With a sharp price drop in RACL Geartech, I have increased its position size from 1% to 2% and changed its basket from being a deep value bet earlier to now being a cyclical bet. As cash position was anyway zero, I have reduced position size in Manappuram Finance from 4% to 2%. Interestingly, I didn’t have to sell shares of Manappuram to reduce the position size, the sharp cut in stock prices did the job 
Last couple of years have been really good for RACL with strong earnings growth coming in on the back of continued sales growth and expanding margins. Market has also recognized the same and stock has moved up a lot and doesn’t trade at very cheap multiples anymore. From a near term perspective, RACL can be adversely impacted due to on-going European energy problems. However, the management seems very confident of achieving 20%+ sales growth while maintaining margins over the next 3-years. If that happens, I expect their PAT to reach 45-50 cr by FY25 (20%+ EPS growth on FY22 base). However, valuations are also fair at 20x earnings. Given the risk reward, I have still not made it a full position and limited exposure to 2%. Updated folio is below and cash remains at 1%.
Core compounder (44%)
| Companies | Weightage |
|---|---|
| I T C Ltd. | 8.00% |
| Housing Development Finance Corporation Ltd. | 4.00% |
| NESCO Ltd. | 4.00% |
| Eris Lifesciences Ltd. | 4.00% |
| Ajanta Pharmaceuticals Ltd. | 4.00% |
| HDFC Asset Management Company Ltd | 4.00% |
| Aegis Logistics Ltd. | 4.00% |
| Gufic Biosciences | 4.00% |
| HDFC Bank Ltd. | 2.00% |
| PI Industries Ltd. | 2.00% |
| Shri Jagdamba Poly | 2.00% |
| LINCOLN PHARMACEUTICALS LTD. | 2.00% |
Cyclical (42%)
| Companies | Weightage |
|---|---|
| Kolte-Patil Developers Ltd. | 4.00% |
| Sharda Cropchem Ltd. | 4.00% |
| Avanti Feeds Ltd. | 4.00% |
| Aditya Birla Sun Life AMC Ltd | 4.00% |
| Alembic Pharmaceuticals Ltd. | 4.00% |
| Amara Raja Batteries Ltd. | 4.00% |
| Ashiana Housing Ltd. | 2.00% |
| Ashok Leyland Ltd. | 2.00% |
| Heranba Industries | 2.00% |
| Kaveri Seed Company Ltd. | 2.00% |
| Control Print Limited | 2.00% |
| Sundaram Finance Ltd. | 2.00% |
| Time Technoplast Ltd. | 2.00% |
| RACL Geartech Ltd | 2.00% |
| Manappuram Finance Ltd. | 2.00% |
Slow grower (4%)
| Companies | Weightage |
|---|---|
| Cochin Shipyard Ltd. | 4.00% |
Turnaround (4%)
| Companies | Weightage |
|---|---|
| Punjab Chem. & Corp | 4.00% |
Deep value (5%)
| Companies | Weightage |
|---|---|
| ATUL AUTO LTD. | 1.00% |
| Jagran Prakashan Ltd. | 1.00% |
| D.B.Corp Ltd. | 1.00% |
| Shemaroo Entertainment Ltd. | 1.00% |
| Modison Metals | 1.00% |