My portfolio - Pratik

Hello fellow ValuePickers,

I hope I am not breaking any guideline as this is my first topic on VP.

Following is my portfolio. I would really like feedback from you guys. Critical points are especially welcomed.

Sterlite Technologies - 30%
This business is a beneficiary of data explosion that we are witnessing right now. It is the only business having coverage of entire vertical from silica to fiber. Current capacity utilization is more than 90% and demand is strong. More capex being commissioned. Many telecom players are upgrading/increasing their network and this creates demand for optical fiber. With really low penetration of internet in India, we will probably see more tailwinds for this business for quite some time at least domestically. I do realize that margins are at peak and will not remain the same. Even then I believe this business could do well considering sectoral tailwinds and it’s unique position. Some people think this a cyclical/commodity kind of business but I don’t get that, I would like to understand that though.

Tejas Networks - 27%
Again a business which is beneficiary of data explosion and increasing data networks in India. This business is about manufacturing devices which are used in latest data networks. They call their devices “Software defined Hardware”. Basically, these are the devices/hardware which can be upgraded as network grows. This enables network providers to upgrade their system without having to change hardware which is costlier than changing software. This is a very simplistic explanation but I don’t want to go in much details here. They claim to be spending more than 50% of the expenditure on research and development which is a positive point as long as we see their top line growing (which means their research is in right direction). They received orders from Governments of Mexico, Bangladesh and India. In India, they did get orders for BharatNet scheme phase 1. Phase 2 is expected to start.

KCP Ltd. - 20%
Sort of a value buy(?). Conglomerate of about 5 businesses(Cement, Sugar, Power, Engineering, Hotel). Last three businesses are not doing good and hence the valuation is much low compared to other cement players. Amravati development can potentially create demand for Cement business. However, management doesn’t seem to be ambitious and vibrant enough. Their cement segment has not delivered good results in last few quarters. I am planning to reduce this holding to 10% when I get chance. Right now, stock price has corrected significantly.

Suprajeet Engineering - 14%
This is very well discussed business. check Suprajit Engineering for more info. Apart from obvious positives, I like the fact that company is being run by the founder and while looking at some videos of the company I noticed that the founder was wearing the same uniform that most employees wear. That is a good sign IMHO.

Edelweiss - 4.2%
Excellent management. They have many segments which have potential to grow significantly as India goes from 2.5 to 5 trillion economy within next 10 years. Specifically, their corporate lending segment can grow significantly as many players are facing NPA issues. Also, with infra cycle expected to start we can see a situation where demand increases and supply remains constrained. I also like their mutual fund business. This is my long term position and I plan to accumulate slowly and gradually as I think the valuation is not cheap right now. This is why it is just about 4% of PF right now.

Any suggestion/question will be helpful.

Thanks a lot!

Hi
i will sell everything except edelweiss and buy solid 20% growers like hdfc bank kotak indusind titan to start with.
To build a portfolio you need to have some solid compounders + value buys + high growth companies in the ratio of 35 + 30 + 35. I repeat Its just my view.

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But there are no value buys in current market for the high growth companies you have mentioned. :grinning::grinning:

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value buys and high growth companies are different. i just mentioned the steady 20+ growth companies as an example. they are not high growth companies.

Thanks for your honest view. Question is how much price would yoh pay for steady compounders?! This is certainly not a time to buy them. Buying high quality compounders at high valuations can result in sognificant under performance over long term and opportunity cost would be even higher.

Who knows where the market will go . I mean to say go up or go Down. It’s very very diff to time the market.i never buy stocks looking at nifty or sensex.
If your stock fundamental is ok and if it’s not the leader of last bull market you might get you money back within 3 years as dreaded
of the bear market normally dont last more than 18 months. So even in11700+ there might be some opportunities. But best opportunities for investors comes in a bear market.

i believe that the maximum correction that can happen to any index is not more than 10%, if that happens. The indices will move only up from now if India has to grow, it has the desire of the momentum of youth to capitalise.
But buying a stock should be on sound fundamentals like consistent growth>15%, consistent profitability>15%, a management to wear our any uncertainties, lower debt structure etc.
But there are players in the market who disrupt all these fair thinking, so at the very end, its 50% luck and 50% hard work.

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