I have formed a portfolio for brother with the aim of compounding at 30% per annually for next few years (5 years)
- Manappuram Finance - 15% - Playing NBFC theme with their business restructuring resulting into entry into housing/vehicle/sme
- L & T Finance Holding - 12% - Same as previous one but looking into ROE driven restructuring of business. Their parent arm is bagging projects in defense/infra etc which would be funded by LTFH
- TATA Investment Corp - 15% - Good dividends, safe play of Tata Companies & other investment opportunities. NAV of their investments is quite high to the CMP.
- Mahanagar Gas - 8 % - Playing the tailwind of pipe LNG supplies for domestic/industrial/commercial, drive towards the CNG for vehicles due to environment reasons.
- RBL Bank - 10% - Playing banking space, public to private shift, promoters with high aim & low NPAs comparatively.
- Jubilant Life Science - 6.5% - Playing pharma theme which is under depression. Planning to adding it in a SIP mode for an year or so.
- Cash - 32% - for new opportunities & SIP in above portfolio. Max Allocation would be 20% per business.
Planning to add 2 to 3 businesses to the portfolio.
Any views/deliberation could greatly help? Adding Hitesh as I was seeing his PF thread brainstorming being too educative… @hitesh2710
Portfolio returns are determined by the companies you select and the price you pay for those companies. If one gets the two things right along with proper allocation then returns can be great at portfolio level.
I like the list of companies you have but I cant see manappuram growing at 30% cagr. Plus the portfolio as it stands now seems to be too much financials heavy. That maybe needs a rethink or a rejig.
Buying stocks at below fair value is important . For example Tata Investment ( NAV discount varies from 70% to 30% ) . One should buy the same when Nav discount is highest ie near 70%
High sector concentration is an issue with your portfolio
Finally temper your return expectations …
Thank you sir!
I agree that the portfolio needs a rejig but the baseline of my portfolio is to protect the downside as I am constructing portfolio when markets are at all time high & unable to find the B2C businesses with consumption theme at lower price earning multiples.
I could consider FMCG biggies Britannia, Asian Paints, Pidilite but they are available at higher multiples. A bit confused here.
Also, tried considering the tyre stocks but the raw material fluctuations seem to hit the profitability making them more of a cyclical play.
Kalyani steels is on my radar which may get benefited from Make in India in defense sector due to it’s proximity to Bharat Forge.
Thank you Shailesh. The main reason for buying the TATA Investment Corp is by looking at it’s non-current investments & Chandrasekaran at the helm of affairs focusing on restructuring that would potentially increase the value of shareholders. Also, the yield is 3% here for me.
Looks a bit finance heavy as others have already pointed out. You might look into some other sectors.
Don’t know much about any of the companies other than Manappuram Finance about which I have done a bit of research recently and seemed like a fairly good company to me.