Sharing my updated pf since it went through some overhaul recently.
Exited - TCS, Titan, Alembic Pharma (all three are excellent quality companies, and it pains to sell them)
Entered - Mastek
Proceeds from sale of TCS primarily went to Mastek. Proceeds from Titan and Alembic were used to concentrate my existing bets.
Exited TCS because found a better priced opportunity in the form of Mastek. TCS is a solid compounder machine, expected to clock 10-15% CAGR, with healthy dividends. I find Mastek to be relatively undervalued, especially with the growth triggered by Evosys acquisition (should open up opportunities in US). They also have a fair chunk of cash on books, and could present optionalities for tuck-in acquisitions. UK market has been growing well for them, so offers a decent base as well.
Titan is an excellent franchise, but current valuation limits future appreciation to <15% CAGR. While the theory says not to sell companies just based on valuations, I think in case of well discovered large caps, it becomes difficult to make returns beyond earnings growth at such high valuations.
Alembic Pharma has been discussed enough on this forum. There is pressure in oral solids, sartans opportunity has tapered off. So next leg of growth needs to come from injectables and domestic brands. I find Laurus and Natco better placed to deal with these circumstances. Laurus, with their diversified non-ARV API plus CSM/Bio optionalities, as well as Natco with their FTF/Para IV strategy are ahead in the curve. I expect Alembic to consolidate till they start firing the injectables business, and will re-evaluate them.
I got a bit lucky with Neuland Labs in the recent carnage - my entry price was 2150-2200, but I managed to sell off a major chunk of it around 1900-2000 mark purely for tax loss harvesting. It was just dumb luck. My view on the company’s fundamentals hasn’t changed, so I entered back yesterday.
I would ideally like to have a minimum allocation of 4%, with 15-20 scrips to offer the benefit of reasonable diversification along with concentration. Praj has the least allocation currently, because I can’t mentally build a reverse DCF model for them. For all the other companies, I can visualise what might happen in 3-5 years, but Praj is a dark horse. Their India ethanol story is mostly priced in from a revenue point of view. But margin accretion could show some surprises. Similarly, their CBG business and BioPrism could throw up some surprises, but I don’t have conviction to put more into it yet.
Lastly, I would like to thank some of the forum members who have been spearheading the next wave of growth in VP - @sahil_vi , @Tar @Chins @Malkd @gurjota
| Scrip | Cost | LTP | % Returns | Allocation |
|---|---|---|---|---|
| RACL | 148 | 527 | 257% | 8.9% |
| Laurus Labs | 336 | 715 | 113% | 8.7% |
| Intellect Design | 322 | 672 | 109% | 7.6% |
| Pix Transmission | 336 | 794 | 136% | 7.4% |
| HDFC Bank | 1,168 | 1,495 | 28% | 7.2% |
| HDFC Life | 592 | 671 | 13% | 7.0% |
| Bajaj Fin | 2,961 | 6,229 | 110% | 6.2% |
| Syngene | 504 | 625 | 24% | 6.0% |
| Pi Ind | 1,921 | 3,112 | 62% | 5.9% |
| GNA Axles | 240 | 703 | 193% | 5.7% |
| Dr Lal | 1,842 | 3,791 | 106% | 4.7% |
| Dyn Pro | 387 | 577 | 49% | 4.6% |
| Neuland Labs | 1,489 | 1,684 | 13% | 4.5% |
| Mastek | 2,395 | 2,446 | 2% | 4.3% |
| Astec Life | 1,086 | 1,326 | 22% | 4.2% |
| Natco | 764 | 1,032 | 35% | 4.1% |
| Praj | 321 | 347 | 8% | 2.9% |