@sujay85…agree…
Also, their Indonesia Business is doing quite well. By the way, Indonesia has a population of 26 odd cr ( 4th most populous country in the world )…and hence a huge addressable mkt.
A detour- Marico is doing really well in Bangladesh ( 8 th most populous country in the world at 16 odd cr )
GCPLs… mkt shares in their product categories in Africa and Latam are also good. It should be a matter of time before their currencies stablize and GCPLs profits get a bump up.
Very true . These might give strong competition but I believe razor and oral B may remain their strong forte .
@ranvir, what’s your view on jyothy labs at current price as it has corrected significantly? Thanks
Hi…@A_shah…
The valuations are descent. Its just that growth is a little bit of a concern…specially in the Household insecticide and detergents category.
In my opinion, it deserves a tracking position …at max… and can be bought in more quantities if growth visibility comes back.
Regards,
Ranvir Dehal
Hi…
Just a disclosure…
Have managed some money, will be buying GCPL tomorrow.
Also, bought TVS Srichakra …last week.
Regards,
Ranvir Dehal
Frankly, I dont do any text book DCF calculations for the stocks I buy.
What I do it is as follows ( broadly ) -
Look for companies selling branded products with descent pricing power.
Check out the management integrity wrt past actions. Dividend payouts are an imp indicator. ( though not the only indicator )
Compare the present earnings multiple with local and global bond yeilds and then try to pay a price somewhere in between the two ( so as to be roughly correct…specially for FMCG companies )
WRT GCPL…
I expect a long term sales growth in the range of 6-8 pc with profit growth at 15-17 pc. ( due economies of scale )
Categories and products where I think growth can come from are-
Protekt and Mr Magic - Hand wash range.
B Blunt - Hair care range.
Aer- Air care range.
Cinthol- New male grooming range.
African descent women’s hair care range of products.
Godrej professional- New Hair care range.
Categories, where I expect growth to taper -
Traditional Soaps , Mosquito repellents and Cream / Powder hair colours.
Regards
Ranvir Dehal
Hi…
Just a disclosure…bought some more GCPL. Small qty.
My gut feel - their Household Insecticide business has been under some pressure for quite some time now. This qtr, ie Jun- Sep has seen some exceptional rains which should provide a natural cushion to the HI business. Also, the mild currency devaluation should improve the export realizations.
I have also made a small wish list / watch list of a few stocks that I would like to buy/track at current valuations or I would be very interested to see the company’s performance going forward. These are -
Wonderla Holidays
Hawkins Cookers
Akzo Nobel India
Jyothy Labratories
Page Industries
V guard Industries
However, I am not holding any shares in the above mentioned companies.
Regards,
Ranvir Dehal
Hi Ranvir,
I would be interested in knowing what’s ur logical & valuation thesis for wonderla.
I have small position (1.5% of PF) in wonderla but contemplating to sell or not.
The Hyderabad park is not as successful as Bangalore/kochi (TripAdvisor rank wise or revenue&profitability ramp up wise). The Chennai park would take 1 & half years atleast from now to complete construction. After that it would take atleast 3 yrs for the park to reach optimum profitability level. So, we need to wait for another 5 yrs for the profitability to grow by 1/3th (keeping aside annual 5% price hike in each of the old parks.)
Thanks in advance.
Hi…
I was completely obliviant of Wonderla as a stock idea.
It was introduced to the stock story by @A_shah.
He had shared this link with me -
http://stalwartvalue.com/what-makes-wonderla-holidays-an-amazing-business/
I am not advocating an aggressive buy in any of the stocks mentioned in my previous post.
What I meant was… that these stock stories are generating some curiosity in me.
Regards,
Ranvir
Disc: Bought a few stocks of Jyothy Labs on the eve of Diwali.
I was really impressed by their Q2 results. Specially the volume growth…it was stupendous.
I held JLL for about 4 yrs before selling it a few months back. I was really jittery about their Q2 outcome…specially on the back of larger FMCG slowdown.
Now, I intend to keep buying this stock whenever there is fund availability.
Regards,
Ranvir Dehal
Disc:
Did some mild trimming in Dabur Ltd and converted to Marico Ltd.
I think the valuation gap post Marico’s tepid q2 pushed me into doing so.
I expect Marico’s volume growth to return in q3 and q4 ( say a 4-5 volume growth ) . If that happens, its bottom line may just fly provided the low RM costs
Disc:
I had a large postn ( wrt my portfolio ) in HDFC ltd ( my avg buying price was 1720 ). Yesterday I liquidated it and converted it into Dabur India @454, HUL @ 2240 and TTK Prestige @ 6000.
Reason- I was reading their AR and Investor PPTs. Their avg cost of funds was 7.99 pc and avg lending rate was 10.2 pc or so, giving them a spread of 2.2 odd Percent.
Thought hard about it. With banks coming back into a descent shape, tight bond markets, low interest rates on CASA and Home Loans…felt uncomfortable with their avg cost of funds.
Hence the switch.
HDFC ltd was an excellent play on their listed and unlisted subsidiaries…that was hard to digest though.
Regards,
Ranvir Dehal
Posting my current portfolio breakdown -
Marico @ 185…8.9 %
Dabur@ 380…8.8 %
GCPL@ 460…10.1%
HUL@ 1920…23.5%
Nestle@ 9800…6.5%
Britannia@ 1450…4.2%
TTK prestige@ 5300…5.5%
VIP industries@ 470…4.2%
Century Plyboards@ 220…2.7%
HDFC Bank@ 710…10.5%
Indusind Bank@ 1630…7.7%
Maruti Suzuki@ 7200…5.7%
TVS srichakra@ 2950…2.3%
Small tracking positions ( less than 1 % ) -
HDFC ltd ( had converted all HDFC ltd to HUL, Dabur and TTK prestige )
Jyothy Labratories
Regards,
Ranvir Dehal
I think you have recently increased HUL exposure at a big percent. Any specific reasons for choosing hul. Or when compared to indian FMCG players?
Hi…
I already had descent exposures to GCPL, Dabur, Marico, HUL, Britannia and Nestle.
HUL’s domination / significant share of Indian Markets in the following segments is unprecedented-
Tea
Soaps
Shampoos
Detergents
Cosmetics
Coffee
Malted Drinks
Water Purifiers
Deodorants
Dental Care
Soups
Tomato Ketchup
Jams
Etc Etc Etc
This dominance in multiple categories is one of its kind …unprecedented in the world.
Its expensive.
But it may look descent one-one and a half years down the line.
1% plus dividend yeild is an added bonus.
Thats how u buy FMCG…I guess.
Regards,
Ranvir Dehal
Hello,
I see that you have a lot of weightage to FMCG.
Just wanted to know your thoughts on the amazon threat to these companies. I feel it’s the sort of disruption these companies have never faced in their lifetime. I see amazon entering a lot of categories and just going by the reviews and ratings, I would be really scared if I were an FMCG company in India right now. I also recall page ind management saying that online sales for them are growing much faster than offline.
Hi,
Thanks for the input.
It will require a detailed study for sure.
All I can say right now is that the Online share of Grocery in US today is sub 10 %. So, the offline share is about 90 %.
Out of that 10% online grocery market , if we were to broad - brush the Mkt Shares between mainstream established branded players vs new private labels…lets assume a 80:20 mkt share.
So that means, new online private label’s mkt share should be around 2% of the entire grocery Mkt…that too in the US ( in 2019 ).
While I agree that there are headwinds. But, I would say that probably they are not strong enough…as of now.
But yes, we need to dig deeper. For sure.
Regards,
Ranvir Dehal
What a sweet coincidence…an article in HTMINT today on the same subject.
Disc: bought some shares of HUL today. Intend to buy more, if it corrects further.
Post the merger, GSK has expressed that they would look to liquidate all their holding in HUL which will be around 6%. That, to my mind is exerting some downward pressure on the stock.
A correction based on technical reasons in an otherwise sound business is what I crave for. I hope, this is one. That’s why the buying impulse.
Regards,
Ranvir Dehal
Disc: bought more of HUL.
This recent correction in HUL from 2150 to 1930 levels is tempting me no end.
I know, I am being a little greedy. But when the stock is of the quality of HUL, why should I hold back…I wonder.
Also, post the merger with GSK ( after accounting for the equity dilution ), there is gonna be an EPS bump of about Rs 3 per share. Plus Horlicks and Boost under HUL have been doing really well.
I hope this aggressive betting on HUL ends up being a winning bet.
Regards,
Ranvir Dehal
