The harsh portfolio!

As of today, I have sold my 2% position in Infosys, reduced allocation in Indigo from 4% to 2% and invested the money in HDFC bank (at 4% position size).

Assumptions
Infosys: FY20 revenue: 90’791 cr., will grow @10% to 146’220 cr., Earnings (28% PBT margins): 146’220*28%*75% ~ 30’706 cr., Sell at 22P/E ~ 675’532 cr. (share price: 1587). Incremental returns are ~6%.
HDFC bank: FY21 book value: 210’443 cr. (382/share), share count ~ 551.23 cr. In FY25 book value will grow @18% to ~ 408’000 cr. Long term share dilution ~ 2% i.e. 597 cr., Book value per share: 683 (including impact of dilution). I would like to sell at >4P/B (share price: 2732). Incremental returns are ~19% (adding 1% dividend yield)

Risk reward seems to be more favorable for HDFC bank vs Infy (hence the switch). Updated portfolio is below.

Companies Weightage
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%
NESCO Ltd. 4.50%
Maruti Suzuki India Ltd. 4.00%
Suprajit Engineering Ltd. 4.00%
Manappuram Finance Ltd. 4.00%
HDFC Bank Ltd. 4.00%
Housing Development Finance Corporation Ltd. 3.00%
HDFC Asset Management Company Ltd 3.00%
Reliance Nippon Asset Management Co 3.00%
CARE Ratings Ltd. 3.00%
InterGlobe Aviation Ltd. 2.00%
Lupin Ltd. 2.00%
Avanti Feeds Ltd. 2.00%
Cera Sanitaryware 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%
Inox Leisure Ltd. 2.00%
Jubilant Ingrevia Ltd 2.00%
Jamna Auto Industries Ltd. 1.00%
Ashok Leyland Ltd. 1.00%
Cash 0.00%
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