ValuePickr Forum

Seeking advice for Siva's portfolio

Hello fellow members and VP. I began my investment journey in 2016 when I took my first job and then by end of 2016, I started following valuePickr. Since then my view on equity has changed and improving day by day. Thanks for all your contributions, especially @hitesh2710 ji whom I used to follow for guidance.

Below is the current state of the portfolio, please provide your valuable suggestions. This PF is recently revamped as the ongoing correction has burnt my fingers badly especially my holdings in CANFIN, DCM SHRIRAM and KTKBANK got impacted a lot so I booked losses and entered into Bajaj, Maruthi, and Eicher.

My holding in Manappuram is in red as well but I want to wait and watch since it is fundamentally strong and believe it should be able to bounce back but not sure whether there will be a meaningful reward for parking a huge % of PF here. Please advice.

Ambika: This is for portfolio stability. I have been slowly accumulating this stock since the 600 levels. This is not a great company but definitely a good one with a credible management. Their ongoing expansion plans would produce a positive break out in the coming year

Manappuram: They have a strong network in South India. Hailing from Tamil Nadu, I could visibly see their presence and familiarity among the locals. I see this as a good business for at least the next 5 years as South Indians thirst for gold and land is continuing. The mortgaging land is tedious when the need is for short-term and small so people obviously going for gold loans. Recent corrections pulled my holdings to -ve territory.

Aurobindo: Managed by the founder. Unlike many other founders, he is willing to grow the company through both organic and inorganic way which shows his high aspirations. If things work out this could become a big story. Recovering pharma sector is another good news

Avanti Feeds: Another company that is being run by the founder with good leadership skills. People’s appetite for seafood is increasing so I believe the shrimp demand should pick up in domestic apart from the US. However carries a higher risk due to US regulations, Vietnam’s increasing competition, shrimp disease.

Bajaj Finance: Recently entered, I missed this stock 2 years back due to an early exit. Since then I have been watching it as I didn’t want to chase it due to higher PE. Used the recent correction to re-enter. Higher ROE and ROCE with a good management.

Eicher Motors: A past turnaround story under its new generation leadership. There is no doubt in the management’s execution skills and aspiration. The company is entering into its next phase, if the leadership’s plan to take it overseas and venturing into 600+ CC segment workout, another round of growth and compounding is possible. However, the current RE demand in India should provide the margin of safety for the next 3 years. So I initiated this position recently as there is a decent risk-reward. Based on the progress I will take a decision on this stock in the next 1 year

Yes Bank: Another watchlist for a long time. Recent slide game me an opportunity to enter. I feel Rana’s exit is overseen and the current valuation provides a decent risk-reward as the negatives are almost priced in.

Future Consumer: Backed by the strong network of the Future group which owns Big Bazar and Nilgris outlets. Bringing new items to the shelf is not a problem for this company. The FMCG war is heating up due to Amazon and Walmart’s interest over it as they see this as Retail 2.0 in India. Several acquisitions and merges are possible in the coming years and FConsumer has a great chance to get the strategic partnership to push growth.

Oriental Carbon & Chemicals Ltd: Dominant producer of insoluble sulfur which is used in tyres. The company has been expanding the production. Longtime holding in the portfolio.

Maruti Suzuki India Ltd: Recently entered after the meltdown. No need to explain the brand value in India. Its recent line up under NEXA is able to inspire a new set of consumers so the growth should continue

Aarti Industries Ltd: Recently started the tracking position to take advantage of China issues.

5 Likes

Have they made profit and can they make profit in the future? We know history of future group and their lack of focus. Please revisit the reason and see if they can make profit in the future. [quote=“sivaramtvl, post:1, topic:20205”]
Avanti Feeds : Another company that is being run by the founder with good leadership skills. People’s appetite for seafood is increasing so I believe the shrimp demand
[/quote]

One may want to see how much margins is possible for a commodity and what is the entry barrier and possibility to scale.

Sector Company Current Price Avg Buy Price Entry Price Entry Date Allocation Returns % PE ROE ROCE
Finance - Gold Manappuram Finance Ltd. 134.1 88 91 May-17 14.0 53 12.9 18 13
Chemical - Tyre Oriental Carbon & Chemicals Ltd. 1147.3 1013 459 June-16 9.6 13 16.1 15 18
Finance - Consumer Bajaj Finance Ltd. 3533 2053 2219 October-18 9.5 72 52.3 20 12
Manufacturing GMM Pfaudler Ltd. 1366.3 1117 1085 November-18 8.3 22 47.1 20 29
Manufacturing Acrysil Ltd. 97 112 125 January-19 8.3 -14 14.6 10 11
IT Tata Elxsi Ltd. 849.15 939 962 April-19 8.1 -10 18.7 37 56
Chemical Aarti Industries Ltd. 1727.7 1421 1270 November-18 7.7 22 32 22 16
FMCG Godrej Consumer Products Ltd. 658.1 681 708 June-19 7.7 -3 32.9 25 21
Finance - Auto Cholamandalam 280.85 246 237 February-19 7.0 14 19.1 20 11
Pharma Caplin Point Laboratories Ltd. 412 386 358 February-19 7.0 7 17.2 48 63
Auto Ancl GNA Axles Ltd. 269.4 294 281 May-19 4.9 -8 8.8 15 18
Infra - Basket stock PSP Projects Ltd. 519 458 447 March-19 4.1 13 20.7 31 43
Infra - Basket stock KNR Constructions Ltd. 287.05 250 243 March-19 3.6 15 15.1 26 24

Used the last 9 months months market turbulence to restructure my portfolio. Adding more whenever opportunity arises.

Manappuram - They have a strong network in South India. Hailing from Tamil Nadu, I could visibly see their presence and familiarity among the locals. I see this as a good business for at least the next 5 years as South Indians thirst for gold and land is continuing. The mortgaging land is tedious when the need is for short-term and small so people obviously going for gold loans.

Bajaj Finance : I missed this stock 2 years back due to an early exit. Since then I have been watching it as I didn’t want to chase it due to higher PE. Used the October correction to re-enter and sitting tight since then even though I am not comfortable with the valuation. Want to hold as long as the growth prevails.

Oriental Carbon & Chemicals Ltd : Dominant producer of insoluble sulfur which is used in tyres. The company has been expanding the production. Longtime holding in the portfolio. Recently increased the allocation.

GMM Pfauder : A proxy play to pharma with a dominant share in glass lined equipment. With good order book for next few years this seems to be a safe bet on Pharma.

Acrysil : A premium granite SINK and other kitchen utils manufacturer that has strong presence in exports now eying to capture the domestic market. Company is consistently growing and now expanding capacities. Has been a slow story but believe it would work well in 3 years if everything goes good.

Tata Elxi : Has a good track record and believe the distribution and modernization happening in auto industry would bring more orders to this IT company in long term.

Aarti Industries Ltd: With the roll over orders in hand for next 3 to 5 years, Business should perform well. Need to evaluate after that.

GCPL: Hold solid brands like “GoodKnight” and has been expanding into different markets and different consumer segments like car refreshers, detergents. If few of it work out, it will add to top line. Replaced Ambika with this as a long time compounder as I felt comfortable with the valuations.

Cholamandalam: Another company that I was tracking for so long, entered during the NBFC crisis. Good management (Murugappa group) with good track record.

Caplin Point: A non branded generic player with consistent growth record. Now expanding into multiple new countries and trying to increase sales aggressively. Betting on their growth story as the management has proven their capability in the last 5 years.

GNA Axles - A 500 Cr MCAP company with an annual sales of 1000cr. Has been growing steadily with a decent ROE even during the auto slowdown. Felt that it is undervalued.

PSP & KNR - Betting on India’s infra growth. A bit risky due to political interference in getting new contracts hence used the basket approach.

My portfolio is skewed with NBFC stocks (manappuram, chola, bajajFin). As I don’t want to sell any of them so reducing the exposure by not adding more allocation to them.

I am also watching ITC to start a position. I request fellow investors to share your valuable feedback.

4 Likes

Over the last 3 months, I made a bunch changes in the portfolio. Have added half dozen mid/small caps that are available at reasonable valuation and sold stocks that hit stop loss.

  • Exited Tata Elixi (sold at ~730) as it hit my stop loss.
  • Reduced Caplin point (sold part of my holdings at ~440) and added Biocon and Hikal. Instead of stock specific approach, moved to a basket approach in Pharma to reduce risk.
  • Entered ZeeLearn (4%) - PlaySchool business is doing well, available at reasonable price. There is a risk because of pledging as zee group is in trouble. So just 4% allocation.
  • Entered Mangalam Organics (4%) - Newly entered into B2C business with several camphor products. Available at reasonable valuation. Camphor price risk is there so having just 4% allocation for now,
  • Entered KMC Speciality (4%) - Capex cycle is complete so returns should improve in coming years. KMC is located in Coimbatore (TN). I have visited the hospital and they have decent reputation in the locality. At the current valuation downside is low.
  • Entered Mold-Tek Packaging (3%) - Niche business, Having several market leaders as client. Believe it has a long runway. Started doing monthly SIP, aim is to have 8% allocation by a year.
  • Entered Piramal (3%) - Bought at 1660 as it was at very attractive valuation, before adding few more it moved up. Just a momentum play, don’t want to add more as I already having lot of financial stocks.
  • Added GNA Axles, GCPL, Acrysil, and Chola

How was your returns till date. Also can you pls update your latest pf as it seems good

@shekar
At present, my portfolio is so diverse as I didn’t want to give high allocations for any of my new stock as most of these are small/mid caps and the recent bear market has created a fear in me to allocate high capital in any stock.

In the last 18 months of bear market, most of my portfolio stocks has survived compared to broader market as they have recovered from the all time low to some extent. One other reason is that I have grown my portfolio by 3x during this period so I bought most of the stock at decent valuation. I booked loss in Yesbank (45%), Tata Elxi (20+%), Eicher (5%) during this period.

Overall my returns (XIRR) is flat since my investment journey. I started investing around 2015 November as a dump investor, bought several good and junk stocks, sold good ones for 10% to 20% profit and booked heavy loss on junk ones. Only by 2018, after reading valuepickr, I started constructing some meaningful portfolio but sadly thats when bear market started so currently I have made nothing out of market as my XIRR is somewhere below 1.0. In contrast my mutual fund portfolio’s (that I started by 2014 mid) has given 12% XIRR till today. I have 25% allocation to MF and 75% allocation to stocks.

S.No Industry Company Current Price Average Buy Price Portfolio% Return %
1 NBFC - Gold Manappuram 127.75 87.89 10.69 45.36
2 NBFC - Consumer Bajaj Fin 3702.20 2053.00 8.03 80.33
3 Manuf Acrysil 107.40 112.30 7.46 -4.36
4 Manuf / Pharma GMM Pfaudler 1519.90 1117.07 7.45 36.06
5 FMCG GCPL 684.75 673.80 7.15 1.63
6 Auto - Tyre OCCL 1050.25 1013.43 7.07 3.63
7 NBFC - Auto Chola Fin 290.35 247.25 6.17 17.43
8 Chemical Aarti Ind 1623.80 1420.65 5.84 14.30
9 Pharma Caplin Point 422.15 394.59 4.45 6.99
10 Auto - Aux GNA Axles 260.20 287.81 4.23 -9.59
11 Pharma Biocon 228.05 225.38 3.92 1.19
12 Pharma Hikal 155.70 156.32 3.78 -0.40
13 Education Zee Learn 22.10 22.02 3.32 0.34
14 Infra PSP Projects 513.35 457.74 3.25 12.15
15 Manuf Mangalam Organics 354.15 292.54 3.13 21.06
16 HealthCare KMCH 11.60 10.83 3.06 7.10
17 FMCG ITC 238.05 247.54 2.93 -3.83
18 Infra KNR Cons 230.95 251.29 2.41 -8.09
19 IT - Pharma Take Solutions 114.15 97.47 2.16 17.11
20 Manuf / FMCG Mold-Tek 290.15 261.00 1.78 11.17
21 NBFC Piramal 1848.45 1663.80 1.72 11.10
3 Likes

i think you have a very good portfolio which would do very well over the next few years. You could increase allocation to Piramal and may be add L&T Fin holdings as well. Bajaj Fin could be held for a really long time. the new tax laws will make this company even better.

I know nothing about a few companies here but would certainly avoid Zee Learn.

I have no clue about stuff like XIRR and other management school stuff. If you could add from your regular income/salary on dips you should not have any problem.

@Shivkumar
Thanks for your feedback. Yes I am buying from my regular income but not following any strict SIP kind of pattern. I purchase stocks 2 to 4 days every month mostly when market slide. Currently I am left only with emergency funds (1 year projected expense) so I would like this bear phase to run for few more months so I can deploy more money.

1 Like