There is a seperate thread on Oracle financial services software …to understand more on the subject.
Thanks
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Update:
Opened a small position in HDFC AMC today (~3%). Has fallen -12.7% from monthly highs which seems to be an overreaction because of uncertainty caused by the Sebi circular and also the class action lawsuit (although it focuses only on HDFC Bank, it’s the brand image being tarnished). Although my DCF calculations would have suggested me to value HDFC AMC around 1750, it did not reach those levels even during the March crash. If it does reach that level though, I’d happily buy more. It has a 5yr AUM CAGR of 25%, and I’m bullish on India’s MF industry.
Current allocation:
| Number | Stock | View |
|---|---|---|
| 1 | Reliance Industries | Long term, making good moves with Jio+retail. |
| 2 | HDFC | Long term, undisputed NBFC leader |
| 3 | SBI Cards | Long term, good growth expected |
| 4 | Bajaj Auto | Long term, three-wheeler market leader + good 2 wheeler exposure |
| 5 | HDFC Bank | Long term, biggest private bank |
| 6 | Muthoot Finance | Long term, diversification into gold + equity in NBFC |
| 7 | RITES | Medium term, Rail + Infra PSU, good order book, divestment |
| 8 | Firstsource Solutions | Medium term, small-cap IT firm with good growth |
| 9 | Wipro | Long term, most innovative IT company along with HCL |
| 10 | Rail Vikas Nigam Ltd | Medium term, Rail + Infra + Finance PSU |
| 11 | Deepak Nitrite | Long term, Cheap valuations + good free cash flow |
| 12 | IRCON International | Medium term, Rail + Infra PSU, does international construction too |
| 13 | HDFC AMC | Long term, Market leader AMC + bullish on the industry |
My free cash position has depleted from 21% to 13% now. Will be adding more to it in coming few months.
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If any company reaches a price I think is below its fair value by a fair margin, and I like the business, I’d happily buy more. Why do you think that it will reach levels of 1750 though? Any particular reason that I’m not aware of?
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Update:
Opened a small position in Britannia yesterday (~5%) after it was down over 14% from its ATH despite good results. They have a small short term borrowing position this quarter but I feel that management will want to keep it short term and pay it out as soon as their liquidity needs are over. They also expect the rural area to contribute to their growth in the coming quarters. Decent dividend payer at a valuation less than its median seems like a good defensive buy.
SBI Cards posted good pre-provisioning profits (37%) but their net profit has essentially halved, gross NPA has doubled in 1 year and has reached a concerning 4.8%. Although it’s understandable to have increased NPAs across the sector in this quarter since a lot of eligible payers are now jobless or have subdued business. The market reacted strongly to this and hence it is down over 7% today. Will monitor the stock for a week to see if there’s any more volatility and will add more. They have an amazing balance sheet and more than required capital adequacy ratio so I’m sure this is a temporary hiccup.
I’m also looking to buy some GMM Pfaudler after their amazing results. The management is under some heavy questions after the whole OFS fiasco, but I do see an amazing monopolistic competition environment for the company and with good results, it puts the faith back in the company as well as in the management in coming quarters.
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