Prateek's Investment Journal

[prateekv]

Hello, my name is Prateek, and I am in my late 20s. I began my investing journey in mid-2021, despite coming from a family with absolutely no background in investing. Initially, I was drawn to the idea of making quick money through stocks after coming across popular (and often misleading) YouTube channels and influencers. At the time, I spent most of my energy deciphering what these influencers were buying, only to realize later that this approach was neither sustainable nor prudent for long-term wealth creation.

Subsequently, I began educating myself by reading a couple of books on investing and engaging with communities like this forum. While I’ve mostly been a silent reader here, I am starting this thread to stay accountable to myself and document my thought process transparently.

Key Insights and Learnings
Over the last 2–3 weeks, my approach and conviction have been tested due to the fierce correction in several stocks I hold. While I believed I had robust risk management strategies in place (e.g., price alerts and stop-losses), I was not prepared for back-to-back lower circuits in certain stocks. This prompted me to rethink my entire approach.

Until now, my primary sources for stock ideas were Twitter and this forum. However, I have now decided to go back to first principles by:

1. Screening stocks based on earning triggers and fundamentals,
2. Conducting deep research, and
3. Waiting for attractive buying levels with a higher margin of safety.

Current Portfolio Allocation
My wealth is currently 100% in equity (direct stocks, mutual funds, US stocks, and a Bitcoin ETF), except for emergency funds. However, I’ve recently recognized the importance of diversification and decided to include gold in my portfolio. Below is the rough split of my portfolio:

Class	Allocation
India Stocks	75%
India Mutual Funds	10%
US stocks	12%
Bitcoin ETF	3%

Key Notes:

• Gold: I was initially skeptical about gold but now plan to periodically add gold during significant corrections for better asset allocation.
• Bitcoin: I aim to increase my Bitcoin allocation to 5–6% in the coming months. While I speculated on cryptocurrencies in 2021 (and burnt my hands), this time I’m sticking exclusively to Bitcoin due to its legitimacy and growing acceptance, especially after events like Donald Trump’s re-election.

Mutual Fund Investments

• PPFAS Flexi Cap Fund: A long-standing part of my portfolio (>2 years) to which I haven’t added or sold any units during this time.
• Old Bridge Focused Equity Fund: Invested during its NFO, holding since then.
• Helios Financial Opportunities Fund: A recent addition to gain exposure to lending and financials, as I prefer professionals to manage leveraged businesses.

Indian Stock Portfolio
I have avoided adding new money to my Indian stock portfolio for the last few months due to concerns over high valuations and volatility. Before the budget announcement, I took a cash call of 10%, expecting increased market volatility, but redeployed this cash post the Delhi election results.

However, last week’s extreme volatility was an eye-opener. I sold some low-conviction and speculative holdings, redeploying the funds into NiftyBees for stability. My rationale is that staying out of the market entirely poses its own risks, so I prefer to keep my cash invested in NiftyBees for now.

Goals Through This Thread

• Hold myself accountable by sharing my thought process transparently.
• Build a sustainable, research-backed investment approach based on first principles, rather than relying on noise from social media or influencers.

Stock Name	Weight	Avg Purchase Price	Current Price	Profit/Loss %
All E Technologies	12.55%	321.51	430.15	33.79%
Infollion Research	11.23%	389.24	384.95	-1.10%
Narayana Hrudayalay	9.69%	1138.80	1328.25	16.64%
Zaggle Prepaid Ocean	5.57%	388.22	347.15	-10.58%
Laurus Labs	5.50%	504.32	546.20	8.30%
Macfos	5.15%	838.57	784.00	-6.51%
Kama Holdings	4.62%	1906.69	2533.85	32.89%
International Gemmol	3.30%	508.79	452.30	-11.10%
EFC (I)	3.29%	254.14	245.15	-3.54%
Pennar Industries	2.73%	159.54	143.90	-9.80%
Godawari Power & Isp	2.47%	178.46	169.52	-5.01%
GMM Pfaudler	2.46%	1201.18	1126.10	-6.25%
Multi Commodity Exch	2.38%	3371.26	5443.70	61.47%
Apollo Micro Systems	2.32%	124.46	113.78	-8.58%
Neuland Laboratories	2.59%	13,555.18	11,825.25	-12.76%
Praveg	2.23%	674.39	610.90	-9.41%
Aditya Birla Capital	2.23%	171.89	152.74	-11.14%
Nuvama Wealth	1.85%	5718.33	5287.75	-7.53%
Kotak Bank	2.85%	1936.70	1952.40	0.81%
NIFYBEES/Cash	14.99%	257.51	256.95	-0.22%

Some of these names are recent additions after securing gains from earlier holdings. In this financial year, I have realized profits equivalent to approximately 20% of my current portfolio value. Any position below 2-3% of the portfolio is considered a starter position, with the goal of increasing exposure as I build higher conviction through in-depth research and quarterly earnings analysis. I also incorporate technical analysis to determine optimal entry points for initial purchases and strategic averaging up. Below is my investment thesis for the top positions in my portfolio:

All E Technologies

• IT solutions; well-positioned to capitalize on digital transformation across key markets (US, India, Africa).
• Trustworthy, Competent, Efficient management.
• Management set an internal target of 25% growth over 10 year period. Has been growing consistently in last few quarters with good cash flow conversion.
• Functions as an ancillary business to Microsoft’s ecosystem, benefiting from its growth momentum.
• Initiated position in May 2024 when stock was available at 25x TTM PE. Have scaled up position since then.
• Currently at 34x TTM PE, which looks reasonable for Hold.
  
  

Infollion Research

• Positioned as a one-of-a-kind listed business in India with inherent network effects that can create a competitive moat.
• Management Quality: Competent and trustworthy leadership; FY25 is projected as a growth year, supported by recent positive quarterly updates.
  
  
• Clear management guidance and upward business trajectory suggest substantial upside potential in the coming year.
• Risks: My convinction in the business has been slightly shaken in past month as I experience the quality and efficiency of the open source Deepseek R1 model. OpenAI came up with the Deep Research Product. Google also has one and now Perplexity is offering it for free. With all these technological developments, I am not entirely sure about sustainability of business here.
  
  

Narayana

• Leading healthcare provider delivering cost-efficient, high-volume services in India and Cayman.
• Trustworthy, Competent, Efficient Mangement
• Benefits from rising healthcare demand, favorable demographics, and increased health awareness.
• Recent investor presentation outlines ~30% growth from existing bed capacity.
• Highest efficiency ratios in listed space with lowest valuation.
• Insurance business is an optionality.
  
  

Zaggle

• Management guiding for very aggressive growth of >50% CAGR, albeit at the cost of operating margins. Although they guided operating margins to gradually go back to 15-16% range over a 3-4 year period.
• Scalable: With over 3,100 corporate customers and 29 lakh users, Zaggle is well-positioned to scale further by shifting focus to larger clients and increasing interchange fee revenues.
• Strategic international expansion, especially into the US market, presents significant long-term upside despite competitive challenges.
• Risks: No moat, no network effects. Need to study more to scale up position.
  
  

Laurus

• Non ARV pie is growing. Management guided for 20% EBIDTA margin for FY25 i.e., NCE CDMO project deliveries start from Q4.
• New growth drivers: CDMO, biologics, advanced therapies (cell and gene therapy)
• Significant capex done in last 4 years.
• Expecting very good numbers in Q4 before scaling up the position.
  
  

Macfos

• Platform business for electronic components with over 12,000 SKUs, creating a moat through deep technical expertise and a one-stop solution for customers.
• Competent management, have been scaling the business very well. Trailing SageOne here so believe there are no CG issues.
• Founder-led, first-mover advantage in India’s niche e-commerce market.**
• New growth driver: Robu 2.0- creation and expansion of proprietary brands in addition to the current distribution business (Transition towards asset light model?)
• Initiated a position in July 2024 when stock was available at ~50x TTM PE. Scaled up position while it was falling, now below initial purchase price.
  
  

Kama Holdings
Kama Holdings is the holding company of SRF Ltd. SRF has been in the sideways trend for about 3.5 years. I started my position in Kama Holdings approximately two years ago after reading an insightful letter from Solidarity PMS , which laid out the investment case for SRF and its holding structure. However, in hindsight, the opportunity cost has been significant as SRF faced multiple headwinds during this period. While Kama Holdings has consistently distributed dividends received from SRF and engaged in shareholder-friendly actions (e.g., issuing a bonus to enhance liquidity and buying back shares), the stock continues to trade at its highest-ever holding discount to SRF’s value.
While SRF has shown technical strength by moving above its base, Kama Holdings remains below its 200-day moving average , indicating continued weakness or lack of market confidence. I will scale up my position once I started to see some green shoots in SRF’s earnings over next few quarters.

Disclaimer: I am not SEBI-registered. No recommendation to buy, sell or hold these names. I am heavily biased. I may sell my shares at any point based on my stoploss.

[prateekv]

Two Weeks of Turbulence: A Portfolio Update

It’s been a wild couple of weeks since my last update. The market’s volatility has put my risk management strategies to the test, and I’ve had to make some tough decisions.

Exits and Reflections

I’ve exited several positions that hit my stop-loss levels: IGIL, AB Capital, GMM Pfaudler, Neuland, Praveg, Apollo Micro Systems, and Nuvama. It’s never easy to sell, especially when some of these companies look fundamentally attractive.

• Nuvama: It’s tempting to look at Nuvama’s low TTM PE (21x) and decent dividend yield (2.6%) compared to peers like Anand Rathi and 360 WAM. However, I need to dig deeper to understand if the discount is justified, considering its capital markets-dependent business. Plus, with Angel One entering wealth management and mutual funds at a TTM PE of 14x, and Motilal Oswal trading at just 10.7x, I need to consider where the best value lies.
• GMM Pfaudler: Trading at a TTM EV/Sales of 1.8x, GMM Pfaudler seems undervalued, especially considering its acquisitions and consolidation efforts aimed at improving operating margins. Its peer, Standard Glass Lining, is trading at a much higher multiple. While I appreciate GMM Pfaudler’s resistance to equity dilution, I’m concerned about the industry headwinds and will be closely watching their order book and debt levels. Trying to catch this falling knife taught me that price supports mean little in a panic-driven market.
• IGIL: The limited trading history made me uneasy, and the potential risk of lab-grown diamonds impacting certification demand led me to exit before the earnings release. Although an excellent global business, valuations did not seem compelling.
• Praveg: I was hoping to capitalize on their recent capex and potential margin expansion as occupancy rates rise. However, the demand environment remains uncertain. I’ll revisit this story once the stock shows some technical strength.
• AB Capital: Cheap on paper at 1.4x P/B, but the exit was purely technical. The corporate restructuring from a holding company to an NBFC presents a special situation and a potential re-rating opportunity.
• Neuland Laboratories: While the company has guided for a strong FY26, I’m unsure how much of that growth is already priced in after the stock’s impressive run since 2022. Promoter selling added to my concerns.
• Apollo Micro Systems: This was a special situations bet based on a preferential issue and anticipated large order. I’ll wait for that order to materialize before reconsidering, given their history of equity dilution and negative cumulative cash flow.
• Pennar Industries: Despite being cheaper than Interarch, the market seems skeptical of their capital allocation decisions. I’m also wary of mistaking PEB as a structural play rather than a cyclical one.

Adjustments and New Positions

With the cash freed up, I’ve made a few adjustments to the portfolio:

• Kotak Mahindra Bank: I increased my position to 4%.
• HCG: I initiated a 4% position in HCG, a special situation play with KKR acquiring a majority stake. I plan to increase it further if the price drops below ₹500, betting on improved operational efficiencies under the new management.
• NCL Industries: A small cement player trading below replacement cost caught my eye. I’ve started with a 1.5% position, recognizing it as a potential acquisition target.
• Religare: A 1.5% starter position based on the recent management change. I need to understand why the Burmans were so eager to acquire this company.
• Mutual Funds: I added to my existing positions in PPFAS Flexi Cap Fund, Old Bridge Focused Equity Fund, and Helios Financial Opportunities Fund.

Currently, cash and NiftyBees make up ~29% of the portfolio. I plan to deploy this cash gradually, focusing on domestic market plays given the global trade uncertainties.

Here’s the updated breakdown of my portfolio:

Stock Name	Weight (%)
All E Technologies	11.28
Infollion Research	11.12
Narayana Hrudayalaya	11.07
Laurus Labs	5.65
Macfos	5.22
Kama Holdings	4.65
Kotak Bank	4.38
Zaggle	4.38
HCG	3.80
Godawari Power & Isp	2.41
MCX	2.30
EFC (I)	1.79
NCL Industries	1.44
Religare	1.41
Cash	2.30
NiftyBees	26.80

Key Learnings from the Downturn

This market correction has provided some valuable lessons:

• Position Sizing and Liquidity Risks: I underestimated the impact of illiquidity when sizing my positions in Infollion and All E Technologies. Even with strong fundamentals and transparent management, illiquidity can amplify losses when top holdings underperform.
• Taking Profits in Strength: I failed to book profits when Macfos, Infollion, and All E Technologies were significantly above their 40-week exponential moving average. I was also in denial about Zaggle’s overvaluation and margin compression. Markets punish decelerating growth rates harshly.
• Bottom Fishing in Choppy Markets: Trying to catch falling knives in GMM Pfaudler and Praveg proved to be a costly mistake. In a market downturn, no support level is truly safe.

US Portfolio and Bitcoin

My US portfolio also experienced volatility, triggering stop-losses in GOOGL, COIN, IBIT, HOOD, and CRWD. My current holdings are INMD, AMZN, and INDA ETF (as a proxy for cash). I went wrong with Bitcoin. I expected it to behave like GOLD. In actuallity, it behaves more like leveraged Nasdaq index. Here is my US Portfolio:

Stock Name	Weight (%)
Amazon	14.54
Inmode	7.90
MSCI India ETF	53.29
Cash	24.27

Looking Ahead

I anticipate high portfolio churn in the coming month due to tax-loss harvesting. My focus will be on simplifying the portfolio, aiming for 15-18 core holdings to free up mental bandwidth.

Disclaimer: I am not SEBI-registered. No recommendation to buy, sell, or hold these names. I am heavily biased. I may sell my shares at any point based on my stop loss.

[vasu2]

Kindly share more informatio on how to invest in US markets from india. What is the min capital needed, what tools u r using?

Coming to valuations, how do you figure out entry valuation is good/not?

[Jitz]

Bro, which sector do you suggest for a beginner? My circle of interest is IT. but IT stocks are not that growing in the field.

[prateekv]

@Jitz Consumer sectors like FMCG, Jewelry, Airlines, etc are easiest to track for a beginner since you usually have a feel of what product looks like and compare it with other options in the market (Read Peter Lynch). Unfortunately, most of the stocks in these sectors tend to trade at high multiples. But still there are names where valuations are reasonable and may grow for >15% YOY for long periods of time.

With regards to IT, large cap IT names do barely grow 10% but trade at 30x TTM PE. Moreover, there is addition disruption risk due to AI adoption. Historically, IT has been a huge wealth creator because of asset light models, most of the profits are converted into FCF with very low reinvestments. Personally, I think smaller IT names are less vulnerable to disruption as it is easier for them to adapt to new changes. Try to find companies which are investing for the future through R&D. I am not looking at IT very closely at the moment due to changing dynamics in US as well as AI threat.

Moreover, it always helps to remain diversified across sectors in today’s fast moving world.

[prateekv]

@vasu2 As someone who doesn’t reside in India, I personally use Robinhood as my broker for its access to MorningStar research reports. Additionally, I utilize tikr.com to review financial statements, brokerage targets, and conference calls. For those interested in investing from India, I have heard decent reviews about platforms like INDMoney and Vested, although I have not personally used them. Another reputable platform available globally is Interactive Brokers , which offers reliability as it is a listed company.

With regard to valuations, for asset-light businesses, I typically rely on the Price-to-Earnings (P/E) ratio based on normalized earnings. I look for companies with a P/E of less than 25–30, particularly those that can sustain growth of 18–20% over the long term. To determine their growth potential, understanding management quality and business history is crucial. This includes analyzing how they have scaled their operations over the past 5–10 years and whether they have successfully raised capital to fund growth without compromising returns ratios. In cases with predictable cash flows, I may perform a reverse DCF to assess what growth expectations are built into the current price. I avoid using the PEG (PE/Growth) ratio because it often overlooks the longevity of growth and business model risks . While it might justify high valuations like 50–80 P/E for EPC companies, I play such names as momentum trading than value investing.

For asset-heavy or cyclical businesses, Price/Book (P/B) ratio can be more effective. However, it’s important to scrutinize the composition of the book value. This metric works well for financial institutions since their book value largely consists of cash.

Sometimes, undervaluation is apparent. For instance, Kama Holdings currently trades at an 82% discount relative to its holdings in SRF. Even if SRF’s valuation drops by 30%, Kama would still be deeply undervalued, given its distribution of all dividends from SRF and previous stock buybacks. Previously, Narayana Health (NH) was undervalued when trading at around 20x TTM EV/CFO, considering its sector-leading efficiency metrics, excellent management quality, and reinvestment strategy without diluting returns. Banks like Kotak and HDFC Bank trading at less than 20x P/E can be viewed as undervalued if they can sustain annual growth of around 15% for long periods. Typically, financial institutions are valued using Price/Book, but I believe exceptional banks/NBFCs can be justified using P/E, since their book value has never contracted significantly and these companies have navigated times of crisis much better than their peers in the industry. For companies like Laurus Labs , valuations are often forward-looking. When I initially purchased shares at around 400 Rs , it was trading at about 22x EV/EBIDTA based on expected FY25 earnings. Laurus has made significant investments in growth assets(check gross block since 2021), shifting its focus away from ARVs. Once these assets mature and the Return on Capital Employed (RoCE) improves to around 25% , projected profits should exceed 1,500 crores

Cheap valuations are highly dependent on market conditions. Six months ago, finding growth stories at reasonable valuations was challenging. Following the recent correction, I have started identifying names with more attractive valuations. I am now waiting for prices to stabilize and form a base before increasing my investments.

Disclaimer: I am not SEBI-registered. No recommendation to buy, sell, or hold these names. I am heavily biased. I may sell my shares at any point based on my stop loss

[prateekv]

These feel like uncertain times indeed. Events over the past few weeks have certainly given me pause, especially as I consider the potential global shifts driven by AI disruption and newly imposed tariffs, which seem higher than anticipated. My concern isn’t just about the direct impact on my investments, but more broadly about the potential effects on the economic well-being of the majority of the population – perhaps the bottom 75%. It reinforces my belief that we’ll need resilience and patience ahead, which has encouraged me to practice more kindness towards those around me.

Turning to my investment portfolio, the strategy over recent months has centered on reducing risk. This adjustment reflects concerns about potential disruptions, current market valuations, and instances where specific holdings had grown disproportionately large within the portfolio.

US Portfolio

I recently sold my position in Amazon. My US portfolio now consists of Inmode (INMD) at 4%, iShares Gold Trust Micro ETF (IAUM) at 50%, and iShares MSCI India ETF (INDA) making up the remaining 46%.

• Gold: This position represents about 8% of my overall net worth. Given the uncertainties surrounding the future value of the US dollar, I’m comfortable potentially increasing this allocation towards 10%.
• India Bias: I maintain a strong home-country bias towards India. While markets like China are experiencing a bull run, I question its sustainability. Similarly, I’m skeptical about Europe’s ability to rapidly shift its work culture and re-industrialize after decades following a different path. Although arguments exist about liquidity flowing into Europe and China potentially boosting their markets, I remain unconvinced in these less-than-normal times.

Indian Mutual Funds

I’ve been consistently allocating capital to my Mutual Fund (MF) portfolio. This involves adding fresh funds and systematically moving money out of my direct Indian stock holdings. This shift is primarily aimed at preserving peace of mind during this turbulent period.

My current MF holdings include:

• Parag Parikh Flexi Cap Fund
• Old Bridge Focused Equity Fund
• Helios Flexi Cap Fund
• Helios Financial Services Fund
• Nippon Active Momentum Fund

The Financials and Momentum funds constitute a relatively small portion of this portfolio.

• Financials: I’ve been adding to the financials fund over the last six months, attracted by what I perceive as reasonable valuations in large private sector banks.
• Momentum: I initiated a position in the momentum fund around March 10th, 2025, sensing a potential market bottom at that time. While the market might decline further in the coming months, I intend to maintain exposure to a momentum strategy to potentially benefit from the next bull run. This approach might also offer tax efficiency compared to frequent buying/selling in a direct equity portfolio, though active funds inherently involve turnover. I continue researching alternative active momentum funds, although options remain limited currently.

Indian Stocks

Here’s the current breakdown of my direct Indian stock holdings:

Stock Name	Weight (%)
All E Technologies	12.79
NH	12.38
Laurus Labs	5.95
HCG	5.91
Kotak Bank	4.72
Kama Holdings	4.71
Bluejet	3.21
SUNDROP	3.19
MAHSCOOTER	3.12
Infollion Research	2.59
MANAPPURAM	2.58
MCX	2.24
EFC (I)	2.10
Religare	1.98
PRAVEG	1.56
NCL Industries	1.39
Cash	3.59
NiftyBees	25.88

Major Recent Changes:

• Infollion Research: Trimmed significantly during its rally last month, selling most shares between ₹460-480. The potential disruption from AI-driven research tools (like Deep Research) felt like a tangible risk, and I was uncomfortable with a >10% allocation in a relatively illiquid stock facing such headwinds. I continue to monitor the company due to its strong balance sheet and management.
• HCG: Increased my position to roughly 6%. I added shares below the open offer price of ₹505, improving my average cost with a decent margin of safety provided by the offer.
• Sundrop Brands & Manappuram Finance: Initiated positions. Like HCG and Religare, these are bets partially based on anticipated positive changes stemming from management shifts or actions.
• Bluejet Healthcare: Initiated position. The stock had momentum but dipped following news of a tax demand. I view this as a one-off event unlikely to impact core operations and bought shares around ₹760.
• Praveg: Re-entered with a 2% position after the stock rallied about 25% from its recent low, believing it offers value at current levels.
• Macfos & Zaggle: Sold these positions, primarily for tax-loss harvesting purposes. While both companies appear fundamentally sound at current levels, I plan to wait for a technical buy signal before considering re-entry.

Way Ahead

For now, I’m holding off on actively buying more stocks and maintaining a “wait and watch” approach. A key reason for this pause is the lack of clarity surrounding the new tariffs – specifically, the current structure, which applies similar rates across diverse sectors, seems illogical and requires further understanding before making significant moves.

While waiting, I’m keeping a close eye on the IT and Pharma sectors. There’s been noticeable market nervousness in Pharma, fueled by speculation about potential higher tariffs on the sector. However, my view is that relocating production isn’t straightforward. Companies require policy certainty before committing major capital expenditure (capex) on US soil, and even then, bringing new capacity online realistically takes at least two to three years. Therefore, if these tariff concerns do pull Pharma stock prices down significantly, I see it as a potential opportunity to add to positions at more attractive levels.

Disclaimer: I am not SEBI-registered. No recommendation to buy, sell, or hold these names. I am heavily biased. I may sell my shares at any point based on my stop loss.