Pvr - holding it since 2009-2010 , it was almost 60% of my portfolio till few months back . Have booked partial profits during the recent runup .
Unichem - Solid pharma pick , all the positives are already discussed on this forum
Granules - i have to admit i bought in this in a bout of buying panic during the last run up to 240 , but now regret buying it . Though business prospects look exciting some how little suspicious of the promoters and will likely exit on a rally if it gets closer to my average price of 160.
Zicom - Both undervaluation and good business prospects . there is lot of scope for growth in current domestic environment plus thier overseas ventures also doing very well .
Auto ancillary basket - Except for a odd amara raja , most of the stocks in the sector have been beaten down . Looking at individual companies , i feel most of them are well managed businesses with long history and good dividend payouts . if and when auto sector turnsaround all of them should do well .i might add few more like hitech gears , zf steering or buy more of the existing on any significant dips .
Cash - Mostly from profits from pvr . Been in and out of a few stocks (fortis,sintex etc) lately but didnt have conviction to stick with them for long . Looking at poly medicure but recent run-up is making me a little wary to enter
Looking forward to everyone’s thoughts and feedback
i think stake of 27 % in PVR is high, unless you are very confident of the management and business. It is a capital intensive business, real estate prices are very high and if i am correct so are the rentals. However, there is an advantage that living close to a multiplex are more likely to go there.
Zicom - in the past promoters used to frequently issue warrants, promoter holding is low, a stake of 23 % in such stock seems high to me.
Why hold on to Granules if you are convinced its not worth holding it? Don’t you believe there are other cos which can generate higher returns if the same fund locked in Granules is re-deployed asap?
Any investment in cyclicals will come with opportunity cost and even further downside if we do not get the timing right. What’s your thought process on the likely turnaround time for the sector?
PVR investment was made in 2010 and early 2011 , at the valuation prevaling at the time i was extremely convinced about PVR’s prospects and management and felt the market price offered great margin of safety so loaded up.Stock had a big run up in 2012 though iam still convinced about it the valuations are stretched and running ahead of fundamentals . Market is excited about PVR as a lifestyle/retail consumption play due to its diversification in to other retail entertainment formats and plans for lifestyle retailing segment etc. With the substantial debt and equity dilution done to fund cinemax acquisition ,i feel earnings growth will be muted and there might be some time before bottom line starts looking up and match the premium valuations. so i have been booking profits steadily at every major rise and will make a complete exit soon with a view to reenter again on any sharp corrections.currently my allocation is less than 12% and going down from a peak of 60%.
There is not much by way of real estate investment from PVR , All the properties (except one) for PVR are on leased/rentals basis .Being anchor tenants , multiplexes usually get better terms on rental with real estate developers as they are major drivers for foot falls in a property. A screen takes about 2-3.5 crore to setup and break even on each screenis 18 months or less depending on the location . Rentals and power costs consume a big chunk of expenditure but they also enjoy reasonable pricing power and have past on the cost increases to end consumer via Ticket price and F&B hikes.
For zicom ,the security space offers huge potential in india . iam betting on big oppurtunity ahead of the company and thier experience in the domain will help them capitalize on it even though competition will only increase . i will keep an eye on how management fares on the various initiative they have taken like focus on expanding retail reach, fire protection business in india and thier various international ventures etc and take a call on whether it translates to bottom line growth or not .i think promoters are reasonable quality and with addition of respected guy like V Raman kumar who made a PE investment in the company on board any minority shareholder unfriendly activity will be kept in check.
I fully agree with you and iam gradually reducing granules position and switching it to unichem. its just that iam running undera loss so finding it difficult to stomach the loss in a single goand hoping forsome rally post annual results .
I wasexpecting turnaround to take about a year or so on back of interest rate cutsand demand pickup. Though after reading more about current problems of auto sector my initial optimism about imminent revival of auto sector has somewhat waned and i feel that there is bit more pain left before things start looking better , so iam staying put and delaying adding anything to this position . i felt i would never get perfectTiming so a slow and staggered approach of accumulating over next few months would let me capture the lows along the way and over a period of12-18 monthsatleast 50% looked possible when the turnaround materialized.
In my early investing days, taking losses was difficult for me. In my experience it is always better to go for a clean surgical cutting of positions if one feels one has got into the wrong kind of stock.
There might be a one time pain but then one can focus on the better opportunities lying elsewhere.
Hitesh , well said . going for a clean surgical set today thanks vinod and manish as well for sharing your feedback
Mahesh C , it appeared decent on conventional parametres .i dont have a very big position less than 2% . i was just going for a basket of auto components who maintained good dividend yield over a period of time for a turnaround in auto sector in next year or so. given that things arent exactly getting better iam not adding anything to this position as these stocks could become even cheaper . Probably got in little early anticipating the cyclical turnaround .
Partial profit booking in PVR
Exited Granules, got little lucky by exiting just before yesterday’s price crash.
cleaned up marginal holdings in Gabriel,sona etc these stocks will probably be available cheaper, Will get in again on sizable price correction or some signs of cyclical recovery in auto .
Increasing cash level and sitting tight for now and looking at good entries in valuepickr faves like astral, PI etc. Apart from that will add unichem and EPC on any substantial corrections
. Though business prospects look exciting some how little suspicious of the promoters and will likely exit on a rally if it gets closer to my average price of 160.
thanks vinod and manish as well for sharing your feedback