Ranvir's Portfolio

Disc:

Mild trimming in Crompton Greaves Consumer Electricals.

Added -

Acrysil ltd
Royal Orchid Hotels ltd

Both these stocks were down today. Thought that it was a good opportunity to add today.

Recent management commentary from both these companies has been really bullish.

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Disc : Trimmed CG Consumer products.

Bought tracking positions in Dodla Dairy and Akzo Nobel India.

I am hoping for a turnaround at Akzo Nobel India. Sunil Singhania’s Abakkus fund also bought into Akzo Nobel 2-3 days back after meeting the management.

Dodla Dairy - the financials look good. Margin pressures in Q1 should get resolved in Q2 as the company has taken some price hikes. Plus their African subsidiary is performing really well. Plus the share of value added products like Curd, Lassi, Sweets and Flavoured Milk is inching up with every passing year. Currently at 32 pc of overall revenues.

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What kind of turnaround are you expecting or in other words what kind of turnaround this company needs? Is it financial/balance sheet issue or distribution/marketing or something else which needs to be turned around?

Basically aggression in the marketplace. Over the last decade, their performance has rather been laid back wherein they have consistently conceded marketshare to Asian paints and Berger paints.

Recently they have turned aggressive at least on advertising. Dulux was one of the most advertised brand in the recently concluded Asia Cup ( T-20 tournament ).

Akzo Nobel India has all the ingredients in place to embark on a great growth journey - healthy balance sheet, profitability, good brand. The only thing they lack is the fire in the belly. Hopefully, they r making efforts to rectify the same.

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Disc : exited Saregama Ltd due rich valuations.

Added the following -

Dodla dairy : has nice business momentum specially after the price hikes that company has taken towards the end of Q1. Plus the share of value added products is continuously rising.

Akzo Nobel : A turnaround bet with falling crude prices as a nice tail wind.

HDFC bank : with system wide credit growth picking up to 15 pc, I hope the days of underperformance at HDFC bank should be near. Asset quality has been pristine as ever. Once they get their technology ecosystem right, it can do really well.

South Indian Bank : a pure turnaround bet. Management has guided for slippages of 1600 cr and recoveries of 1100 cr. If this materialises, the bank may be in for some re-rating.

Added to existing positions in - KVB , Mayur Uniquoters and Royal Orchid hotels

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Disc : trimmed Rushil Decor ltd due falling sea freight rates causing a threat of import of cheap MDF exports from China.

Added : AB Capital. Their NBFC business seems to be growing at a rapid pace with stable asset quality. Their life insurance business is also doing well. The health insurance vertical is well on track to profitability by FY 24. With the recent change in top leadership, this may well be a dark horse to bet on. Intend to monitor its Qtly performances and avg up if it sustains.

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Some of the recent buys have done well. The likes of KVB, Royal Orchid Hotels, AB Capital, South Indian bank, HDFC bank are all up in a descent way. Don’t intend to sell/trim any of these yet. I think the uptick in credit growth in India looks sustainable. Should be a nice trend to ride on for next 1-2 Yrs unless valuations become too frothy.

Key things to monitor ( in presence of descent credit growth ) -

Retail / Corporate advances mix. Should be a healthy balance.
CASA franchise and Deposits growth… because if this is not firing, credit growth will soon fizzle out for that individual Bank / NBFC.
Need to be mindful of weather its a genuine turn around or a rising tide lifts all boats phenomenon ( like in case of PSU banks. Have to be careful in KVB, South Indian Bank, AB Capital )

Some fresh tracking positions initiated in last 2-3 days ( each < 1 pc of portfolio ), these are -

Borosil Ltd ( I expect continued business momentum )
Emami Ltd ( due potential business turn around )
IndusInd Bank ( it may be due for a re-rating )
Mild additions in Monte Carlo fashions, Royal Orchid Hotels ( due seasonally strong Qtly results coming up in Q3 and Q4 )

Since most are small caps, will continue to tread cautiously.

Disc : I am biased. Please do ur own due diligence.

6 Likes

Hi,

This is year winter is exceptionally mild.
Let’s say in Gujarat, we are yet to start wearing sweaters etc, even in Mid December.

Monte Carlo may have a tough quarter and may find itself saddled with inventory.

Just an observation.

Regards

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Thanks for bringing this out. However, Monte Carlo’s winter sales are highly skewed towards North and East India. This because of their presence itself is concentrated in the states like - Punjab, Haryana, Delhi, HP, Uttarakhand, UP, Bihar etc. Winters in these states has set in nicely.

Their foray into the Western, Central and Southern markets is primarily led by their cotton portfolio.

However, ur point still remains as they would still be selling some winter wear in West/Central India.

I hope you have read analysis of Monte Carlo by Dr Vijay Malik. It has a measly 6% gtowth in sales long term and due to their expansion in cotton products their inventory levels have become high.

Otherwise, Monte Carlo as a brand is good brand.

Winter in North India has set earlier than last year.

2 cents from me.

Disc: Not invested

I have not read his analysis. Was he talking about the inventory levels post Q2 results ??

If yes, its due to the fact that the company does most of its sales in Q3 and hence does most of the channel filling in Oct. So… the inventories naturally rise towards the end of Q2.

You can correct me if he was referring to inventories at some other point in time.

He was not referring to any results but in general.

You can read article yourself. This article was last modified in March.

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This was a very informative and exhaustive read indeed.

However, weighing all the pros and cons brought out in the above mentioned article, I would say that I am still tempted to keep my tracking position in Monte Carlo Fashions.

IMHO… There are things that can go wrong and others that can go right. The current valuations are not demanding. Being a eternal optimist, I ll hold onto my positions unless the facts on ground change for the worse.

Thanks for sharing the article. That’s the beauty of Valuepickr community. Working together can have force multiplier effects and help avoid serious mistakes.

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Added a few stocks during the market rout on Friday. These are -

IDFC First Bank
Borosil Ltd
Emami Ltd
JB Chemicals and pharmaceuticals
Devyani International

Was waiting for sharp cuts in some large caps like Axis, ICICI Bank… which didn’t happen.

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Added a few more shares of Borosil ltd and JB Chemicals today as both did not bounce.

JB looks like a clean domestic branded generic story growing strongly and communicating like a good MNC.

Borosil as a brand as descent brand pull IMO. Should do well as consumption data in the economy picks up which should only be a matter of time.

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Disc : Mild trimming in CCL products. ( as it had grown to become 7 pc of my portfolio )

Initiated a tracking position in - Xpro India. Intend to add more if the business performance of dielectric films division ( used in making capacitors and find wide applications in EVs ) sustains / improves.

Just a Disc. Not a buy/sell recc.

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This could be bad news for Borosil Renewables. I had 2% of my PF in this and have seen 150% apprciation at its peak, my profits are back to 42% now. Thinking of coming out of this stock Boost For Solar Developers | Relief For Solar Cell Manufacturers On 25% Basic Custom Duty | ET Now - YouTube

Kindly share your thoughs!

Disc: Invested but thinking of coming out

Editing: Just noticed you mentioned Borosil Ltd and not Borosil Renewables, my bad :slight_smile:

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Disc: bought the following stocks today ( todays fall was too tempting to miss out on fresh buying ) -

Axis bank - due good results and cheap valuations vs its large cap public sector peers

Karur Vysya Bank - due exceptionally good results and very cheap valuations

V Guard and Crompton Greaves consumer - V guard has acquired Sunflame appliances and CG consumer has acquired Butterfly appliances recently. Both have had a descent fall. Both these acquisitions are the best uses of cash that these companies had. Therefore, I am generally bullish wrt both.

Just a disc. Not a buy/sell recc.

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