ValuePickr Forum

Sahil's Portfolio

Some updates on PF:

  1. After thinking about it a bit, I have decided not to pursue coffee can investing because as discussed earlier, it’s very difficult to “shut it and forget it”. A lot of these companies were also available at a very high valuation which also makes holding them psychologically challenging.
  2. In the core PF, I have added Neuland after some research which can be found on their thread. I also added a little bit of Suven Pharma because both of them seem very different types of companies although both are primarily being driven by CRAMs. Would be interesting to see how it plays out.
  3. Another company I added a little bit and that I intend to build a position over time is Amara Raja. The opportunity size for Battery makers in India is simply huge (specially with the switch towards EV). Amara is the better of the 2 battery makers because it is more efficient and profitable.
  4. Another company i added is Vaibhav Global: A vertically integrated retail ecommerce platform that is largely into discounted jewellery. They have some serious operating leverage going for them. Their market share in their target markets (US, UK discounted jewellery) is 3% (up from 1.5% few years ago) versus market leader’s market share of 93%. Average revenue per household is 3$ versus 60$ for QVC. Vaibhav global’s next leg of growth is being driven by their digital businesses (website, app, other platforms like Amazon). The valuation is a little outside my comfort zone, which is why I will look to build a position over time.
  5. I realize it is extremely difficult to hold a concentrated PF of stocks. This is especially difficult for beginners, and also difficult as the PF size increases. I also think it might be better to hold more stocks towards the beginning of a PF’s life cycle because that enables me to track the large set closely, and consolidate over time, as the distribution of my conviction changes. Number of stocks in Core PF is now 17 (including Vaibhav, amara, Neuland and Suven).
  6. I still want to keep a diversified investing style (specially given the inherent risks of investing in Microcap stocks). I have decided to diversify into dividend investing. This style has always seemed very attractive to me. A regular royalty + growth of capital is a deadly combo. Even if the dividend yield is only 5% today, as long as I believe the company can grow dividends at 10% PA, this is an attractive opportunity given that typically inflation has been 5-6% in India. As a part of this, I have bought heidelberg cement, ITC, National Aluminium Company, GAIL, Bajaj Auto, Powergrid.
  7. The lot size for Chemcrux is changing to 500 soon (yay!). I hold 2000 shares right now. I intend to at least half the position size to control for risk of owning an illiquid microcap. Chemcrux is now roughly 25% of my PF. This is an uncomfortably large position size.
  8. I am very interested in Shilpa Medicare and am reading about it a lot since last few days. The company has been investing into Biologics (both biosimilars and NBEs) since the last 4-5 years and consistently diversifying revenue away from oncology APIs while also forward integrating into formulations. This makes shilpa a difficult company to understand. While it is somewhat richly valued as per EV/Revenue, but if the biologics molecules fructify in the next 5-6 years, then Shilpa’s fundamentals will definitely see a quantum jump due to the market size of the molecules involved. At same time, I do not want my PF to be overly diversified into Pharma Stocks. I’m also actively considering which pharma stock to sell, if I do decide to own Shilpa.
  9. I think of PF construction as some form of gradient ascent. As we learn more about the stock market, PF churn is inevitable. However, after sufficient amount of time (acquiring knowledge), the churn should reduce down to 0. I consider most of my investing to have started around April/May. I fully expect some PF churn at least for another 6 months as I learn more and more about the specific companies and am able to find better opportunities than current PF stocks.
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Hi Sahil, I read through your posts in other threads and had a curious question. I see that one of your biggest mistakes has been yes Bank and also see that you have very high conviction in another bank IDFC bank. Not that these two have anything in common but generally I have seen among peers is that a person who have had a bad experience with any sector refrains from high conviction bets in that sector, like say I had a bad time in NBFC and do not look at them any more as a practice. Not that I am right in doing that but thats a general psyche as I realise the risks of that sector much more than my first experience.
In above context, is IDFC bank a significant portion of your portfolio? What percentage if you can share. Also, why did you chose a high conviction in Banks again. Is it because you understand Banks very well or your liking for that sector as a vision or some other reason would be good to know. Thanks

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Thanks for the question,

One reason I’m able to take some concentrated bets is that the equity PF is only 33%-40% of my net worth. Even a 10% Concentrated bet is only 3-4% of Net worth.
Currently, IDFCF is 10% of PF and ~3-4% of net worth.

My IDFCF position has been built over time, a lot of buying happened at prices of 18-20 rupees (some before covid crisis). As a result, my average buying price was at 20% discount to book value. I’ve been closely monitoring IDFC First and they are prudent bankers. All fundamental ratios which matter for a bank, are improving for IDFC First. From next quarter onwards, their loan book will start growing up. Due to large up-front costs, retail as a unit is still loss making, but i fully expect that to turn around over time, as the up-front costs get amortized, cost to income ratio comes down, and provisions normalize over the duration of next 1-2 years. Yes bank was in many ways the exact opposite of IDFCF. My understanding of investing was very limited when I was a yes bank shareholder. It has increased a lot since then.

My own understanding is, as a large rule of thumb, market underprice turn-arounds for a very long time, until there is fair amount of certainty about the turn around succeeding. This is because base rate for turnarounds is low. Most investors main concern with IDFC First is the stock underperformance. This should not be a reason for under-allocation, as long as the business is going in right direction. They’ve been fairly prudent in creating Covid provisions, have always been up-front about credit losses, even at the cost of large frequent quarterly losses and mostly following up on most of the guidances they gave for a 5-year period. I continue to monitor the Cost to income ratio and provisions. The investment thesis is clear. I will remain invested patiently for a period of 2 years, waiting for RoAs of 1% in retail banking. If that happens, I continue to stay invested. Otherwise, I’ll exit. Imo probability of staying is high (80%). Of course this is a subjective opinion, not a mathematically sound statement.

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Some PF updates.

Instrument Avg. cost LTP Net chg. % Allocation % of PF Type
IDFCFIRSTB 25.25 31.65 25.34 0.0992623176 0.1087794817 Core
CHEMCRUX 181.5 242 33.33 0.08394227441 0.09785200099 Core
APLLTD 943.02 978 3.71 0.07283522691 0.06604039634 Core
ASTEC 1050.11 1094.15 4.19 0.07187876597 0.06547762603 Core
GOLDBEES 44.27 45.6 3.02 0.06469946767 0.05826480138 Hedge
VAIBHAVGBL 1893.84 2013.35 6.31 0.05956022101 0.05535827348 Core
NEULANDLAB 1113.03 1218.6 9.48 0.05353580191 0.05124468857 Core
POLYMED 381.03 491.75 29.06 0.05321942973 0.06004898301 Core
KEI 304.5 331.2 8.77 0.05182498899 0.04928247291 Core
RACLGEAR 77.25 113.35 46.73 0.04987558576 0.06398251215 Core
NCC 29.1 34.75 19.4 0.04051012539 0.042293697 Core
LAURUSLABS 282.38 276.85 -1.96 0.03983252855 0.03414276684 Core
GAEL 90.35 113.45 25.57 0.0367718036 0.04036839823 Core
SIRCA 208.49 248.8 19.33 0.03162737703 0.03299731212 Core
RAIN 89.7 103.55 15.44 0.02833461067 0.02859730794 Cyclical
MASFIN 827.01 832 0.6 0.0267739781 0.02354917578 Core
ITC 170.69 173.95 1.91 0.01870942874 0.01666967467 Dividend
SANDUMA 672.69 720 7.03 0.01866681936 0.01746779522 Cyclical
NMDC 84.64 90.35 6.74 0.01565812475 0.01461310461 Dividend
HEIDELBERG 187.88 192.15 2.27 0.01564073506 0.01398515355 Dividend
POWERGRID 164.18 178.7 8.85 0.01518638304 0.01445136577 Dividend
NATIONALUM 32.75 32.6 -0.46 0.01514660874 0.01318171584 Dividend
RITES 256.64 242.5 -5.51 0.01305633049 0.0107859592 Dividend
BAJAJ-AUTO 2948.76 2979.2 1.03 0.01091022021 0.009637047317 Dividend
AGIIL 55.98 53 -5.33 0.006705586375 0.0055504728 Exploratory
TITANBIO 126.17 133 5.41 0.005835259924 0.005377816583 Exploratory
  1. As decided, Chemcrux allocation has gone down, since it was never a comfortable position to allocate this high a capital amount to 1 position.
  2. Deployed some extra capital into IDFCFirst
  3. Deployed Capital into Dividend plays.
  4. Deployed Capital into Polymed, Astec, Neuland, Vaibhav Global, Laurus Labs and reduced a bit of allocation into Alembic as I balance that position out with laurus.
  5. I’ve added the reason a stock exists in my PF. I will track gains only for (Core+Cyclical+Exploratory) PF stocks since dividend stocks were not added for capital appreciation (nor the hedge).
  6. Realized gains is 9.7% pre-tax (majority of gains includes chemcrux for rebalancing, caplin for exiting position, lincoln for exiting position).
  7. Unrealized gains are 16.8%.
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The best judgement of a portfolio is the business performance, imo. I will also attempt to track a summary of business performance at least twice a year, and hopefully all 4 quarters:

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Portfolio Update:

  1. I’ve increased positions in Neuland and astec.
  2. I am planning to exit my position in KEI industries next week. Nothing wrong with the company, I just found better use for my capital. Axtel Industries. Apples to Oranges comparison. However, here is everything which goes for Axtel and against KEI:
    Axtel has a distinguished business model (In India). No listed competitors. And the barrier to entry is the relationships They’ve built over last 30 years of relationships with all large FMCG giants. The downstream industry is semi-secular. Not cyclical (like KEI). It’s the technical know-how that they’ve established over 30 years of repeatedly serving these FMCG companies. These relationships are difficult to substitute. KEI is a commoditized player. This is also visible in the Net profit margins for Axtel and KEI. Axtel averages > 10% NPM whereas KEi is at ~5% NPM. Opportunity size is also much larger for Axtel. It is a tiny fish in a giant pond. KEI is in a fierce battle for market share with Finolex, Polycab and Havell’s. Last few years, Finolex is the only loser in market share (cc: @jamit05. source (page 2)). Axtel does 100cr sales in an industry where the largest guy does 6,600cr a year (source).

For these reasons, I will slowly switch out my position in KEI for position in Axtel. Why not keep both? I do not want to deploy more capital at this stage. KEI is the weakest stock I own in core PF.

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I plan to track my investment thesis in each PF stock in a simplified way in order to keep it as structured as possible and also track evolution of my thoughts over time. Adding it in the structured way for IDFC First bank. Will add others over time:

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Good writeup and thought process.

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Adding it in the structured way for Chemcrux. Will add others over time:


Disc: Invested. This is not investment advice. I am not a sebi registered advisor. This is a microcap and carries several risks with regard to ownership. Please consult your investment advisor & perform your own due diligence in case you feel the urge to invest in it.

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Adding it in the structured way for RACL Geartech. Will add others over time:

Disc: Invested. This is not investment advice. I am not a sebi registered advisor. This is a microcap and carries several risks with regard to ownership. Please consult your investment advisor & perform your own due diligence in case you feel the urge to invest in it.

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Thanks for the post and introduction to the company.
How does it stand against Shanti gears? Shanti being more diversified though P/E is bit high

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On a lighter note, Would it be ok if I called this the understatement of the year? :rofl:

Thanks, I have not studied Shanti gears before, following is based only from a screener comparison:

All in all, I would not be surprised if the Shanti gears bubble pops sometime in next 1 year. RACL (in my opinion) would get rerated once it reaches some scale (Ive covered above why I think it would reach some scale) and some institutions start covering it.

Shareholding for Shanti Gear:


Shareholding for RACL:

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Adding it in the structured way for Neuland Labs. Will add others over time:

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Adding a PF update after ~2 months:

Instrument Avg. cost LTP Net chg. % Allocation % of PF Type
IDFCFIRSTB 25.71 37.25 44.87 0.096 0.109 Core
ASTEC 1033.77 1267.75 22.63 0.087 0.084 Core
RACLGEAR 86.55 145.6 68.22 0.062 0.082 Core
CHEMCRUX 181.5 245 34.99 0.075 0.08 Core
NEULANDLAB 1110.08 1144.15 3.07 0.091 0.074 Core
VAIBHAVGBL 1938.48 2294.6 18.37 0.069 0.064 Core
NCC 29.1 59.7 105.13 0.036 0.059 Core
POLYMED 385.04 525 36.35 0.05 0.054 Core
LAURUSLABS 277.4 349.3 25.92 0.052 0.051 Core
AXTEL 228.21 225 -1.41 0.064 0.05 Core
APOLLOTRI 734.55 852.5 16.06 0.045 0.041 Core
SEQUENT 154.07 171.35 11.21 0.041 0.036 Core
MASFIN 834.6 939.95 12.62 0.034 0.03 Core
SANDUMA 676.59 1060 56.67 0.019 0.024 Core
ITC 178.04 212.3 19.25 0.033 0.031 Dividend
GOLDBEES 44.62 43.64 -2.19 0.037 0.028 Hedge
NATIONALUM 33.08 42.3 27.86 0.016 0.016 Dividend
NMDC 84.64 116.3 37.4 0.014 0.015 Dividend
HEIDELBERG 187.88 219.05 16.59 0.014 0.012 Dividend
POWERGRID 164.18 190.45 16 0.013 0.012 Dividend
RITES 256.64 268.5 4.62 0.011 0.009 Dividend
BAJAJ-AUTO 2948.76 3432.1 16.39 0.009 0.009 Dividend
AGIIL 56.01 60.9 8.73 0.009 0.008 Exploratory
TITANBIO 127.45 147.15 15.46 0.007 0.007 Exploratory
NEOGEN 733.95 745 1.51 0.003 0.002 Exploratory

Total realized+unrealized profits (only for Core PF): 40%
Note that my capital deployed has gone up 4x compared to 1 year ago, so a lot of it has been deployed in the 2nd half of the year. I will only measure the total returns on capital deployed not the CAGR because it is too cumbersome to maintain a log of each and every buy/sell/capital deployment. I do hope that zerodha provides a CAGR facility soon.

Some Updates on the diffs:

  1. I’ve sold Alembic Pharma and replaced it with Sequent scientific + additional buying in Laurus Labs. In general, as per my earlier post, I’m always on the lookout for replacing PF companies with better quality companies and this is a step in that direction. Sequent is play on animal pharma and has characteristics of FMCG in terms of industry structure, level of consolidation, pricing of the end products and certainty of earnings. Recent promoter change to Carlyl will help Sequent move to the next orbit of growth, helping them enter China, US and companion animals. All significant opportunities. EBITDA margins are improving by 1.5-2% every year.
  2. KEI has been replaced with Apollo tricoat. Tricoat has a much better value addition proposition (including exclusive use of DFT and ILG technologies to create superior products) and with their Rs 2,000 chaukhats replacing Rs 6,000 and worse wooden chaukhats, this company in the structural steel section is expecting to grow at 30-50% in the next 3-4 years at least. I estimate their market share to be < 1% and hence they have a long growth runway in front of them.
  3. I found RACL to be quite under-valued and hence added a bunch there.
  4. RACL and NCC have moved to higher % of PF due to large price appreciation.
  5. Added Axtel industries. They make machines for FMCG companies to make their products. They are able to deliver European standard quality at Indian price (aided by better manufacturing and labor costs). Backed by a technocrat promoter and several years of long lasting client relationships, I consider the probability for complete loss of capital to be low. They are a primary supplier to all large FMCG companies (inside and outside india), and have barely scratched the surface in terms of the market share.
  6. Sold GAEL. In general I’ve come to observe that I like owning companies with small but growing market shares backed by some competitive advantages. GAEL does not fit the pattern, already holding 40% market share.
  7. Sold Sirca paints. The company has a lot of potential but are already a large player in their primary market. The wall paints play is more of a hope rather than a certainty IMO. I have studied Indigo paints well and intend to add it when it IPOs, unless the price is ridiculously high.
  8. Sold Rain industries. Bought Sandur manganese. It’s a very well run company which was very under-priced, not very levered and a purer play on commodity cycle turn around than RAIN.
  9. Given the ridiculous prices at which ITC was, I have increased that position after studying it a bit more.
  10. New companies that I intend to study are Neogen and Navin Fluorine. At some point, it can become difficult to ascertain between a company that I expect compound earnings at 25% and one where the compounding might be 30%. For this reason, unless there is a compelling reason to switch, I would like to stick to current companies and also maintain only 15-16 non-commodity core PF companies at most.

Disc: This is not a buy or sell recommendation. I am not a sebi registered advisor. Please consult your own advisor before investing.

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@sahil_vi …good going… do you track deepak nitrite? If yes your reviews pls…

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You can use XIRR for calculating returns. You simply need to keep track of cashflows (transfers between your bank account and Zerodha account), and apply XIRR formulae in excel. Baically you are calculating return on money deployed in your trading account.

I personally feel this as practical and efficient way to calculate portfolio performance as you don’t have to track everyday buy/sell transactions. Let me know if you need any help there. Link below has the summary of my XIRR values, it don’t have the methodology though

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I did check out the link but could not find an XIRR in that post. Maybe I am missing something.

I think automation is certainly possible since we have a complete tradebook including account pay-ins. Only trades which touch a certain whitelist of stock should count towards the PF returns. Im just too lazy to automate all of this (another way to put this is that I think i have better use for my time). The other thing is, what we feel/go through in real life is not XIRR IMO it is the total returns.
The pro for XIRR is it gives a % number which we can then compared to benchmark indices etc. But in reality IMO what we experience is the total returns. the XIRR number would be even larger in my case since a lot of capital was deployed very late (<6 months ago), but i also feel that we might be conflating 2 things here:

  1. Judging the stock picking skills
  2. Tracking how much wealth we are creating.

For 1. I would prefer to track companies fundamentals growth (sales, EPS CAGR), valuation gaps.
For 2. I would prefer to track total returns since that is the number that I experience in my real life. If i put in X lakh rupees and take out Y lakhs rupees, the Y-X is the wealth I created which is what I probably care about the most.

I did try to track XIRR at some point but it was quite cumbersome, this is because i do keep buying more and more stocks in small quantities every week, sometimes multiple times a week. For someone that buys stocks once a quarter, XIRR is much easier IMO. Please do share your XIRR excel whenever you can. I will give it a second shot. The best thing would be a utility where i could upload a bunch of zerodha excel sheets to and which would spit out the XIRR number. :slight_smile: Maybe ill try pestering zerodha to do this for me.

Thanks for the kind words. I have read a bit about Deepak nitrite. A lot of their margin expansions come from cyclical shortage of commodity chemicals and hence the margins could deflate in the near time when the cycle turns. It is definitely a very growth minded management. I do have a bias towards small companies. A company with >20-30% market share IMO does not even have the optionality for the high growth minded investor to hold it for 10 years for consistent high compounding. Profitable (high ROCE) Companies with small but growing market share are the true wealth multipliers IMO (in the range of returns I am looking for). Deepak is already a 1B$+ market cap company. What kind of a growth runway does it have, I do not know. I’m always looking for the smallest most profitable (in the future, not the past) player. Deepak does not fit the bill there. Admittedly I have not studied it as closely as many other companies I track. I would like to study it more closely (and correct for any knowledge/perception gaps).

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Hi Sahil,
Do you follow companies overseas (US markets preferably)? I ask this, because I am assuming like me (who holds MSFT and AMZN stocks in good amount that dwarf my holding in Indian equity), you have Google stocks.
What’s your strategy in this? Do you follow Google ARs and ConCalls and size your PF? Or you prefer to keep accumulating it passively through bonuses and ESOPs?

I’m sorry if I asked something personal you don’t to share. I have been accumulating MSFT and AMZN shares through bonuses/ESOPs, and I never track it, simply because of the high faith and trust in Nadella and Bezos.

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I do not hold google stock for a lot of time. I keep selling from time to time. As of right now I’ve sold >90% of the stock I’ve been granted over last many years. My life is already quite dependent on Google (Job, salary, salary increments, future equity). I do not have any direct exposure to US stocks. IMO it is a kind of a fad to own foreign stocks. Right here in India, we have the largest wealth creation that can possibly take place. While it would make sense to own a few innovator companies like Lonza, Thermofisher but those are extremely overpriced.

IMO this is not a good strategy. This can lead to financial ruin. Any company, howsoever innovative can have blindspots. You are already “long” the company which employees you by continuing to be employed by it. Why compound the position by continuing to hold lot of stocks too? Besides, IMO all tech stocks are overvalued (by varying amounts). A correction is due in FANGMAN. The correction might coincide with any weakness in earnings IMO.

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Can’t agree more on this. That’s the reason I have stayed away from stocks abroad, apart from the ones where I didn’t have any choice.

One of the facts that I can correlate with this is that, most of the FANGMAN companies have surpassed trillion dollar valuation. Growth of runway from here onwards seems to be slow (going by crocodile in the pond analogy). Apple (and may be Netflix) can be exception as it hasn’t penetrated Indian market well. Do you see any other reasons?

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