ValuePickr Forum

Subhrajyoti's Portfolio

Hello

I am Subhrajyoti and have been part of this forum for about an year and mostly have followed the threads pertaining to my companies of interest.

I am a banker by profession and have been investing for about a decade now.

I am sharing my portfolio composition and would be grateful to hear your views on the same.

Company CMP Inv Price Weight
Abbott India 16,810 8,495 28%
HDFC Bank 853 374 18%
Kotak Mahindra Bank 1,152 1,502 18%
Titan Company 893 737 9%
Bajaj Fin. 1,830 3,251 7%
Honeywell Auto 26,725 25,070 5%
City Union Bank 123 102 4%
Hind. Unilever 1,977 1,685 4%
Britannia Inds 3,164 3,026 3%
Asian Paints 1,631 1,760 2%
Bandhan Bank 202 527 1%
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Hi Subhra, Your portfolio is structured with no-brainer Gem & Jewellery.I’m sure no cons. are there except adverse economy & cyclical situation.Here the matters is wht is your .avg holding price? In my view you should keep patienc to get out of this adverse situation

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I would suggest slightly cutting down on Abbot and re-deploying. Looks like the Abbott has been very good for you but I would book some profits along the way if I were in your shoes.
Best of luck!

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Thank you @Jiitt007 and @alexander for your feedback.

I was lucky to have started my investing after the 2008 GFC aftermath which allowed me to enjoy the subsequent compounding till Covid-19 crash. So a core part of my portfolio in financials (except Baj Fin) have 8-10 holding years and hence low avg holding price.

Abbot was another stroke of luck. invested recently as a high ROCE quality franchise with an expectation of slow compounding and as a diversification from high conc in financials.

Unfortunately Bajaj Fin invested around same time had a different trajectory to Abbot.

However my horizon is about 20-22 years (till retirement) and would like to see my investments grow uninterrupted, unless of course some major change in fundamentals happens.

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Hi,

You have an excellent portfolio (had there been no Corona cirisis). Now that we have an issue, I would be extremely light on financials and heavy on pharma, consumption and speciality chemicals. All the best.

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My updated portfolio

NAME CMP Inv Price Weight
ABBOTT INDIA LTD 15501 8495.51 20.25%
HDFC BANK LTD 1106.65 374.47 18.69%
KOTAK MAHINDRA BANK 1353 1502.63 16.43%
BAJAJ FINANCE LTD 3304 3251.09 10.11%
NESTLE INDIA LTD 16820 16726.29 9.16%
TITAN COMPANY LTD 965 737.82 7.73%
HONEYWELL AUTOMATION INDIA LTD 28697.45 25070.69 4.37%
CITY UNION BANK LTD 132.2 102.78 3.78%
HINDUSTAN UNILEVER LTD 2230.1 1685.75 3.42%
BRITANNIA INDUSTRIES LTD 3726 3026.21 3.04%
BANDHAN BANK LTD 373.3 527.09 1.52%
ASIAN PAINTS LTD 1705 1760.63 1.49%
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You will do fine with 10-12%. As all these are well discovered and have valuations which are on higher side.

This is a reasonable expectation, I agree and also was my outlook when I started out about a decade back.

But my actual experience is pleasantly different.

Even with well discovered large caps (albeit with high ROCE and reasonable bottom line growth) , if we

  1. Take concentrated bets.

  2. Take big bets - timing

significant alpha is possible even in this category.

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Too much concentration on funancials - banks and nbfc can be brought down by replacing city union and bandhan Bank by some other compunder in league of your other picks. Somehow these two do not seem to fit in there. Also, some percentage of nbfc or bank can be trimmed ( I would prefer to trim nbfc) and allocate that to insurance or AMC space if at all you want to continue being financials heavy

CUB till Covid-19 had outperformed HDFC Bank on a 10 year horizon.

Agree HDFC Bank and Kotak are on a different league alltogether but CUB is also a respected small sized old private bank with over 100 years existence and conservative underwriting.

However it has a geographical concentration of Tamilnadu and sectoral concentration of MSME sector, both of which are under some cloud currently and hence the stock sharply corrected.

However I am still bullish on CUB long term.

Bandhan is a conviction BET. I am from microfinance sector and working in a Bank and have studied Bandhan for more than a decade now from its inception as a MFI.

Will study Bandhan for few more years and then will take a final call.

Being heavy on financials is a decision I had taken early in my journey as this lies within my COC.

Diversification I have been doing in FMCG. I have recently entered in Nestle and created a 9% holding.

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Bandhan is a conviction BET. I am from microfinance sector and working in a Bank and have studied Bandhan for more than a decade now from its inception as a MFI.

Will study Bandhan for few more years and then will take a final call.

What negatives do you see in Bandhan, which has stopped you from investing in it, with better conviction?

Considering you are in the MFI Sector, your inputs would help a lot!

Disc - Invested in Bandhan.

First the positives -

  1. Bandhan since inception has been extremely cost conscious in its operations

  2. But it has been very aggressive geo expansion wise

  3. It has been able to keep a very low profile and avoided any confrontation with govt machinery. This is where the south based MFIs failed even though they were far bigger than Bandhan for a considerable period of the journey. Example: SKS

In fact they have always collaborated with state machinery so that has helped them in times of crisis such as WB’s Shardha scam related field backlashes and overall demonetization period.

However since it became a Bank it has become very very aggressive in its lending. The understanding is that they need to grow their balance sheet and with all the cheap CASA coming in from Banking operations needs to be deployed too. So rather that going heavy in other untested sectors it has got aggressive in its core market i.e; Microfinance.

However microfinance being unsecured lending, over aggression has always led to bubble and subsequent backlashes. Such as as have recently been seen in Assam.

So we need to see how a conservative lender who has turned 180 degrees and become a hyper aggressive one manages this transition in the medium/long term.

In India - the biggest risk to microifinance operations is regulatory backlash prompted from customer complaints (poor customer/bottom of pyramid) who are the core constituencies of Indian politics.

Done right its one of the most scalable and profitable (marginwise) lending opportunity in entire retail financial spectrum along with Credit Cards.

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Although Bandhan has been aggressively lending don’t you think it’s still acceptable as their collection % are one of the best in the industry?

I mean with low NPAs and high collection rates, should we be too worried?

Bandhan’s collection team/effort is it strength no doubt.

But in an unsecured lending there is a point till which you can go on the back of collection confidence beyond which it backfires.

The reported collection numbers are well…hmm…I would give it more time.

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I am holding at ipo price

Worried about Wednesday results. Shall i exit in break even on Monday?

You have an excellent portfolio. Could I seek your advice what you action you took in Feb/March 2020 fall and thereafter?

This is purely an individual call. I cannot answer it.

As far as I am concerned I am happy to hold my positions even if there is a 50% correction.

Price on the short term means nothing.

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  1. Added into existing portfolio of HDFC Bank and Honeywell Automation

  2. New Additions - Asian Paints and Nestle India.

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