My Portfolio- Why I own what I own- Veni Kothari

Stock Opportunities
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Why I own what I own!

  • Polycab (25%)- Entry Price- 2200, Average Price- 4000, CMP- 5400

  • Tailwinds in power, infrastructure and real estate.

  • Foray in FMEG- Higher capital efficiency business, natural synergy- May not work but still nothing to lose as invested capital is less.

  • Home innovation products with the acquisition of Silvian labs (small company) but shows management’s focus on this big market.

  • Setting up capacity for Extra High voltage cable which will get operation in FY25.

  • Setting up distribution network/warehouses in US for wires and cables.

  • Aspiration to come from Top 10 players into Top 5 players in wires and cables.

  • Dilip Buildcon (25%)- Entry Price- 367, Average Price- 330, CMP- 395

  • Buying the pessimism strategy- Lot of pessimism in the price.

  • Order book of INR 25,000 crores plus gives revenue visibility.

  • Target to become net debt free in the next two years through monetization of assets to Alpha Alternatives INVIT.

  • Arvind Ltd (10%)- Entry Price- 175, Average Price-200, CMP- 265

  • Growth in advanced materials (technical textiles) to improve capital efficiency.

  • Tailwinds in the garments and fabric division due to UK FTA.

  • Revival of denim with supply side being consolidated and demand slowly and steadily increasing.

  • Very huge land bank to further bring down the debt.

  • DCM Nouvelle (8%)- Entry Price- 170, Average Price- 175, CMP- 180

  • Foray in specialty amines to change the quality of bottom line.

  • Mean reversion of margins in yarn business.

  • Strong promoter pedigree- the promoter is from Carnegie Mellon and the nephew of SRF MD- Mr. Arun Bharat Ram.

  • Arvind Smart spaces (8%)- Entry Price-400, Average Price- 355, CMP-415

  • Bullish on prospects of Ahmedabad and Bangalore real estate market.

  • Asset light business model, JDA’s with land owners.

  • Horizontal development rather than vertical development which makes the project turnaround faster.

  • On ground channel checks suggest no dealing in cash- Only bank payments accepted.

  • 20 Microns (6%)- Entry Price- 155, Average Price- 172, CMP- 190

  • Ancillary to paint- supplier of extended inorganic pigments- Kaolin and calcium carbonate.

  • Tailwinds due to lot of paint capacities coming in.

  • Reasonable growth, cash flow conversion for the last 10 years above 70% and decent capital efficiency of 15% ROE.

  • Consistent compounder at reasonable valuations.

  • Carborundum Universal (4%)- Entry Price- 1160, Average Price- 1130, CMP- 1100

  • Leader of the material world with Innovation at the core.

  • Strong promoter pedigree and a visionary mindset.

  • Diversified application of the product portfolio.

  • Lot of optionality in the product portfolio.

  • V-Mart (4%)- Entry Price- 2000, Average Price- 2036, CMP- 2030

  • Buying the pessimism strategy

  • Good management in a good business at reasonable valuations.

  • Play on value consumption which is the belly of the Indian market.

  • Challenges there in online- Limeroad, store aesthetics but management will figure it out !

  • Less than 4% position cumulatively around 10%

  • Voltamp Transformers

  • Bharat Bijlee

  • Tata Power

  • Chembond

  • Vodafone Idea

  • SW Solar

  • Emudhra

6 Likes
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I am studying SW solar I still I am trying to figure out their MOAT in EPC business, promoters selling is not a big deal as Shapoorji Pallonji group is under a lot of debt and this is business is not their focus, also since Reliance has entered I am assuming it will receive a lot of EPC contracts for their upcoming capex for solar plants they had announced to be built in jamnagar, they have also won a lot of orders in Nigeria and raised a QIP so there is revenue visibility too, could you please share your thesis on SW solar.

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On Vmart I did not like management decision to lower ASP and instead of focusing on premiumisation they are focused in value growth so an investor I do not like the fact that they are compromising on margins, I know the founder is focused on the value segment and want to target lower middle class and also he is visionary and smart I just do not like this strategy, though valuations are cheap and although Lime Road is making losses I think the intent was right and they did not overpay for Limeroad acquisition it just did not workout well and they have realised their mistakes and focused on reducing their loses.
Also I am not very confident about about their MOAT, only comfort is valuations.

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hi Veni, Good job with stock picks and entry points.

curious about your investment thesis on VI…

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I myself is adding SW solar. After SP is done with their selling. The Co. can perform really well. More selling will come in future. Reliance target of going net zero emission by 2035 will play a big in Co’s success. We can expect +ive results in near quarters.

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Emudhra company may mot to hai. But competitors jyada hai. CDSL, NSDL, Anlankit may more companies are

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I am unable to do valuation for the company and determine its value, for EPC business they can do 10% OPM and O&M has around 23% OPM, they have a Rs 3106 cr order book, so for an EPC business what is a fair multiple and are the incoming of reliance orders already priced in, I know the future is good for SW Solar but I am unable to quantify it to figure out the upside for this stock.

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Well, Vodafone Idea is a tracking position.

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SW Solar is buying the pessimism- Debt should subside with the QIP and promoter contribution. There is very little entry barrier in the business- agreed. With the positioning and past track record of execution that they have they are well placed to get orders. Solar capacities will increase manifold, there could be a big jump in revenues, it could even grow at what EMS companies are growing at. Investment thesis is nothing but sectoral tailwind and reasonable valuations.