My Portfolio - Help me trim this Please

I will only respond wrt to a few companies / sectors which I have tracked before.

First off, I’m flattered that you’ve cloned my portfolio to a large extent. But make sure you do your own research about these companies in order to steel your conviction. Borrowed conviction hardly lasts. You can, of course, find comments about my portfolio (Both positive and negative) in my PF thread:

Otherwise:

I’d ask you to read this wonderful analysis of the milk products industry in India:

I personally wouldn’t touch any company with a D/E > 1, unless they’re borrowing temporarily for an expansion or so. A D/E > 3 is simply too risky in my opinion. What’s more concerning is the management’s explanation of their rising D/E Ratio:

image

In the real world, a load of Debt actually reduces a company’s capacity to try innovative stuff and also decreases the ability to borrow further funds. My take away from this is that the management isn’t shy to rising more Debt, which makes an investment in Hatsun way more risker (To me).

I did an extensive research on Cochin Shipyard. I’m even convinced that the company has a wide moat. However, the nature of its business makes it so that it has a very high fixed expense, whereas revenues are spread across several years. I’d still maintain that it’s a great company. However, I’d personally require it to drop several notches before I consider it a good investment.

The VP thread for Cupid has a trove of research on the company. I suggest you read through it completely:

However, as already mentioned, the company is at the crossroads of several things:

  1. The old CEO is about to resign and has hinted that he might be reducing his 44% stake in the company
  2. The new CEO will be identified soon (Within this year, according to the last concall)
  3. Foary into India’s B2C segment
  4. Testing waters for FC in Europe and USA

So, you should track all these things before making any buy or sell decisions. Personally, I find the company to be pretty responsive to adverse situations.

For instance, recently the SA government had indicated that they’d prefer giving more business to a local player. While FHC (The biggest competitor to Cupid) didn’t specifically respond to this, Cupid responded by planning a JV with a local manufacturer. There are other small gestures like this, which make me believe that the management is not all words and no action.

Disc: Cupid forms about 10% of my PF. Views may be biased.