My portfolio-Nibin

Nibin_Issac · January 24, 2020, 8:28am

Hi All
My investment journey started few years back . For the last 3 years i am investing a fixed amount in a group of companies every month (Kind of SIP) . Investment theme is based on value stocks, under penetrated and huge opportunity sectors (Insurance & AMC, Gas sector), cyclical and Digital theme. Below is my portfolio , please provide your valuable feedback

Reliance	7.60	I am considering Reliance as a digital company rather than a petro chemical –Oil gas company. Jio digital, JioMart etc. will be a game changer. Company has recently acquired a number of fintech, digital, cloud related company in order to roll out JioMart. If voda-idea goes bankrupt, then Jio will have around 40-45% market share and Jio is more technically capable to roll out 5G services with less capex. As mentioned by an analyst Reliance is a combination of AT&T, Amazon and Exxon. Concerns: Deleveraging plans if not worked out will put pressure on balance sheet which has got 2 lakh core debt
HDFC AMC	7.60	They got 15% market share in Mutual fund industry and got height percentage of Equity AUM. Mutual fund industry is still in nascent stage in India and got scope to grow. Concerns: 40+ AMC are there in market. Most of the funds by HDFC AMC’s are not in top rating of CRISIL but somehow customers are sticky to it
ICICI Prudential	7.60	Why not HDFC Life or SBI Life? From a valuation perceptive ICICI pru is behind both of them and their strategy to increase Protection business will gain traction in coming years and they will finally catch up with peers. Insurance is long term story and I believe all these players will gain in a continuous manner
HDFC Bank	7.60	No need to talk about their retail banking. Their card business has got best RoA among peers. HDB will be listed soon and market is expecting around 1100+ rs for a share. Bank has got excellent digital capabilities and their myApps is gaining traction. Concerns: who will be the successor of Aditya puri, will it be an insider or an outsider and how the new CEO will fit into?
L&T Finance Holding	6.46	Largest financier in Renewable energy, top financier in Vehicles & Tractor I am considering it as a turnaround story. Current CEO has clearly articulated their strategy “Right to Win” and attain ROE of around 20. Because of L&T parentage their rating is AAA and no funding worries even in this turbulent times. Their NCD’s is getting oversubscription. They are now moving into city gas distribution financing and consumer lending which I guess which will be the next growth levers. I believe they will sell their AMC business (L&T mutual fund) just like defocused business and will concentrate on Lending business alone Concerns: higher exposure to Real estate, wholesale lending especially supertech builders,
Polycab	6.08	Largest Wire & cable player in organized players. FMEG is picking up at a steady pace. ROCE is 20+ and 600crore in cash. PE ratio is less compared to Havells, v-guard etc.
L&T InfoTech	6.08	One of the best IT Midcap company They started concentrating on Digital many years back and currently got 40+ % revenue from digital. Merger with Mindtree which is imminent in future will make it 4/5^th biggest IT company in India. Not many verticals of both these companies are getting overlapped that’s a huge advantage Parent L&T has started a new company called L&T NXT which is purely engaged in Digital. Need to see how this will play out
Petronet LNG	6.08	Largest importer of LNG India gas demand is expected to double over next few years. With Cochin-Mangalore pipeline completing in March, Utilization levels in Cochin will increase considerably. Not much competition from others players for Dahej and no hope of ONGC increasing gas production till FY22.
ITC	6.08	I believe, ITC is hugely undervalued. Much debate is there in forum on this topic so not taking it up. My belief is that with the upcoming ICMLs, and 25000 crore capex they can surely increase market penetration. Taking profit out of Tobacco and investing in other business is increasing their bottom line and in future FMCG will contribute to Topline also. HUL also went through this phase in the past. Concerns : Sin stocks are getting de rated worldwide and overhang of GST
Endurance technologies	4.56	Largest aluminum die casting producer, prominent market shares in Transmission, braking and suspension. Caters to 2W, 3W and 4W. They got family tie up with Bajaj auto and Bajaj was their major client few years before. Now they all major auto players in their kitty and client concentration is decreasing Focus on EV vehicles (Management indicates that they will EV related business) ABS for 2 wheelers will be the next growth levers. Limited impact on EV Concerns: Auto slowdown
Jamuna Auto	3.16	Largest Leaf and Parabolic Springs producer in India (70+ market share) and second in world. Performance depends upon the CV market and hence down in the current slowdown. Company is trying to increase the after-market share in recent years and slowly seeing some traction. Got excellent ROE and ROCE. No impact of EV
NOCIL	3.04	Market leader in Rubber chemicals Problems in China, Large capacity expansion in Dahej, increasing international exports and concentrating into value added products definitely aide them to gain further market share. No impact of EV Concerns: Auto industry slowdown
Cochin Shipyard	4.56	Largest ship building & Repair company With the completion of ISRF and Dry dock and takeover of many ship repairing ports, CSL will become largest ship repairing company by FY 21/22. High order book and quality management (Not the government). Not much debit Concerns: Inclusion of CSL in CPSE will have an impact when they come up with CPSE ETF. Govt asking for more dividend and buyback of share.
Sterlite Technologies	4.56	Largest Optical fiber & cable producer in India (40+ market share) From being a cable producer they have moved to complete end to end solution provider. Recent acquisitions, huge Cloud & 5G opportunity, smart cities in India, good margins etc are my convictions. Concerns: Pledging of shares by promoters in recent past, oversupply of fiber. Delay in 5G implementation
Aurobindo Pharma	4.56	2^nd largest Generics in USA after Sandoz acquisition, and within top 10 position in many European countries Company has got 500+ ANDA in US, started biosimilar trials, trying to enter china market, increase in oncology business, market share increase from recent acquisition (Sandoz, Apotex, Spectrum, Generics). Management expects to debt free by FY22. Concerns : USFDA regulations this is any way new normal for all pharma players
KNR Construction	4.56	Want to have a share in infra sector and this company has got best in class balance sheet among peers (excellent Working capital & debit to equity is around .2). Recent sell down of road projects to Cube is a big positive. Management is known for its execution capabilities and doesn’t want to aggressively go after growth Concerns : Slowdown from NHAI
Federal Bank	4.18	A Kerala based bank which is gradually increasing their market share. Consolidation of PSU banks helped them to gain market share in Kerala and getting traction in other southern states. ROE is increasing every quarter. Because of huge NRI deposits, no concern on capital Concerns: Inconsistency in performance, asset quality changes back & forth q-o-q. Planning to shift to ICICI bank or HDFC bank
Godrej Agrovet	3.41	Largest Palm oil producer and got animal feed and crop protection business. My bet is on Astec life science which will get merged with this company in future (earlier merger was called off). India imports 75000 crore of Palm oil every year. Recently India banned palm oil imports from Malaysia and currently drafting a bill to increase oil seed production to double Concern: Mainly a commodity kind of business, less margin
GMR Infra	2.19	A wealth destroyer in the past and not so worthy promoters (Pledging of shares). Then why this risk?? This is a contra bet because of the assets they got. Company will soon split into 2 companies with Airport and other business. GMR airport is I am interested in they got operational Delhi, Hyderabad and Cebu airports, under constructing Goa & Crete(Greece) airports. Both Delhi & Hyderabad airport has got huge land banks. GMR airport has got other strategic investors like Tata, GIC, SSG etc. Their Infra and power business is nothing to be mentioned.

vikas_sinha · January 24, 2020, 11:01am

Nice portfolio choices.
I used to hold 4 stocks in the list till about a few weeks ago:

Sterlite – I saw no hope for 1-2 year timeline, it is tough when you directly compete with Chinese and the biggest market is China, double blow. Nobody in India can even think of spending on networks, nobody, public or private, has the money for the timeline mentioned. Capacity overhang trend will last pretty long like this. Exited with 2% loss to overall portfolio, about 3 months ago, after holding for 2 years (was only 4-5% of portfolio, tried averaging down). Promoters though really big guns have a mixed reputation.

Reliance – Overpriced, zoomed up too much too fast only recently, I got in and then out in past 2 months, was too late for me to think of gains from here. This stock will rest a while. Ambani is good at getting into businesses with barriers/licenses and huge spending power. I do not think that is a healthy pattern overall. Innovation strictly not required.

Federal Bank – was difficult to sell, but quality/consistency I could not judge indeed. Was sacrificed for booking some gains in the past 3 months I held it, had zoomed and for portfolio consolidation.

Polycab – was difficult to sell, but was getting pricey. Quality stock though, I was more greedy for growth. PE 23-24 for PAT CAGR 30-35%, it looked all priced in. FMEG was the only special attraction left, but chose to book profits for the past 3 months I held.

Very long ago holding:
Petronet LNG – the last time I analysed this, 2 years ago, it looked as if there was plenty of LNG capacity all over the coast-line pretty much. I may be wrong but looked as if Petronet was nothing special. Stock has kept strong though, amid turmoil.

Of remarkable interest:
Godrej Agrovet:
FMCG like PE, maybe because of the extremely long runway for growth here. But the actual growth looks severely lagging. I do not trust big brand names too much, it looks like they milk it too much. Look at majority of Tata group shares. Good management is not their monopoly and neither is innovation, just over-priced hype is left mostly.

Hope I am correct and this is useful to you. Thanks for sharing! Best of luck!

coolfundoo · January 26, 2020, 8:28pm

I hold Reliance & Godrej Agrovet & have full conviction in them. Planning to add on each dip if any.

Nibin_Issac · January 28, 2020, 4:59am

Godrej Agrovet is hitting new high which i believe is pre budget run and partly because of news coming on how Palm oil import is getting disrupted and imports are 9 month low.

Godrej agrovet is becoming expensive.

Nibin_Issac · February 17, 2020, 7:26pm

Q3
Sold small positions in

NBCC : redevelopment projects are stuck, not much progress in executing order books
GIC Re : back to back loss even with a monopoly in reinsurance market. corp protection is becoming a burden
Aditya birla capital : got higher allocation to L&T finance in existing portfolio which has got similar business

Increased allocation

ICICI Prudential : Life insurance story is in nascent stage , budget proposal on removal of tax exemption is negative but it will overcome. protection business is gradually increasing
Petronet Lng: Kochi Mangalore pipeline to be commissioned on march. Majority of pipeline is going through Kerala and there is a huge scope of capacity utilization in Kochi refinery.
Cochin Shipyard: Another good quarter , price has came down below IPO price. CPSE inclusion is a drawback .
ITC : Cigarette Tax hike, ESG factor all are playing on the stock and stock is hitting new lows. Long term story on FMCG/other business is intact. Added small quantity to average price.

New entrant:
Dabur: Added small position for tracking purpose . Company is a consistent performer, excellent rural reach , increase in hair oil market, likely nifty inclusion.

Endurance tech,Polycab, KNR construction, Reliance (Positive cash flow) , L&T Infotech, L&T Finance were having good Q3 result.

GMR infra reduce their loss , JSW energy is acquiring Kamalanga power plant and that will reduce the debt again. Airport sector is showing promising result , got approval to start operation in Greece, Duty free shops in Kannur aiport, operations in bidar airport . Betting on turnaround

Nibin_Issac · February 29, 2020, 6:31am

Markets down by 3k points . Added
HDFC BANK
DABUR
RELIANCE
KNR CONSTRUCTION
ENDURANCE TECHNOLOGY

I am planning to any one of HDFC LIFE or ICICI LOMBARD or ASIAN PAINTS if markets goes down further

Nibin_Issac · March 14, 2020, 4:46am

I started investing in 2007 during my college years. Brought a few quantity of Ashok Leyland at 55 rs by the recommendations a friend ( no techno or fundamental analysis…a big mistake though). After a few months markets crashed and recession begins , share price got down to 13 rs …got panicked and sold everything with huge loss ( panic selling during bear market …a big mistake) . If I hold on to my shares at that time it will be still be 2/3x with bonus and dividend. If I brought more shares at my sold price then it would be 10x . For last few years I am doing sip in mutual funds and direct equity.

Recent market crash is a deja vu for me and this time i brought more instead of selling. Increased allocation to HDFC Bank , Dabur and Reliance. ITC is a tempting buy also ICICI prudential.

saumya2010 · March 14, 2020, 6:32am

My view is to go slow in accumulating . this market wont make bottom(though market consensus view is 8500 yesterday was bottom) until corona makes a top.

Nibin_Issac · May 11, 2020, 8:53am

Black swan event certainly put my portfolio into negative zone , recent run up in nifty was a breather but still ~10% loss. i am still continuing with SIP in mutual fund. However sold some of shares when nifty hit 9800 and booked profit in KNR construction (price 230), Dabur (price 510) and redeemed some MF units to add cash. Added many companies in insurance sector into watchlist like SBI Life, HDFC Life, ICICI lombard . I am betting big on insurance sector as examples from other countries indicates that people will look for insurance after a pandemic. I haven’t bought any new shares and waiting for entire Q4 results to come out as i do believe that market is not factoring the impact of covid and it is just imitating global market . As i am working in a IT company, i can clearly say that many projects(BFSI, retail, airlines) in US & Europe is terminated and there will be severe Job losses in coming months. Many of these are not priced in shares

Some other events happened in existing portfolio

Reliance: Recent deals in Jio cement my conviction in reliance as a ‘Digital’ company. 1-2 years down the lane , Jio and Reliance retails IPO will come up and Reliance will become a holding company.
Aurobindho pharma : Sandoz deal called off which is a good decision as it is will reduce overall debt , USFDA cleared unit IV and there are news that unit-XII and Unit-X will get clearence . Pledging of shares by promoter increased recently.
Federal Bank : 4 lakh immigrants have registered with NORKA to return back to kerala , out of which 70k has lost job. Federal bank is very prominent among NRI and need to watch out how it will affect the overall deposits.
-ITC : increase in dividend payout is soothing but increase in sin tax is on cards
-SBI cards, HDFC bank results reduction in consumer spending
-Petronet Lng: Kochi Mangalore GAIL pipeline is almost finished work has resumed but this came as big negative .
https://www.newindianexpress.com/business/2020/mar/23/complaints-of-alleged-corruptionirregularities-against-petronet-lng-ceo-dharmendra-pradhan-2120517.html

Nibin_Issac · August 5, 2020, 8:35am

Portfolio update. Recent run in shares bring portfolio almost to pre-covid level. Not investing in march and april was a mistake but its a common dilemma across investors as nobody was able to predict this kind of turn around in shares. Current portfolio is tilted more towards life insurance, general insurance, AMC, natural gas and pharma. Planning to book profit in L&T infotech as it has got a tremendous run in last month

Exited GMR infra, KNR construction and booked profits in ICICI Prudential
New entrants ICICI Lombard, SBI Life
Increased holdings in Reliance, Aurobindo pharma , HDFC AMC, HDFC Life and Petronet LNG

SBI life -it has got the lowest cost among life insurers due to its large distribution network. Exposure to ULIP’s is similar to ICICI prudential. All 3 insurers are increasing protection business so the differentiation will be low cost so moved out of ICICI prudential to SBI life.
ICICI Lombard - best in class digital capability when compared to public sector general insurers and increasing their market share continuously.
Aurobindo pharma – D/E has come down to 0.16 and management expects it to be debt free by march 2021. EPS increased around 20%. Changes in Anti-RV guidelines is good for the company.
Petronet LNG - Much awaited kochi mangalore pipeline work is finished. opportunities are in galore like city gas , retail cng stations .
Reliance - Started SIP from last year onward and participated in rights issue. Similar to investment in Jio, retail will also get similar wave of interest. Reliance will be the best play in ‘Atmanirbar bharat’
Sterlite technologies - Recent commentary from management was encouraging but huge debt level is worrying. Plan to add more after 1-2 quarters
GMR - Exited completely, covid has derailed stake sale plan with JSW energy , Non aero revenue from airports will take time to recover. Will watch the demerger plan and invest in Airport entity once things go back to normal .
ITC , cochin shipyard: 5% dividend yield

Nibin_Issac · February 13, 2021, 7:40am

Updating porfolio after a long time . increased allocation to most of the shares and added PI industries, Sequent scientific and laurus lab . Got allotment to route mobile , indigo paints in between and sold with 100% profit . Protfolio is given a CAGR of 14% .
Planning to add more PI industries because of utilization of 2000 crore QIP and looking for pharma API acquistions . Laurus lab and Sequent scientific because of oppurtunties in pharma space .
NOCIL, Jamna Auto and Endrurance technologies in Auto space because of cyclical nature and begining of next cycle.
Laggards include L&T finance , federal bank , sterlite technologies which remains in portfolio for last 3 years. Biggest mistake was buying all at once during last bull run. I have not averaged these stocks as i am not really convinced on whether financials are really out of woods . Sterlite will take another 3-4 quarter to have better visibility on 5G evolution

Sudheer_Pal · February 13, 2021, 9:24am

Hi @Nibin_Issac

I still feel portfolio has more number of stocks, which in some way is limiting your returns.
You can take big bets on your biggest conviction, so if your bet turns true, you will be rewarded hugely.

For example insurance, make it minimum of 10% as its a secular play for next couple of decades.

Your biggest gain is LTI but the weightage is less (only 3.57). We often try to catch all theme in market, but selected theme are sufficient to make us rich, assuming timing and allocation is proper.

Its just my thought, not trying to superimpose on you.

Disclaimer: I have 10 stocks around in my portfolio and LTI and hdfclife is common within us.

Nibin_Issac · February 13, 2021, 10:06am

Thanks sudheer for your suggestion . My plan is to reduce the number of stocks to 15-18 range and focus more on Insurance (sbi life, Hdfc life, ICICI lombard) , AMC (HDFC AMC), Digital( Infosys, LTI, Reliance, Sterlite technologies) , Pharma (Aurobindo, Laurus, Sequent), Auto (Endurance), chemical( PI industries, NOCIL), FMCG (ITC)

planning to reduce Petronet lng, cochin shipyard , federal bank, LTFH,BSE even though some of them are giving high dividends

Aniesh7 · February 13, 2021, 11:50am

Good portfolio.
Btw top speciality chemicals stock missing. ? Any reason

Nibin_Issac · February 13, 2021, 1:58pm

I have NOCIL and PI INDUSTRIES from chemicals …planning to add deepak nitrate as well . deepak phenolic is a game changer as per my opinion

Nibin_Issac · September 5, 2021, 8:28am

Portfolio reaching a CAGR of 19.3% per year.

Made lot of churning during last months , sold some of cyclical stocks like Godrej agrovet, Jamna auto once it reached life time high and allocate more to NOCIL, Polycab , LTI , Sterlite tech, endurance tech.
Completly sold of cochin shipyard, Petronet , L&T finance, HDFM amc( i brought it during IPO, it ranked 1 at that time , now in 3rd position), Insurance companies (higer claims but not change in valuations) etc .
Entered tracking position into new IPO like Sona comstar, Burger king , KIMS
Entered into solara active and aegis logistics due to recent changes
Indiabulls real estate and adani ports are added in anticipation of real estate cycle and capex cycle

	A	B	C	D
1	Company	Allocation	Postives	X factor
2	Polycab	10.04	Holding from time of IPO and averaging up. Biggest wire and cable manufacturer + gaining traction in FMEG business. Project lakshya - generate revenue 20000 cr revenue by 2026. undervalued compared to B2C players	Raw material price increase + Not able to scale up B2C bussiness
3	NOCIL	9.35	Cyclical stock. Holding for last 2 years. 2nd largest Rubber chemical producer, china + opportunity .Current capacity is 70% and full utilisation by FY24 SEPTEMBER. Export to reach 40% by fy24	Cyclical in nature. Sunshine china is also increasing production . They might end up dumping in india. No implementation of ADD
4	Infosys	8.63	Brought shares using ESOP	increasing Attrition rates
5	L&T Infotech	7.61	Hokding from time of IPO and averaging up. Best in growth among Mid cap IT. Possible merger with mindtree down in line	High valuations + increasing Attrition rates
6	Endurance technologies	6.88	Cyclical Stock - Holding from time of IPO and averaging up. Aluminium casting, suspension, braking player in 2 & 4 wheels. Entry into ABS ,alloy wheels. Increasing orders from EV and Hybrid vehicles	Cyclical in nature . Europe business not ramping up.High Valuation
7	Laurus lab	6.84	CDMO bussiness + Laurus Bio. 2 Billion sales by 2025	USFDA insception for formulation and API’s
8	Reliance	5.48	Consumer facing business + Digital . Demerger of Jio and reliance retail business. 70000 cr investment in renewable	Too many diversification . Renewable energy capex begins
9	ITC	4.41	Value bet. Demerger of FMCG + 5% divided	ESG + SUTTI stake sale + Increase in taxation
10	Aurobindo Pharma	4.33	Deeply undervalued. Demerger of injectables bussiness + PLI scheme + Vaccines + biosimilars + entry into chineese market. Huge investment in capacity	Management quality + USFDA compliance issues + price erosion in USA
11	PI Industries	4.19	Best agrichemical, CMS player Best in class management + entry into API	Overvaluation
12	Sterlite Technologies	3.47	Cyclical stock. Holding for last 2 years. Upcoming 5G + Largest optic fibre manufacturer + 10K crore order book. Management changes , acquistions in recent time	Cyclical in nature . 5G capex is yet to catch up . Fibre prices are not coming upto 2018-19 levels. Not so minority friendly management
13	Federal Bank	3.26	Turnaround story. Book value is still less than 1. Scope to increase NIM to 4. Capabilities in digital banking+ entry into credit card bussiness + neo banking. Increasing market share in remittance. CEO appointment for next 3 years	ROA is still below 1% . Higher provisioning in upcoming quarters
14	IEX	2.88	Highest market share in power exchange	High valuations
15	Jubilant Ingrevia	2.76	Speciality chemicals taking over commodity chemicals + capex	Valuation reachs higher
16	Sequent scientific	2.59	Animal health API producer in india + Carlyle group management + Sequent 2.0	High valuations. Increasing ESOP
17	Jubilant Pharmova	2.59	Value bet . CDMO business + Speciality pharma business available in P/S of 1. Biosys + therapeutics huge opportunity	USDFA import alert + Less than expected ramp up in speciality pharma
18	CAMS	2.44	70% market share in mutual fund RTA	High valuation
19	Adani Port	1.85	Largest private port player. multiple acquisitions in recent times 40% market share in 2025 . Duopoly in ports bussiness by in 2025	Promotor group
20	Indiabull real estate	1.8	Merger with embassy group creating largest real estate player. Upcoming real estate cycle	Delay in real estate cycle
21	Sona Comstar	1.72	Best play in EV + 50%percent of order book from EV	High valuations
22	Syngene	1.44	SIP stock. 3000 scientists + crams+ drug discovery+ api facility in Mangalore + Bristol Myers deal	High valuations
23	Burger King	1.29	fastest growing QSR chain + low royalty fees compared to peers+ exclusive franchise rights + huge expansion plan. Acquistion of BK indonesia .Biggest QSR franchise with 1000 stores by 2025-26	High valuations
24	Solara Active	1.08	2nd largest API player in india + CRAMS revenue to get increase with Auro acquistion+ project 2025 + management change (Aditya puri in board)	Any compliance issues
25	Aegis logistics	1.06	Tracking position . Largest private player in LNG sourcing + logistics + JV with vopak	final outcome of JV

chaitanyakhanna · September 5, 2021, 12:13pm

Question - Why did u sell Cochin Shipyard? The valuation seems pretty decent. Can’t wait to understand your rationale here.

No orderbook overhang anymore.
The “Ship repair” business is expected to grow fairly well. It is also high margin.
Dividend yield is consistently 35-45%.
The new orders will still deliver low teen margins.
The capex is clearly outlined until FY23.

Nibin_Issac · September 5, 2021, 1:13pm

I brought cochin shipyard during IPO and was holding till now . It has got a very good management which is very rare among PSU . My only problem is promotor. Govt will start milking it’s once it price increases with OFS . Infact all these years share price has not gone anywhere, it’s still near the ipo price . It is part of cpse index and there were multiple selling in last 3 years .IMO, It will always trades lower due to this overhang .except for a few names market never gives fair value to PSU

Gaurav_Bhandari · September 6, 2021, 6:09am

Just wanted to understand what is the valuation criteria that you have used for marking some as high valuations.

Thanks,
Gaurav

Nibin_Issac · September 6, 2021, 7:14am

I follow both value based and high growth companies and special situations. EV/sales is the one criteria i look for companies except financials.for finacials book value along with ROA are the criteria. For cyclicals auto, chemicals, real estate are in the start of the upcycle even though shares run up ahead but their margin yet to peak out considering most of them did capex in recent times and it is yet to factor into sales. Eg NOCIL due to recent capacity expansion it will take atleast 2 years to reach full utilization
i still entered into Sona comstar, burger king and accumilating syngene , PI industries even though at high valuation because of business prospects and it will always trade in premium .