If you look for above qualities then you should reconsider picks like emami, bajaj consumer and vodafone among your picks. I don’t track others…good thing is these are not significant holdings…look trading bets to me…where management quality does not matter much…
Would like to understand why you think there are problems with management of Emami, Bajaj consumer or Vodafone Idea.
Emami is facing pledge issue, because of promoters’s misadventures in other businesses.
Bajaj Consumer: Heavy pledges which are no longer there.
Vodafone Idea: Solid promoters who has found himself on the wrong side of competition.
Will like your view why you think the management may be dubious.
Thanks
Pls note I do not mean management is dubious or any fraud. I was referring to quality, competence and corporate governance etc. For eg. Would you want your cash rich companies promoter constantly pledging their shares and when pledge released by selling stake…the charm of your single product company which was dividend going away with the pledge… something like that happened with bajaj consumer.
Rest you answered yourself…a company which loses to competetion and external environment so badly, would it be at best traded or invested for long term?
Disc. These are no buy sell recommendation and only my views on business alone… and I can be completely wrong in my assessment with my limited knowledge
How about following companies
- Larsen and turbo
- TCS / INFY
- Cochin Shipyard
Point taken.
You are right. I would have hardly purchased these businesses on a higher valuation. I know there are business which are better than these wrt market share, quality and corporate governance.
For eg, Between Airtel and Voda Idea, I am certain that Airtel is a more stable bet. Between Marico and Emami, Marico is positioned better. Similar for other picks.
I am early into investing, haven’t been able to hold stocks for more than a few days. And I have missed out benefits of compounding because of that.
I would love to buy steady compounders like HDFC Bank, Asian Paints, Nestle India but I am not comfortable with the valuations.
Thank @shridharrathi
L&T looks a good long term bet on Indian infra and defence story.
Cochin Shipyard is definitely worth a look at these valuations. I am just not comfortable holding government entities for long term. They have been biggest wealth destroyers for last 10 years, whatever the valuations.
Info & TCS are safe and mature businesses. I can look at TCS at lower valuations.
Thanks
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Added 3 more stocks to my portfolio 
BirlaCorp : 1.25% >> Prominent cement player at attractive valuations
S P Apparel: 1.25% >> Garment stock with ~2 P/E, financials look fine. Crocodile brand is a call option
Kitex Garments: 1.25% >> Once 50 P/E stock trading at 6 P/E, may be beneficiary of global trade war, with only mild impact of Covid-19, Weak rupee will help the margins
After being out of the market since the last 8 months, I have been investing since the last week. I have been surprised by the resilience of India markets. While cyclical stocks have done very well, new age tech stocks were hammered beyond imagination. India has followed the rest of the world markets in discounting high growth tech stocks. Inflation at multi decade high, Fed tightening aggressively and liquidity crunch, all combined, have led to discount in valuation multiples of high growth stocks. All of these factor are likely to mellow down in next 6 months.
Being a contrarian, I am inclined to invest in these stocks which are available at very attractive valuation. Trying to catch a falling knife, I may be very early and go through painful drawdowns.
Current Portfolio Composition:
Stock : Allocation : Avg Price
PAYTM : 56% : 508
PB Fintech : 24% : 387
NYKAA : 20% : 172
Current revenue growth rate, Expected growth rate, EV/FY 24 Sales
Paytm : 60-70% , 50%, 3x
PB Fintech : 60-70%, 50%, 6x
NYKAA : 40-50% , 40%, 6x
Quality, Execution
PAYTM : Questionable, Bad before IPO, good after IPO
PB Fintech: Not sure, Good
NKYAA : Excellent, Excellent
All of the three stocks have been going through a forced selling phase as PRE-IPO investors take their stakes down. High volumes also indicate capitulation phase. News flow is very negative and sentiments against no-profit companies is very bad. It is complete opposite of what I observed 12 months back. Sentiments are cyclical, this too shall pass! High growth in revenues with a path to profitability is how new tech companies become behemoth. Execution remains the most important aspect in such business.
PAYTM is available at very attractive valuation ( Same as Alibaba, Ant financials) in a good growth market like India. I am not sure about management here and suspicious of internal holding structures where VSS seem to benefit more than PAYTM. I would likely take my exposure down in this. I got very enthused by the last quarter result and deliverables there and increased my exposure to a point which looks unreasonable.
NYKAA is an excellent story and is capturing a market where biggies (AMAZON, MYNTRA etc) have outright failed. Execution is the key and management has shown excellent execution capability. I would like to increase exposure here.
PB Fintech is the largest digital player in insurance policy distribution and are already EBITDA positive pre-ESOPs.
All of the three have very large run-way. Execution is the key as disruptions are so common.
I have cash to deploy and would consider ZOMATO and DELHIVERY for further addition into the portfolio.
Inspired by discussions on your thread. Would love your opinion here
Thanks
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