Omkar's Portfolio Analysis and Discussion

Earlier I used to focus more on Fund Manager but now I prefer fund houses with sound processes and which do not depend on star fund manager

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Similarly for mutual fund policy, origination can be from broking portal or bank branch

Anoop bhaskar is leaving IDFC fund management team, Manish Gunwani is the new head of equity. My investment thesis for IDFC Tax Advantage is ‘‘under review’’

Staying put with Axis LTE. IRR has fallen to 11% from start of investment. My judgment is IRR will bounce back to mid to high teens. I am not sure whether that will be 2023, 24 or 25. ICICI pru value discovery which is topping charts now were in bottom quartile for 4 long years from 2016-2020. Overall my patience levels are very high when it comes to under performance

On the portfolio level, continuing with the same portfolio. Looking to build positions in HDFC bank and HCL tech

Patiently trying to find opportunity where I can hold through multiple cycles and grow with the company. Following are my criteria as explained in the thread above

  1. Company with proven track record. I am not good at finding transformation from broken franchise to strong franchise rather I will invest when franchise is intact while growth is broken
  2. Management with proven history of excellent capital allocation
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The superior risk profile of Ajanta pharma because of diversified geography presence in branded generics comes at the cost. The margin hit this quarter and last quarter was because of following reasons

  1. Derivative hedging loss
  2. Pricing pressure in US and Euro fluctuation
  3. Freight cost

All these 3 factors are related to non-India business. As per my thesis, this diversified geography model (especially in branded generics) will help Ajanta to mitigate geography specific regulatory risk better and create superior wealth over long term compared to only India focussed branded generic business like Abbott. Therefore I am ready to accept the cost which comes along with it. Abbott’s P&l will always have less moving parts which makes it very attractive but risks comes from nowhere and that is why I am ready to accept margin volatility for some period as long as brand franchise is intact. Therefore I still believe Ajanta pharma deserves better allocation in my portfolio as compared to Abbott

Current Allocation
Ajanta Pharma ~10%
Abbott India ~3 – 4%

Eris Life science – As per my judgment - business model focussing on acquiring brands for growth is less attractive to me as compared to launching brands organically. I am not convinced with capital allocation abilities of Eris’s management

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