Hello All,
I’ve been an investor in markets since 2018. I initially started buying single stocks to gain confidence and moved on to allocate more for ideas that I like. I luckily got to invest a substantial capital around May’20 post market fall, and therefore had the better pie of market recovery.
Since past 2 years I’ve been trying to learn more and more about investing, long term investing in particular. The aim is to build strong convictions in scripts to identify macro and micro themes, better preempt industry changes, margin expansions, re-ratings before market does and thereby earn a decent CAGR on investments.
Luckily again, I was able to follow good independent investors on primarily Twitter, and discovering good financial apps, forums and subscriptions that has helped me gain more knowledge and awareness. Hoping for the same and more from this forum.
Please find below my current portfolio along with allocation. Request suggestions, views and improvements. Thanks.
Allocation % is based on current value (21-Jan-2022). I understand that there are perhaps few stocks too many and therefore I’m looking to exit some holdings for better portfolio management.
Disc: Holding since IPO: SBI Cards, KIMS, Clean Science, Aptus Value, Nuvoco Vistas, CarTrade Tech.
| Equity Portfolio | ||
|---|---|---|
| Stock | Investment Price | % Allocation |
| Polycab | 724 | 11% |
| Clean Science | 900 | 8% |
| IRCTC | 178.6 | 6% |
| Globus Spirits | 579.95 | 5% |
| KIMS | 825 | 5% |
| Astral | 988.86 | 5% |
| CAMS Services | 1315.26 | 4% |
| Hinduja Global | 1468.78 | 4% |
| HCL Tech | 643.09 | 4% |
| IEX | 100.48 | 3% |
| CDSL | 665.6 | 3% |
| Aptus Value Housing | 353 | 3% |
| Bajaj Finance | 2832.94 | 3% |
| Gland Pharma | 2759.69 | 3% |
| HDFC AMC | 2000.75 | 3% |
| Happiest Minds | 582.13 | 3% |
| IDFC First Bank | 43.53 | 3% |
| Deepak Nitrite | 2151.39 | 3% |
| SBI Cards | 755 | 2% |
| HDFC Life Insurance | 564.42 | 2% |
| Nuvoco Vistas | 570 | 2% |
| Deepak Fertilizers | 393.74 | 2% |
| Rajratan Global | 1900 | 2% |
| Panama Petrochemicals | 313.87 | 2% |
| Cartrade Tech | 1618 | 1% |
| Laurus Labs | 357.97 | 1% |
| Sona BLW Precision Holdings | 369.59 | 1% |
| ITC | 229.75 | 1% |
| Anjani Portland | 313.73 | 1% |
| Indiamart Intermesh | 2380.07 | 1% |
| Jubilant Ingreiva | 614.5 | 1% |
| Indusind Bank | 1556 | 1% |
| Ishan Dyes & Chemicals | 118.55 | 1% |
Adding short thesis/rationale for these picks:
Basically the portfolio is a combination of overall three factors: Macro Themes, IPOs, Growth and Coffee Can Methodology.
Polycab: Proxy play to home development theme. Strong distribution/dealer network, good return ratios and lofty future outlook including ramp up of FMEG business. Long term outlook intact despite recent spike in Raw Materials.
Clean Science: Strongest specialty chemical business (highest return ratios). MOAT is in the way products are manufactured - innovative and cost efficient. Exports to China itself.
IRCTC: Combination of Monopoly Business + Platform. High pricing power, also mass adoption of online ticketing further enabled by COVID (change in user dynamics itself)
Globus Spirits: Grain based manufacturer of alcohol (ENA). Direct beneficiary of ethanol mixing initiated by Govt of India. Foray into premium alcohol brands that can expand margins
KIMS: One of the largest hospital chain in Andhra, Telangana. Superior Operating Performance as compared to peers (Net Debt Free, High ARPOB, good return ratios). Acquisition of Sunshine Hospitals to further enable growth. Marquee funds and FII’s invested adds confirdence.
Astral: Another proxy to home development theme + Coffee Can characteristics. MOAT in strong dealer/distribution network. Entry into adjacencies (Tanks, Adhesives driven by demand) to further assist growth.
CAMS Services: High market share in oligopoly industry. Proxy play to increase in Mutual Funds percolation in Indian populace. Further growth to be enabled by Account Aggregator framework.
Hinduja Global Solutions: Net Debt free company leading to PE re-rating, strong BPO services. Value stock when discovered and international presence. Recent governance issues being monitored.
HCL Tech: Coffee Can stock, consistent performer, decent growth inline with industry peers along with good acquisitions.
IEX: Platform business. Consistent increase in power volumes exchange quarter on quarter from its platform. Good return ratios and growth run up.
CDSL: Direct beneficiary of greater acceptance of equity investing in India. Oligopolistic industry and high entry barriers.
Aptus Value Housing Finance: Granular small ticket loans, consistent growth in disbursements, secured loan book and good collection efficiency. Proven underwriting techniques as evident in GNPA & NNPA % despite lending to first time to credit customers as well as self employed people. ROA and ROE profile is good. Valuations on higher side.
Bajaj Finance: India’s best NBFC (coffee can consistency), transitioning into prime FinTech in future. Largest retail player and superior performance even in COVID headwinds.
Gland Pharma: Leading player in injectables, best production facilities as no USFDA observation ever received. Consistent growth and good presence in outside markets. Strong margin profile and negligible debt.
HDFC AMC: Consistent performer in terms of AUM however facing headwinds due to inconsistent performance of its funds. Defensive stock and provides portfolio diversification.
Happiest Minds: Proven track record of promoters, highest levels of corporate governance and aim to being a complete digital company. Still a lot to learn about this company, claims to be one of the only five digital companies in the world.
IDFC First Bank: Holdings from merger with Capital First, which had proven business model with retail loans and consistent performance amongst small NBFCs. Good improvement in bank’s liability profile with sticky funds, enabling good growth in future. Increase in number of branches and diversified asset profile, and a large BNPL player.
Deepak Nitrite: Backward integration into Phenol whilst pursuing more value added products downstream. Excellent track record and ambitious targets incl import substitution to look forward to.
SBI Cards: Holding since IPO but exited partially, largest credit card player and the only one listed. Highest cards in force amongst all banks and strong DSA network.
HDFC Life: Another coffee can compounder, Growing VNP Q-o-Q consistently. Defensive stock and portfolio diversifier
Nuvoco Vistas: Largest cement player in East and North markets which are incidentally the fastest growing markets in India. Debottlenecking, Brownfield capex and achieving synergies with merged companies should provide for better Operating Margins Q1FY23 onwards. Also focus on increasing share of premium brands (higher margins) in revenue mix.
Deepak Fertilizers: Largest TAN manufacturer in India with backward integration into ammonia to assist margin expansion. Capex and Deleveraging key variables to look forward.
Rajratan Global: Market leader in niche but important product. Product being immune to disruption by EV and consistent performance with service to major tyre manufacturers along with good operating performance.
Panama Petrochemicals: Increasing share of speciality products with high margin, with diverse applications. Found value in this company when market was otherwise overheated.
CarTrade Tech: Growth through organic traffic, can benefit from automobile upcycle. Beaten down only for valuations, however, a good learning for me to not apply in 100% OFS IPOs. Will wait and watch.
Laurus Labs: Biologics to lead the way forward for growth along with new APIs, FDF growth intact. Sales target for FY25 achievable and a tracking point. Good track record of promoters.
Sona BLW Precision Holdings: Proxy play to EV theme. Constant innovation, catering to major auto players and superior return ratios.
ITC: Bought at technical breakout of 230 levels for tracking purpose. High dividend yield and better margin of safety.
Anjani Portland: Fundamentally solid cement company, exceptional operating performance. Recent acquisition of Bhavya cements to further support top lines along with expanded capacities.
IndiaMart Intermesh: B2B marketplace, organic traffic and value added services along with prudent acquisitions while being profitable at the same time. Faced COVID headwind well. Buyer/Supplier stickiness to be monitorable going forwards.
Jubilant Ingrieva: Initiated research on this company by adding in small quantities. Captive plants for raw materials as well as diversified applications, adding to new capex gives significant revenue visibility
IndusInd Bank: Invested in erstwhile Bharat Financial Inclusion Limited and got IndusInd Bank after merger. Bank has a large portfolio of auto loans however due to recent loan evergreening and overall governance questions marks, may exit on the bounce.
Ishan Dyes & Chemicals: Bought for tracking purposes and learning. Blue pigments find lot of applications and company getting orders from outside India proves quality in products. Scale up of business key monitorable.
Disc: Also hold one share of Adani Enterprises for Wilmar IPO shareholder category eligibility.