Its been a good month for the portfolio overall with the newer bets like SIS and Faze Three doing well. Raghav Productivity has re-rated significantly and now up >50% in the last month. Valuations are frothy here. Real-estate bets have also done well with the overall developer basket up ~20% over the last month. Rest of the pf has largely remained where it was last month. All stocks in the green now; such performance is unlikely to be repeated going forward. 1 new entrant in the PF:
- Added Arvind Fashions Ltd. I have been following this group for a while. I have noticed that Management here is really bipolar: completely inept and wild when times are good. We have seen this in the early part of the last decade and again from 2016-19. This inevitably leads to periods of high stress such as 2008-10 and today. In these times, management has been amazing; made all the right decisions and made the organization leaner and focussed. I see this playing out again in Arvind Fashions. A lot of the tail brands have been discontinued/in the process of being discontinued and management is focussing now on just 6 brands. I was very pleasantly surprised to see Unlimited also being sold to VMart last week which made me initiate the position. The valuations are reflecting 2 years of intense pain; most investors have written off the management and the company. If we take just US-Polo; that is a 1000 cr revenue brand. Given that management sold a stake in Flying Machine (a much smaller/weaker brand) last year at a 1000 cr valuation; it would not be unreasonable to posit that the fair market value of US-Polo brand is greater than the market cap of the entire company today. The fact that promoters are also regularly putting money into the company in rights issues also provides comfort that the risk of bankruptcy is low. Initiated an 8% position here; and there is no reason why it couldnt be higher.
