8 times TTM earnings and similar strong performance expected in 4QFY14. There are risks (go through the Avanti thread) and it is NOT a till-death-do-you-part stock. However it is a tad undervalued IMO.
Hi Manish,
It depends totally on an individual. One needs to decide where one can sleep peacefully–be in HDFC a 18% grower, Page a 25% grower, or simply FD which is 8% grower.
At the end of the day it the sleep which is more important.
If I am a moderate risk investor with a large sum to deploy, I will go and split them between the likes of Page, Gruh, HDFC Bank, Nestle and Asian paints in spite of higher valuations. Worse case I will not make money for 1-2 year as they may go for a time correction, but there are very less chances of capital loss. Timing markets are a rare skill and I have not found many people who have it repeatedly.
Investors who do not want risk need to remain in Bank FD as stock market always has some risk associated with it.
Regards,
Raj**
**
