As of today, I have reduced position size in Indigo from 6% to 4% and used the incremental cash to add 1% position in Maithan alloys and Cadila Healthcare, both of these are now at 2% of portfolio.
The reason for reducing position size in Indigo is because its trading close to its fair price, which allows me reallocate capital into other bets. Alongside this, increased crude prices may impact company margins in the next few quarters. My bet on Indigo is on Indians traveling more and a budget airline to gain from this, so far that these has never been broken since I first bought Indigo (sometime in 2017).
About increase in position size in Maithan, I have wrote about my thought on its valuations (link), I expect Maithan to double in the next 4-years. About Cadila, I have done a detailed valuation work (in the next post) and would appreciate any feedback. I expect Cadila to double in the next 4-years. One thing I am contemplating is whether I should switch Cadila to Cipla which has a smaller US business (so can grow more). The updated model portfolio is below.
| Companies | Weightage (cost basis) |
|---|---|
| HCL Technologies Ltd. | 6.00% |
| I T C Ltd. | 6.00% |
| PI Industries Ltd. | 6.00% |
| Power Grid Corporation of India Ltd. | 6.00% |
| Larsen & Toubro Ltd. | 6.00% |
| Ajanta Pharmaceuticals Ltd. | 4.50% |
| Kolte-Patil Developers Ltd. | 4.50% |
| Ashiana Housing Ltd. | 4.50% |
| InterGlobe Aviation Ltd. | 4.00% |
| NESCO Ltd. | 4.00% |
| Bajaj Auto Ltd. | 4.00% |
| Suprajit Engineering Ltd. | 4.00% |
| Housing Development Finance Corporation Ltd. | 3.50% |
| Lupin Ltd. | 3.50% |
| Manappuram Finance Ltd. | 3.50% |
| HDFC Asset Management Company Ltd | 3.00% |
| Reliance Nippon Asset Management Co | 3.00% |
| CARE Ratings Ltd. | 3.00% |
| Avanti Feeds Ltd. | 2.00% |
| Cera Sanitaryware Ltd | 2.00% |
| Indian Energy Exchange Ltd. | 2.00% |
| Infosys Ltd. | 2.00% |
| National Aluminium Co. Ltd. | 2.00% |
| NATCO Pharma Ltd. | 2.00% |
| Wonderla Holidays Ltd. | 2.00% |
| Maithan Alloys Ltd. | 2.00% |
| Cadila Healthcare Ltd. | 2.00% |
| Biocon Ltd. | 1.00% |
| Ashok Leyland Ltd. | 1.00% |
| Inox Leisure Ltd. | 1.00% |
| Cash | 0% |