Sumit's Portfolio

You’re absolutely right that trusted brands often show a bias toward their own AMCs, creating a potential conflict of interest for clients. This highlights the importance of unbiased wealth management firms that clients can genuinely rely on for their financial needs.

Regarding PMS/AIF players, while they do operate in the wealth management space, they offer a distinct service focused on maximizing returns, often by taking on higher risks. This can be appealing to certain clients, but most HNIs are unlikely to commit 100% of their wealth to such schemes, especially when their primary goal is wealth preservation with minimal risk. PMS/AIFs can certainly play a role in an HNI’s broader investment strategy, but they are unlikely to be the sole focus. Instead of viewing them as direct competition, I see them as complementary offerings that might attract a portion of a client’s wealth, while the majority remains allocated to traditional wealth management firms.

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Thank you for your kind words.

To address your first question, I don’t practice technical analysis—not because I doubt its usefulness, but simply because I haven’t acquired the technical knowledge needed, nor have I made it a priority to learn. Given my investment horizon of 5-10 years, I believe the impact of technical analysis on my overall returns is likely minimal, which explains my reluctance to dive into it. Additionally, technical analysis tends to emphasize price movements as a guide for investment decisions, rather than focusing on the underlying business fundamentals. This can potentially lead to behaviors that prioritize short-term gains over long-term growth.

As for your second question, I keep my approach broad and open. I discover potential investments from a variety of sources—whether it’s ValuePickr, YouTube videos, screeners, or newspapers. When something catches my attention, I usually take a quick glance at the company’s profile on Screener and review their latest presentations, looking for any red flags that would allow me to dismiss it quickly. Only if I find no significant red flags does the company pique my interest, prompting me to dig deeper. Very few companies meet this stringent criterion, but when they do, I’m willing to expand my circle of competence by studying both the industry and the company more thoroughly—provided the objective criteria align (good management, strong financials, a solid business model, reasonable valuation, and significant growth prospects). In essence, my focus is more on eliminating ideas than selecting them, which means I end up pursuing only those that pass this rigorous filtering process.

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Thanks for your elaborate answer.

The reason asking for technical analysis is we can get better exit.
Even after so much of detailed analysis, some details will be missed which could impact the returns.
Those details will be known in hindsight. We had number of examples like that. So technicals could give prior indication

What could be your approach if you come to know that something is wrong in the company which you hold?Do you come out of the stock immediatly ? Do you have any such incidents in your journey?

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I agree that technical analysis can serve as a useful leading indicator for potential upside or downside when making buy or sell decisions. However, its impact may be limited for someone whose default behavior is to hold onto stocks unless a fundamental issue arises. That said, I do acknowledge that price and volume movements can sometimes reveal underlying fundamental problems before they become apparent to most investors. Therefore, learning technical analysis is on my to-do list.

Regarding your second question, the decision to sell depends entirely on the nature of the issue with the company. A recent experience with Aditya Vision taught me a valuable lesson about being cautious in reacting to market news. I came across a Twitter thread alleging accounting malpractices in the company. Without verifying the information or waiting for management’s commentary, I impulsively sold 80% of my holdings. Today, the stock is trading at three times the price at which I sold it, and the news turned out to be a hoax spread by an anonymous account. This mistake has made me more reluctant to sell quickly.

In my view, most stocks go through turbulent periods, including depressed earnings and unfavorable macroeconomic conditions. These challenges alone do not warrant selling. I approach this like a doctor diagnosing a company’s “illness.” If the issue is temporary, such as a few bad quarters, rising raw material costs, changes in key management personnel, or unfavorable macro conditions, I hold. If the issue appears to be chronic—persistent underperformance, consistent mismatches between guidance and outcomes—I reduce my exposure or exit the position entirely, depending on the severity. However, if the problem is terminal, such as a lack of management integrity, a permanent change in the business’s economics, or a maturing business with little growth potential, I sell outright. My experience with Yes Bank, where I sold as soon as I questioned management’s integrity, saved me from a 90% capital erosion.

There is one exception to my reluctance to sell. If I identify an opportunity that is significantly superior to my current holdings (emphasis on “significantly”), I am inclined to sell. Conviction in a new stock takes time to build, and a new investment, no matter how promising, will likely lack the conviction I have for a stock I’ve monitored for years. Moreover, selling a stock incurs capital gains tax (currently at 12.5%), which adds to the switching cost. However, if the new stock justifies it, I won’t hesitate to make the move.

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I live in Bangalore. It is possibly second most recognized brand here other than featherlite.

Anand Rathi Q2 Performance :

Anand Rathi Wealth Limited (ARWL) had a strong Q2 FY25, with total revenue reaching ₹249.6 crore—a 32% year-over-year growth. Profit After Tax (PAT) also increased by 32%, standing at ₹76.3 crore, maintaining a solid margin of 30.6%.

Their Assets Under Management (AUM) grew by 57% to ₹75,084 crore, reflecting their success in both attracting new clients and deepening existing relationships. Client growth hit nearly 20%, and the addition of 374 relationship managers (+20% YoY) supports this expansion.

Costs, like employee expenses, grew but remained efficient relative to revenue. Client attrition was minimal, showing strong loyalty with only 0.2% of AUM lost.

Looking ahead, ARWL raised its FY25 revenue target to ₹980 crore and AUM to ₹80,000 crore. The board declared an interim dividend of ₹7 per share, further rewarding shareholders.

In summary, ARWL continues to scale its business, grow profits, and capitalize on opportunities in India’s wealth management sector.

Infollion Research Services Limited: Financial Performance Overview (H1 FY2024 vs H1 FY2023)

Particulars H1 FY2024 (₹ Lakhs) H1 FY2023 (₹ Lakhs) Percentage Change (%)
Revenue from Operations 3,518.86 2,510.91 +40.14%
Total Income 3,618.00 2,543.80 +42.23%
Cost of Sales 1,854.93 1,333.44 +39.11%
Employee Benefits Expenses 807.94 544.69 +48.33%
Other Expenses 142.18 96.37 +47.54%
Profit Before Tax (PBT) 793.73 565.57 +40.30%
Profit After Tax (PAT) 593.81 422.90 +40.35%

Here’s a summary of the key updates for UGRO Capital Limited for the quarter ended September 30, 2024 (Q2 FY25):

  1. AUM Growth:

    • Total Assets Under Management (AUM) crossed INR 10,200 Cr, compared to INR 9,218 Cr in the previous quarter (Q1 FY25) and INR 7,592 Cr in the same quarter last year (Q2 FY24), reflecting a 34% YoY growth.
  2. Loan Origination:

    • Achieved the highest-ever quarterly net loan origination of INR 1,970 Cr, up from INR 1,146 Cr in Q1 FY25 and INR 1,477 Cr in Q2 FY24.
    • Significant growth in Micro Enterprises loans, with disbursements doubling to INR 450 Cr in Q2 FY25 compared to INR 209 Cr in Q1 FY25. This segment now contributes 11% to AUM, up from 8% in Q2 FY24.
  3. Co-Lending and Liability Profile:

    • Co-lending volumes reached INR 600 Cr, the highest ever, expanding partnerships to 9 banks and 7 NBFCs.
    • Mobilized INR 1,100 Cr in borrowing during Q2 FY25, compared to INR 375 Cr in Q1 FY25.
    • Total liabilities (excluding Direct Assignment) stand at INR 5,300 Cr, with a diversified borrowing mix: 45% from banks, 31% from capital markets, and 26% from Development Financial Institutions (DFIs) and Financial Institutions (FIs).
  4. Ratings and Recognition:

    • Received an upgrade from India Ratings to ‘IND A+/ Stable’ for long-term and ‘IND A1+’ for short-term borrowings.
    • UGRO Capital was awarded Best Fintech Lender of the Year by Financial Express.

ugro updates.pdf (2.9 MB)

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Summary of Q2 SJS Enterprises

Financial Highlights

  • Record Revenue: Achieved quarterly revenue of ₹1,927.9 million, reflecting an 18.1% year-over-year (YoY) growth. This increase was primarily driven by strong performance in the passenger vehicles (PV) and consumer segments, as well as a significant rise in exports, which grew by 54.7% YoY.
  • Enhanced Profitability: EBITDA margins improved by 370 basis points YoY, reaching 26.6%. This enhancement is attributed to higher sales volumes and operational efficiencies.
  • Debt Elimination: The company repaid a term loan of ₹300 million in the first half of FY25, resulting in a debt-free status and a net cash position of ₹388.8 million.

Operational Highlights

  • Industry Outperformance: SJS’s automotive segment growth outpaced the combined two-wheeler and passenger vehicle industry by 1.8 times, marking the 20th consecutive quarter of such outperformance.
  • Product Innovation: Continued focus on developing new-age products, including illuminated logos, optical cover glass, and in-mold electronics (IME), catering to the increasing premiumization in consumer markets.

Strategic Initiatives

  • Capacity Expansion: Initiated capital expenditures for capacity growth at Exotech, with plans to commission a new plant by the first quarter of FY26. Additionally, invested in green energy through 3MW solar power projects to enhance operational efficiency.
  • Export Growth: Strengthened international presence by securing new accounts and projects, particularly in North America, South America, and Europe.
  • Customer Base Expansion: Focused on growing major accounts by diversifying product offerings and exploring cross-selling opportunities within established relationships.

Environmental, Social, and Governance (ESG) Initiatives

  • Environmental Efforts: Increased renewable energy usage to 74% in production processes and achieved a 26% reduction in carbon emissions.
  • Social Initiatives: Undertook corporate social responsibility activities, including vocational training for underprivileged women and health support for rural communities.
  • Governance Standards: Maintained ISO 50001 certification and a comprehensive risk management framework to ensure sustainability and compliance.

These developments underscore SJS Enterprises’ robust performance and strategic focus during Q2 FY25.
sjs investor ppt.pdf (4.1 MB)

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Home First Finance Company Q2 FY25 Summary

  • Financial Growth:

    • Achieved record Assets Under Management (AUM) of ₹11,229 crore, marking a 34.2% year-over-year (YoY) growth.
    • Disbursements rose by 22.7% YoY, reaching an all-time high of ₹1,177 crore.
    • Profit After Tax (PAT) increased by 24.1% YoY to ₹92 crore, resulting in a Return on Assets (ROA) of 3.4% and a Return on Equity (ROE) of 16.5%.
  • Operational Highlights:

    • Expanded branch network by adding nine branches and eight touchpoints in Q2 FY25, totaling 142 branches and 351 touchpoints across 138 districts.
    • Employee strength grew to 1,642 from 1,249 in March 2024.
  • Funding and Financial Health:

    • Enhanced funding with two new banking partnerships and a first drawdown from the sanctioned $75 million from the U.S. Development Finance Corporation (DFC).
    • Maintained an improved spread of 5.3% by raising the Prime Lending Rate (PLR) in August.
  • Asset Quality:

    • Stable asset quality with Gross Non-Performing Assets (GNPA) at 1.7% and 30+ Days Past Due (DPD) reduced by 10 basis points to 2.8%.
    • Credit cost remained low at 20 basis points.
  • Digital Adoption and ESG Initiatives:

    • Strong digital engagement with 95% customer registration on the HomeFirst app.
    • Focused on sustainable finance, securing funding to promote affordable housing, especially for women borrowers.

homefirst ppt.pdf (4.3 MB)

Q2 FY25 Summary for All e Technologies Ltd. (Alletec)

  • Financial Performance:

    • Total revenue of INR 359.1 million, an 8.4% quarter-over-quarter (QoQ) growth and a 24.5% year-over-year (YoY) increase.
    • EBITDA of INR 91.3 million, with a 24.0% margin, reflecting a 38.3% YoY growth.
    • Net profit reached INR 66.8 million, achieving a net profit margin of 17.6%, up 39.4% YoY.
  • Operational Highlights:

    • Added 12 new customers in Q2 FY25, emphasizing growth in both domestic and international markets.
    • 93.6% of revenue was from repeat and recurring business, indicating a stable client base.
  • Strategic Initiatives:

    • Focused on Microsoft Cloud, Dynamics 365, and Power Platform for digital transformation services, with conversations trending toward RPA, data, and AI solutions.
    • Expanding into international markets with a targeted focus on Africa and the Americas.

This quarter, Alletec showcased solid growth in revenue and profitability, underpinned by a consistent client base and an increasing focus on global expansion and Microsoft-based digital transformation solutions.
ALLETEC PPT.pdf (5.6 MB)

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