ValuePickr Forum

Sahil's Portfolio

Quarterly results…why do you need to track it faster than once a quarter ?

Hi Sahil,

Since you are talking about the arbitrage, I have a question about Tata motors DVR. It is trading at 60% discount, given that Tata motors’ management is talking about being debt free by 2025. Doesn’t it mean a long term arbitrage opportunity in DVR stock once company starts paying dividend?

I don’t have a lot of experience in investing and so far, I have been only able to better understand the management from past or current concalls. This way has till now helped me filter out few companies which looked really spotless on paper but management commentary didn’t match my tastes. For eg) kaveri seeds , motherson sumi.

I think investing is essentially like poker, or any other partial information decision making problem. One can decide not to play if certain set of information (concalls) is absent. That would be a reasonable investing style. Or one could decide to do the thing: for every set of information
available: one can invest a certain amount (K%) of Pf. K can grow alongside one’s conviction. Conviction have multiple sources. Industry structure, VP threads and so forth.

I have studied both kaveri and mother-son sumi, and decided not to invest. Based on, among other information, their VP threads. Not based on their concalls. In this case, concalls were not the only info available which could help one exclude mother-son and kaveri.

Concalls are definitely a rich source of information. I would love to talk to axtel management and understand them better. But would I decide to invest 0% if concalls are unavailable? No, because that would exclude a large universe of good investments. Idfc first bank doesn’t do concalls.

Until few weeks ago, I had 3 microcaps chemcrux, axtel and racl. None of them did concalls. I decided to exit chemcrux due to me underestimating the risks involved, and racl started doing concalls. So, the future is dynemic (pun intended) and things do change. The key is not to overallocate, as if it is a horse race we’re betting on. Allocation should be proportional to conviction. At 5% allocation axtel is neither a large nor a small investment for me.

Hope this helps

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How the dividend from Embassy REIT will largely be tax free. Can you explain or share available article for my clarity.

Please go through this thread before you invest money in REITs:

VP actually has all the info, we just need to look. :smiley: last few posts in this thread has questions/answers on taxation.

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Sorry i have not studied this.

This was very informative but I couldn’t understand that how does the REIT decide how to proportion proceeds from the SPV’s to these three buckets. If I receive a dividend of suppose Rs. 10, do REIT’s communicate about the compostion of the amount, eg) 5 rs. was dividend income and rest was other incomes ?

Based on, among other information, their VP threads. Not based on their concalls. In this case, concalls were not the only info available which could help one exclude mother-son and kaveri.

Any pointers as to why. I had gone thoroughly through all relevant technical ratios to balance sheet, income statement ,AR, growth opportunities and Moat possibilities, maybe I can further expand my horizon of scope in that way.

Yes they do. You can read the embassy reit latest concall and investor presentation it has all the details. They are also working to further simplify the holding structure to ensure 100% distribution can be tax free eventually.

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Kaveri was not paying they taxes. That huge contingent liability will always be an overhang on the valuations.
Mother-son sumi missed their 5 yr target by a lot. Btw mother-son I do want to study in more detail. Somewhere I do have a smallcap bias. But if they can deliver and grow topline from 7B$ to 36B$ or even 28B$ in next 5 years that would be a great wealth creation event. I will study mother-son as well but tbh management not walking the talk predisposes me negatively.

Guess our views were similar on motherson.

Will research the tax related analysis of the companies. Thanks.

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Only applicable for kaveri. Mother-son is good from corporate governance pov I think. :sweat_smile:

Hi Sahil

Are you still tracking Neogen Chemicals Ltd ?

Since ipo listing its a silent performer in speciality chemical space .

Your views

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Great company, at high valuations. Not sure if it will create wealth going forward.

Bromine space is not as remunerative as the fluorine space. Navin fluorine might be a better investment purely from business standpoint.

Yes valuations are very high .
Kept in watchlist.

Yes, I hold Navin Fluorine .

can you explain a few thing to me about embassy riet

1)P/e ratio is around 35 but divdend yield is around 7%
2)Are buildings being valued at book value?reason for this is current book value is 290 with 90% occupancy ,a dividend of18 rs with dividend payout being 90% it should give a eps of 20 rs which when divided by real estate value excluding vacancy gives a rental income being close to 9 to 10% higher if we reduce the book value of hotels(as not fully occupied) .This figure seems to high to me considering that usually real estate are bound to give 4 to 5 % rental yields and wealth in real estate is created by capital appreciation because indians like to invest in gold and real estates.

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Hi Sahil,

Do you track CAMS? Would like to know your views.

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Also would like to discuss which is better play between CAMS and CDSL, assuming lots of IPO’s (especially LIC) are coming in 2021 and thus huge Demat account might get open.

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Embassy REIT did their first step in simplifying the holding structure. Details here
https://www1.nseindia.com/corporate/EMBASSY_05032021210511_EmbassyREITSEAnnouncement5March2021.pdf

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Application of Bromine is not that wide compared to flourine…hence growth can be slow in neogen

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