Raghu Portfolio - 2017 - please share your views

Q&A: Questions & Answers
1

Overall Theme
Bottom up picking, Look for beaten sectors, Look for Turnaround Companies, Good Promoters
Prefer PE < 10 for adequate margin of safety
Horizon of 3-4 years, looking for 20 percent growth yoy
Folio constructed somewhere around start of 2017 (Nifty at 9200)

Ambika Cotton
Study Growth, Good Promoter, and Stability to portfolio

HDFC bank
Study compounder and consistent performer

Federal Bank
Private sector banker on fast growth over the last 2 years with consistent performance. FY 18 growth seems to be on track.

First Source Solutions
Value buy, Study turn around, Study growth over last 3-4 years,dept free by FY 19 which will double EPS, Might get re rated

Sonata
Value buy, Study turn around, Study growth over last 3-4 years, good dividend, IP focused delivery,Might get re rated.

Torrent /Alembic Pharma
Good number of ANDA filings, hopefully able to maintain margins and growth (Need to reevaluate as the pharma sector is undergoing headwinds)

OCCL
Among the market leader (top3) in world, Capacity expansion will boost its sales and profits. Good management

Manapuram Finance
Value buy, Growing rapidly non gold folio, good management, possible re-rating

DHP India
Could be multibagger microcap, consistent financial numbers, growing at good pace

Suzlon Energy
Turn around candidate, debt reduction, Sangvi on board, Lessons learned from past, Bullish on future for renewables (though am skeptical on huge equity base and wind energy vs solar for pricing)

2

If you are targeting 20% CAGR I would be more comfortable to have likes of HDFC Bank, Gruh, Bajaj Finance, Page Inds, Eicher Motors, Britannia, ITC etc. In my view a PEx < 10 cant be considered as margin of safety.

3

You can consider replacing vikas ecotech (D/E=1.4) with Dai-Ichi karkaria (D/E=0) due to balance sheet comfort. Also Dai-Ichi is also expanding at Dahej and revenue may double in next 3-5 yr. Real estate asset of app. 40 Cr (rental of 1.2Cr) & 50% stake in Nalco champion that earns 12 Cr net profit adds further strength. Mkt cap is 316 Cr. CMD S.F.Vakil alone is holding 50.6% stake.

1 Like
4

Hi sambandham82, thanks. let me study through

5

Hi Raghu I feel entry in Pharma sector need wait 2-3 more years. Meanwhile investor should invest in chemical or other growing theme…I feel for Pharma next two year is a consolidation phase…

6

Hi Tanveer, As already pharma sector has fallen from 25-30 P/E to 15-20 P/E, dont u you think its right time to buy or even accumulate further as EPS is still expected to grow @ 10-15% for the next 2-3 yrs.

7

Hi Sambandham…I agree on the current fall if you are planning to investing i will suggest then buy on dips when the market correct.
or buy gradually not in one lumsum…If u miss any theme there is a no big loss but if ur capital stuck for a few years then it could be big loss…