Hello everyone,
I started my equity investing journey in July 2023 with the goal of generating a long-term return of 20% or more. While I have previously invested in equity through ELSS mutual funds primarily for tax savings, I believed that, as an individual, I could have more flexibility in investing and potentially generate higher returns compared to mutual funds. Recently, my churn rate has been high, possibly as a result of a steep learning curve.
My filtering process is based on the following model:
- Margin Expansion due to company expanding into value added product
- Operating leverage playing out
- Develeraging thus lightening of balance sheet
- Product mix change i.e. increase in higher margin business
Exit Framework that I am currently following:
- Volatility based indicator showing exit
- Key Thesis Breaks
- Better opportunity available
Current Portfolio
| Instrument |
Allocation |
| ARMANFIN |
10.31% |
| EQUITASBNK |
2.24% |
| GOODLUCK |
6.64% |
| ICIL |
3.82% |
| JSL |
3.09% |
| GMMPFAUDLR |
2.47% |
| MARATHON |
2.18% |
| NIFTYBEES |
37.82% |
| NUVAMA |
5.58% |
| PRICOLLTD |
4.10% |
| SENCO |
9.09% |
| SKIPPER |
4.37% |
| PENIND |
2.11% |
| SOUTHBANK |
6.19% |
Currently, the highest allocation is to NiftyBees. The goal now is to find more businesses that fit into my framework, thereby reducing my allocation to NiftyBees. If I am unable to identify any opportunities with a good MoS, I tend to transfer my funds into a Liquid Fund. This helps me to maintain sufficient cash when the opportunity arises.
This thread serves a double purpose: seeking feedback for process improvement, and documenting my decisions as an investment journal, both enhancing self-awareness and refining decision-making processes.
Disclaimer: The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
3 Likes
Update to portfolio:
Added Jindal Stainless. They have raised their stake in IberJindal to 100%. Anticipate strong demand in the future as the European market recovers. Although their freight costs have risen amid the crisis, management mentioned considering a price hike if the issue persists. As a result, the management has adjusted their EBITDA/tonne guidance to 19-20k/tonne.
Short thesis on Jindal Stainless:
In the metal industry, businesses can be classified as either Converter or Commodity.
Converter → Companies purchase raw materials, and then add value through a conversion process.
Commodity → Involves the production and sale of basic, standardized products.
Upstream/Commodity companies are typically more volatile, leading to lower multiples compared to converter businesses.
Currently, Jindal Stainless is being valued as an Upstream business, but in my opinion, it operates more like a converter business. I believe there is a potential rerating opportunity.
| Instrument |
Allocation |
| NIFTYBEES |
33.55% |
| ARMANFIN |
9.23% |
| SENCO |
8.31% |
| SOUTHBANK |
6.03% |
| GOODLUCK |
5.76% |
| NUVAMA |
4.82% |
| JSL |
4.39% |
| SKIPPER |
3.85% |
| PRICOLLTD |
3.60% |
| ICIL |
3.33% |
| GMMPFAUDLR |
2.22% |
| EQUITASBNK |
1.96% |
| PENIND |
1.95% |
| MARATHON |
1.92% |
Disclaimer: The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
2 Likes
Update to portfolio:
Added Strip Steel Wheels. EBITDA per wheel has increased QoQ, and further increases are possible with a rise in the alloy wheel mix and exports. The current EBITDA per wheel is approximately 254, which aligns with their guidance of 250-260. The company plans to increase its alloy wheel capacity to 4.8 million by Q3FY25. Additionally, the company has transitioned to a new tax regime, bringing the effective tax rate to around 25%.
| Instrument |
Allocation |
| NIFTYBEES |
33.57% |
| ARMANFIN |
8.94% |
| SENCO |
8.21% |
| SOUTHBANK |
6.75% |
| GOODLUCK |
5.60% |
| NUVAMA |
4.86% |
| JSL |
4.54% |
| SSWL |
3.72% |
| SKIPPER |
3.69% |
| PRICOLLTD |
3.57% |
| ICIL |
3.38% |
| GMMPFAUDLR |
2.22% |
| EQUITASBNK |
1.92% |
| PENIND |
1.96% |
| MARATHON |
1.82% |
Disclaimer: The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
Update to portfolio:
After the Q3 results, there has been some level of churning in the portfolio. The churn has mostly been attributed to both better opportunities and a better understanding of the business.
Exit: SSWL, Skipper, and GMM Pfaudler.
Skipper faces order constraints due to capacity limitations; awaiting Q4 capex plans and guidance. Will reconsider Skipper if favorable. Exited GMM Pfaudler and SSWL for better opportunities.
Entry: MCX, Zen Tech, Man Inds, Sandhar, and GPIL.
Added: Equitas, JSL, Pennar
| Instrument |
Allocation |
| NIFTYBEES |
28.92% |
| ARMANFIN |
7.61% |
| SENCO |
7.02% |
| Cash |
6.05% |
| SOUTHBANK |
5.45% |
| NUVAMA |
5.25% |
| EQUITASBNK |
4.83% |
| GOODLUCK |
4.72% |
| ZENTEC |
4.50% |
| JSL |
4.42% |
| MANINDS |
3.56% |
| MCX |
3.36% |
| PRICOLLTD |
3.36% |
| PENIND |
3.04% |
| ICIL |
2.83% |
| SANDHAR |
1.86% |
| GPIL |
1.68% |
| MARATHON |
1.56% |
Disclaimer: The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
Can we know your thesis behind your positions in Zen Technologies and Sandhar Technology
I have few questions.
Do you have access to some research service?
How do you get the ideas?
Hello @royatirek, thank you for your question. I currently do not have access to any research service. For idea generation, I utilize multiple sources, including MarketSmith, Screener, networking with other investors, valuepikr, and TV interviews. Once an idea is filtered, it is then added to my watchlist.
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Regarding Sandhar, several key points stand out for me. These include the following strategic initiatives:
- Margin Improvement: In FY25, the company aims for a double-digit margin, setting its target at 12-13% in the medium term. This will be driven by enhanced utilization and consolidation of plants.
- Operating Leverage: For FY25, Sandhar has no major capex plans apart from basic maintenance. Expansion plans are contingent upon new orders from customers.
- Balance Sheet Optimization: Sandhar targets to clear Rs 100 crores by the end of FY25.
Disclaimer : The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
Update to portfolio:
Current volatility in the broad market, gave some opportunity to add to my current position as well as invest into some good ideas.
Exit: South Indian Bank
Entry: EIH and Prestige
Added: Bought more of everything except Arman Financials, Marathon, Pricol, ZenTec, MCX and NiftyBees.
Since my portfolio is still pretty new, I figured I’d give you a breakdown of how each investment is contributing to my overall returns instead of getting into the nitty-gritty XIRR details. Also, I’ve been a bit strapped for time lately, so I haven’t had a chance to write up detailed stock theses. I’ll try to carve out some time for that soon.
| Instrument |
Allocation |
Contribution to PF |
| NIFTYBEES |
26.95% |
91.97% |
| SENCO |
7.28% |
6.62% |
| NUVAMA |
6.47% |
27.02% |
| ARMANFIN |
6.06% |
-47.90% |
| EQUITASBNK |
5.80% |
-10.97% |
| JSL |
5.61% |
29.43% |
| PENIND |
5.02% |
-17.34% |
| ZENTEC |
4.54% |
4.93% |
| ICIL |
4.59% |
7.90% |
| MANINDS |
4.53% |
-1.95% |
| GOODLUCK |
3.98% |
16.34% |
| GPIL |
3.43% |
-5.62% |
| SANDHAR |
2.60% |
2.48% |
| PRESTIGE |
2.92% |
-8.07% |
| MCX |
2.76% |
-5.04% |
| PRICOLLTD |
2.69% |
6.17% |
| Cash |
2.32% |
0.00% |
| MARATHON |
1.74% |
2.33% |
| EIHOTEL |
0.71% |
1.70% |
Disclaimer : The content provided here is not investment advice. It reflects solely my personal opinions, and I could very well be wrong about any of them. Before making any investment decisions, it is advisable to consult with your financial advisors.
1 Like
