My team is full of Rahul Dravids and Pujaras. I do need a couple of Yuvraj Singhs and Sehwags to really up the ante.
I did own Bajaj Finance from 300 to 2400 levels…then sold it …in oct last year when NBFC crisis started brewing. That was an obvious mistake. I m on the look out for such a stock.
Now that u have also pointed it out, I ll definitely look harder.
I do like insurance companies. First choice there is always HDFC life. But its valuations are a turn off. What is ur opinion on ICICI Lombard and Prudential???
Last year’s Chanda Kochar fiasco kept me away from ICICI brand name. Are there any other good listed insurance companies ???
I did have Hero and Bajaj auto in my portfolio. I had sold them about 3 months back
( hero…at a loss, Bajaj largely flat ) .
Bascically growth issues, specially in Hero. Plus my entry point in Hero was a little higher. Valuation currently are far better. Beyond that, I am in no position to comment.
I held ICICI Lombard from IPO but sold sometime back. Somehow I am more cautious for General insurance companies unless its from the best Management which is HDFC. Regarding ICICI Pru, I hold some. Honestly, we can say absolutely nothing about any management quality and runway in finance. In hope that HDFC remains the quality of what it is today for next 10-20 years then HDFC Life is a great stock to be even at current valuations. For ICICI Pru, I would trade it as a long term trade keeping small quantity as a core portfolio. SBI Life and Max Fin also have their own unique strengths but after my recent big loss with max India, I am wary of Max promoters long term strategy and its benefits for minority shareholders (although I hold some Max Fin also)
As you can see, I have followed a blanket approach for Insurance so far with major holding in HDFC. Probably its because I do not know which one will go bust and when, as is the case with any Finance company
I am looking to add HDFC Ltd on falls. Feel the company stands to gain market share due to the current NBFC crisis. Some day HDFC ERGO might be listed and create value.
I have been holding JLL for a long time. Its performance has been steady. As of now, there is no visible stress in its performance.
There is one observation that was bothering me for quite some time…whenever I go to the nearest Big Bazar/ Reliance store, I see a lot of private labels. Thats okay…but they arm twist smaller brands.
This arm twisting is quite visible wrt JLLs portfolio where the big organised retailers just dont keep Henko, Mr White, Ujala, Margo on the shelves ( even if they keep, the shelf space is miniscule ).
The only JLL brands they were keeping were Pril and Exo…that too with reduced shelf space. It made me anxious.
Hence the sell.
I have not seen such arm twisting in case of HUL, Dabur,GCPL,Marico,Nestle,Britannia…for obvious reasons.
Understood.
I am from Kolkata and had similar experiences in Bigbazaar or Spencer’s. But nowadays I rarely visit stores for purchasing branded goods and place orders via Amazon, Bigbasket, Grofers, Spencer’s Online or Sastasundar App.
One interesting thing I noticed is that the availability of Jyothy products via these e-commerce portals is significantly rising. Even 2 years ago, IIRC I used to see Margo out of stock, Neem Toothpaste or Maxo unlisted etc. But nowadays I can find all (or most) Jyothy products listed on these platforms. And in fact I purchase Margo (family favorite), Neem Toothpaste (childhood favorite), exo dishwasher (dissolves less), maxo (cheaper) regularly via these platforms nowadays. For confirmation I’ve just checked & found that these are in stock.
If you read the last Annual Report of JLL (management discussions section) you will see that they were repeatedly pointing towards the potential of e-commerce platforms as growth drivers (at least 4 times). So, it seems to me now that for Urban locations at least they are using e-commerce as the main distribution vehicle.
I believe that a company has to pay these large retailers some incentive for arm-twisting in their favor, which JLL is consciously avoiding for cost cutting IMHO.
Thanks for bringing it out. I ve observed the grocery buying patterns of some of my cousins from Delhi…they r also pretty similar…buying online that is.
Now that you have brought this out, it also reminds me of one of my friends who is working at a Senior position with Nivea…he also told me that online retail is actually a big negative for the private labels and shifts the advantage back in favour of the traditional FMCG players.
So, thats a point well taken.
I think, I missed out on thinking hard about these particular issues before pressing the sell button…A lesson for me.
Anyways, JLL is trading at reasonable valuations. I will keep it on my watch list and will closely monitor its results.
What are your thoughts on emami, specially after recent sell off. Promoter pledge issue is there and slowdown in growth. Growth is a common concern. Promoter showed intention to resolve pledge issue by selling stake. What are ur thoughts on its promoter and management quality and if it is coming in long term buy zone?
Need not be true. For example, Amazon has a private label and that sells very well. Someone who buys Tata mung dal may move to Amazon vedaka brand as the quality and price may be right. Online too has private labels
@Investor_No_1…I ve not been tracking Emami for some time now.
What I do remember of Emami ( I held it from 2014 to 2018 )…is as follows-
They have 4-5 primary brands - Boroplus, Fair and Handsome, Navratna, Zandu Basket, Kesh King and 7 in 1 hair oil ( emerging brand with a low base )
In my opinion ( its only an opinion )…their 2 biggest brands - Boroplus and Fair and Handsome are facing structural Headwinds…due stiff competition, lost opportunities and poor brand perception.
Others are doing decent business.
Therefore I am not too convinced about the story.
Valuations …however have now come off their peaks.
Just an update. Had access to some spare funds. Deployed them today. Bought the following-
Maruti Suzuki - I think the slowdown is cyclical. In my opinion, it should recover in 6-9 months down the line. As such, the lower base effect would kick in by then. In my opinion, Indian 4 wheeler sales revenues have a long runway ahead. ( we are 1/25th of 4 wheeler annual Chinese revenues today . Yes…thats true !!! By sales…we are 1/6th )Factoring in EVs and other disruptions …we cant be stalling so soon. Surely.
Dabur, Marico - I think both have had a descent time correction. As such, I like both businesses…specially Marico.
HUL- parked excess funds. I am in no hurry to make money. Maybe I can justify the valuations 2 yrs down the line. He He.
Hope …HUL keeps doing GSK type acquisitions. Really liked the EPS accretive, brand extending nature of the deal.
All 4 were already a part of core portfolio. So, no new in depth studies/ analysis was reqd…which is an arrangement I like.
There are some near term head winds ( like illegal Agarbattis hurting household insecticide business, currency devaluation in most African and Latin American countries ) but long term story looks good…as always with GCPL.
So, there may be delayed gratification. But thats okay.
I didn’t buy it as I already have it as a good chunk of my portfolio.
@ranvir Whats your view on Britannia? Growth seems to have slowed down temporarily but seems to have a long runway and market leadership in certain segments apart from distribution augmentation. And gillette too has almost a monopoly.
I also have Britannia in my portfolio, as one of my core holdings.
U r right…abt the long runway and distribution strength. One factor, which most FMCG analysts ( including me ) often overlook is the effect of new product introductions, innovations and premiumization that good FMCG companies are able to achieve…and Britannia is quite strong here.
Just an example…I have been taking feedbacks from local vendors about the crosiants…they have introduced. They are selling like hot cakes. Over a 5-10 yr periods, these kind of new products become company’s mainstays.
Another ex- 10 yrs back, there was no Britannia Nutrichoice, Jim Jam etc today they one of the best sellers.
Valuatons…at aprox 55 times trailing earnings are on the higher side…obviously.
I dont know much about Gillette India. Therefore, cant comment.
Another imp parameter wrt GCPL…their innovation DNA.
New products launched in last 5 yrs like- protekt, aer, Mr Magic, B Blunt etc account for 20 pc of their Indian revenues today ( source- latest AR )…thats some feat and is a long term structural positive for an FMCG company.
Completely agree on their innovation quotient and making new products successful is commendable. What do you think about their significant exposure outside India…i think almost 50 % revenues … being an old Indian FMCG house, why such huge outside exposure… is it good or bad for long term and what’s their strategy on this goin ahead? Thanks
In the current AR, Mr. Gambhir clearly stated their overseas strategy. They want to become the market leader in the hair care for women of African descent. They are already one of the largest player. Also in all the category they operate they want to become one of the top players. They have huge competency in HI segment. The African or South Asian countries suffer from insect born diseases and thus the HI category has huge scale up potential in these geographics.
Not sure how long they will remain so. GCPL has exposure to this segment for long time but they were not a very strong player, but nowadays GCPL (Godrej Cinthol) and Marico (Set Wet studio X) range is gearing up for giving huge competition in male grooming, shaving cream, after shave, beard gel etc. category. Although they will not be in the Razor category.
