As of today, I have reduced my stake in Powergrid from 4% to 2%. This is because its priced appropriately (close to 2x P/B) and I don’t have a clear visibility of its growth due to very high asset commissioning. This is good for free cashflow generation but creates doubts regarding business growth (or growth in book value). TBCB projects, Railtel and consultancy projects cannot fill this hole as they are still very small compared to transmission revenues. On the other hand, utilities such as NHPC and SJVN have higher growth visibility and are trading cheaper. I am thinking of giving a higher weightage to them to fill this gap. Will update once I have made a decision. Model portfolio is below, cash remains high at 25%
Core compounder (44%)
| Companies | Weightage |
|---|---|
| I T C Ltd. | 8.00% |
| Housing Development Finance Corporation Ltd. | 4.00% |
| NESCO Ltd. | 4.00% |
| Manappuram Finance Ltd. | 4.00% |
| Alembic Pharmaceuticals Ltd. | 4.00% |
| Amara Raja Batteries Ltd. | 4.00% |
| Avanti Feeds Ltd. | 4.00% |
| Eris Lifesciences Ltd. | 4.00% |
| Ajanta Pharmaceuticals Ltd. | 2.00% |
| HDFC Bank Ltd. | 2.00% |
| HDFC Asset Management Company Ltd | 2.00% |
| PI Industries Ltd. | 2.00% |
Cyclical (13%)
| Companies | Weightage |
|---|---|
| Kolte-Patil Developers Ltd. | 4.00% |
| Ashiana Housing Ltd. | 2.00% |
| Ashok Leyland Ltd. | 2.00% |
| SWARAJ ENGINES LTD. | 2.00% |
| Kaveri Seed Company Ltd. | 2.00% |
| Jamna Auto Industries Ltd. | 1.00% |
Slow grower (6%)
| Companies | Weightage |
|---|---|
| Cochin Shipyard Ltd. | 4.00% |
| Power Grid Corporation of India Ltd. | 2.00% |
Turnaround (6%)
| Companies | Weightage |
|---|---|
| CARE Ratings Ltd. | 4.00% |
| Lupin Ltd. | 2.00% |
Deep value (6%)
| Companies | Weightage |
|---|---|
| SJVN Ltd. | 1.00% |
| ATUL AUTO LTD. | 1.00% |
| Jagran Prakashan Ltd. | 1.00% |
| D.B.Corp Ltd. | 1.00% |
| Time Technoplast Ltd. | 1.00% |
| RACL Geartech Ltd | 1.00% |