Value Pickr community has been a very good experience for since the last 5 months for me. I’ve learnt a great deal from our fellow members. The only regret is that I’ve not been an active contributing member of the community. I’ve decided to change that now. I’m publishing my portfolio for the first time, would love to get your feedback and pointers. I try to run a concentrated portfolio, and I dont hesitate in averaging up if the company keeps performing. This portfolio was started in Jan’20 (good timing, luck was on my side). I’ve traded some stocks during this period (like IRCTC, MCX & Prataap Snacks those arent mentioned in the portfolio, net results have been good on those trades also) some stocks I sold early and then gotten back in even at higher prices.
Stocks
Entry Price
ACRYSIL LIMITED
350 & 753
APOLLO TRICOAT TUBES LIMITED
118.3-557.5
AU SMALL FINANCE BANK LIMITED
862.45
BOROSIL RENEWABLES LIMITED
165-429
Caplin Point
334-884
DR. LAL PATHLABS LIMITED
1769-4040
GRANULES INDIA LIMITED
138-363
HDFC INSURANCE COMPANY LIMITED
484.97-734.75
HINDUSTAN COPPER LTD.
122-146.2
IMFA
218-695
MSTC
421-435
Radico Khaitan
902-918
SAREGAMA INDIA LIMITED
2486-3840
STRIDES PHARMA SCIENCE LIMITED
953.88
Any and all criticism will be highly appreciated so don’t hold back.
An important aspect that is missing from your portfolio is the allocation in terms of percentage and Average price for each position. Most of the companies are really good, but trading on hefty valuations.
I don’t have a time horizon with investments. I invest based on my hypothesis as long as the hypothesis hold I continue to hold or even add to my investments. My investments are time agnostic. I exit under the following condition:
If I find corp governance issue. eg. Neuland (I didn’t like the related party transactions wrt to rent of new office space. Plus I couldn’t reconcile the tax figures in CFS & PnL) on the face of it I likes the business and the opportunity space that the company is in. But, this was taking too much time to understand all the accounting. In short I was uncomfortable with it so I just exited at a loss after q1results.
When valuations are excessive. eg. IRCTC my avg was 1200 approx and I sold out at 2500 odd (looking back it was big mistake)
Mgt unable to deliver due to competition or regulatory landscape or lack of mgt focus. eg. MCX due to the recent margin changes the company is finding it very hard to grow daily turnover in the business.
Better opportunities eg. I sold MCX and moved the capital to MSTC as its story is unfolding beautifully.
Overall market looks very precariously poised. I dont know if I have this super human ability but if I sense that the markets have become too risky then all bets are off, I would sell. Im always on the lookout for something that can throw a spanner in the wheels.
Please note the portfolio reflects the current state of my holdings.
Stock Name
Avg Price
Portfoli weight
ACRYSIL LIMITED
405
9.52%
APOLLO TRICOAT TUBES LIMITED
191
6.21%
AU SMALL FINANCE BANK LIMITED
909
7.18%
BOROSIL RENEWABLES LIMITED
272
10.24%
Caplin Point
557
6.03%
DR. LAL PATHLABS LIMITED
2211
9.51%
GRANULES INDIA LIMITED
148
5.15%
HDFC INSURANCE COMPANY LIMITED
603
9.26%
HINDUSTAN COPPER LTD.
140
11.70%
IMFA
194
2.26%
MSTC
428
9.96%
Radico Khaitan
914
9.56%
SAREGAMA INDIA LIMITED
2766
9.33%
STRIDES PHARMA SCIENCE LIMITED
954
7.10%
Methodology for calculation.
I’ve taken the amount I had invested as the base for calculating the percentage weights. Over the period apart from these stocks I’ve traded few stocks and the net gains have been added back to the investment kitty but initial investment has remained the same, that why the total weight is >100%. I couldn’t think of a better way to account for gain in booked out positions.
Now only my investment hypothesis is to be added to the thread. I’ll try and add that soon. @hitusohi1@ashu14dec@sujay85 thanks for your feedback. Looking forward to a engaging discussion with you all.
Acrysil:
a. Leaders in the quartz sink segment.
b. Very good return ratio’s
c. Very quick capacity addition without indebting the company.
d. Strong negotiating power with customers (proven by companies ability to pass on 3 rate hikes this year)
e. Company has added product lines around it quartz sinks (steel sinks, kitchen electronic goods, composite tiles)
f. Geographical expansion into USA and focus on the domestic market will help the company in sustaining the current growth rates
This company is a good example of finding one strong market and building around it.
Apollo Tricoat:
a. Excellent execution capability. They have amassed a huge market share in the segment
b. Tightly run company. Working Capital cycle is a testament to that.
c. Innovative product launches
d. Very fast capacity additions
e. Cheaper raw material. Since domestic steel is cheaper than imported steel import substitution products will be very lucrative for the company. My assessment was that the margins on these new structural products will be very healthy.
f. Company has a very strong capacity addition pipeline (they already have acquired the land in Raipur that’ll support years of capex.
g. Cheaper way to get in to the parent. (not very happy with the merger as the margin profile was much better in this company, but that’s ok)
Au Small Finance Bank:
a. Well run bank, has a proven track record (from being a DSA to A Full Service bank). Basically, betting on the promoters execution capabilities.
b. Growth numbers look good.
c. Recent HR issues are a concern. Keeping a close eye
Borosil Renewables:
a. Company was the lone survivor from the last decade when India had a few solar glass manufacturers. They survived the Chinese onslaught by investing in to R&D. This shows conviction in the business and the vision of the company.
b. World’s first company to produce Antimony free glass and the first (to this day) the only company to have achieved toughening of 2mm glass. The antimony glass will be a big draw in the developed market as they look for greener glass
c. Huge sectoral tailwinds and company has decided to make the maximum of the situation by going in for a 4X capex. Although the company will be diluting some stake but compared to capex it will still be value accretive for the current shareholders.
d. Margin profile is improving every successive quarter.
Many new companies are entering the segment but it’ll be a good 12-18 months for the capacities to come on-stream. Plus the edge that the company already has on the product side, segment itself is going to double in the next 2-3 years on top of that change like double sided glass panels will only help in increasing the demand for solar glass in the future. Don’t forget about the government focus on this segment. Govt. has taken various safeguard measures.
This company is a good example of “LOLLAPALOOZA” effect.
Caplin Point:
a. Company has not failed any audits by the regulators, this shows very good grip on manufacturing process.
b. Company has grown concentrically around its stronghold (company started a bulk supplier in Latin America to having a strong revenue in the last few years. Not only has the company expanded in the region it has also captured greater part of the value chain.
c. Concentric expansion is accelerating now as company has decided to enter Brazil & Mexico
d. It has chosen the geography very wisely as there are not pharma manufacturing facilities in LatAm region.
e. Company has also decided to enter China. This hasn’t yet materialised but the China opportunity will be huge.
f. Company has an Injectables division this further shows how good the company is with compliances.
Dr. Lal PathLab:
a. Trusted and reliable brand in the pathology testing segment.
b. Large value migration possibility in this segment and the company has constantly take away share from the unorganised labs.
c. Company is also looking to consolidate the market by acquiring small well run chains in the pathology segment. What’s more impressive is that these acquisition are very strategic in nature. They did not have presence in the Western and Southern region of the country so they went and made 3 acquisitions (one in Gujarat, one in Maharashtra and one in Karnataka.
d. Dr. Om Manchanda is the phenomenon behind this stock. Excellent jockey for this horse.
e. Company can see some underperformance as covid abates but the overall opportunity space is very large.
Granules:
a. Great compliance track record.
b. Very strong position in key frontline compounds
c. Very efficient manufacturing. This reflects in the gross margins of the company.
d. Currently is facing headwinds but the pressure will start abating in the coming six months as supply chains are restored and more PAP capacities come on stream.
e. Company has grown from being a simple generic company to complex generics.
f. What I don’t like is the constant news around promoter looking to sell and never materialising. Hope it materialises someday.
No scrips from these future themes : digitization , 5g , EV.
& Also don’t you think Borosil Renewable is into utility sector so any social implications/policy changes can have negative impact on the high margins…
Hi Shakti,
Thanks for taking time to evaluating the portfolio.
I dont try to go for sectors specific trades. My picks are almost always based on the stocks individual merit (as per my understanding). I own Pharma stocks, I dont own chemicals as most of them that I liked looked too expensive. Basically I was late to the party.
I have added greaves cotton to the portfolio recently.
Borosil Renewables is riding a huge solar energy wave. I see the stock being able to grow at great pace for years to come, even if the margins contract a bit because of competition or raw material cost going up the sheer size of opportunity can take care of that. Company will 4x the capacity in next 2-3 years and even that wont be the end.
We can have a stock specific discussion from the list.
I dont like to hold more than 12-15 stocks. Beyond this number it not possible for me to track them efficiently with my job.
