YourRaj's Portfolio

[yourraj]

Can net profit be more than gross profit?

This is the criteria to dump the companies in past where I found the net profit is more than gross profit but when I dig more I found that it is possible to have net profit more than gross profit. How that possible,

Net Profit = Gross profit - direct expense +indirect income –indirect expenses

So in case where the indirect income is more than the direct expenses and indirect expenses there will be NET profit > Gross Profit

e.g GP=2000 , indirect income =500 indirect expense : 50 direct expense : 200

so the NP = 2000-200+500-50= 2250 so NP> GP

What are indirect income, it is income from the operation which are not directly related to main business activity such as Consultancy services, sale of scrape Provided the revenue must be recorded once the earning process is complete i.e after indirect activity or sale of scrape / production machinery ( idle or old technology which is beyond use or repair ) or service charge ( consultancy etc) cash is realised .

I am summing up some of the head categories in direct or indirect this may not be the complete list

Direct expenses : Licence cost ,raw material / industrial input costs , factory rent , fuel ( gas , electricity , heating , lights ) , custom duty of import , inward dock charges , wages , wages salaries , carriage inwards ,

Indirect incomes: Sale of scrape, interest income, dividend received, professional fees, consultancy charges received, Sale of fixed assets (non-business)

Indirect expenses: Insurance charges , office supplies , telephone and postages internet / leased line charges , depreciation , cost of utilities , research and development ( It is worth to mention that around 80% of R& D expense often drain out due to incompetent processes or methodologies ) , salaries , Entertain / travelling expenses, Advertisement expenses ( new product do boot the revenue but also add a major cost in this head ) .

However, it is scary to find out that companies can manipulate the earning or expenses in both directions, they can either inflate or deflate depend upon the company what they want to show o the investor. Don’t rule out any company based on screener criteria first select the theme which look promising in future find the sector , dice that to sub sectors and find the good companies ( It is widely vague ) one need to dig in to AR , concalls , company’s e filings

Regards

[yourraj]

Changes in portfolio
Exit : Tata Elxi as met with target i order to offset some of the profolio losses to reduce the ST capital gain
Entry
Srikalahasthi Pipes Ltd : Largent producer of low cost DI pipes theme and bet is on piping of portable water pipes Major cities will face shortage of portable water Moats : operation of scale and low cost quality pipes
Bandhan bank : applied for ipo not get the allotment patience let me to enter in the scrip . working on micro finance and working in most difficult area of banking WB Assam the Model of operation is very good a recent visit to local branch help me understand the working better . It is speculative bet i don’t know how to value a bank yet i decided to get it go as i roughly found the valuation is attractive and bet is on the rider book by tamal is really good though he is advisor to the bank and his writing i take with pinch of salt .Yet the bank able to sell me story. Thanks Vp Thread
TCS : The bigger it gets the bigger is it’s networking moat .Most of the banks work on it’s financial products . Recent deal in retail segment will expand it’s wings.
regards

[yourraj]

Putting some random thought and sharing random learning
Selection of stock finally boiled down to three factors to
Cash flow : Money is what Runs or score on the board to a competing teams .The Points secured or run made in an match give an edge But in terms on money and time millions of people watching games in arena or online channel do they earn anything else than the entertainment . They are paying for watching the match but in the head they are generating their own dopamine which give them a kick of excitement . but on the money end the organizers the indirect participants (Team management and coach ground men etc.) players get the monetary benefits . The change of wealth takes place from the hands of watcher to the stack holders . In longer perod of time only the best entertaining and with competent edge wins. in stock league too the company which offer maximum value for each of the stack holder will win . I am not good fan of ambai’s but the recent merger of Network 18 will generate a disruptive edge with win for all stack holders - regulators , customers , stack holders of merging companies . I am lucky that i get invested in network 18 Broadcast .

Capacity to earn : It is not only the infrastructure or the core Plant machinery or people in the organization but the way leader organise them in most efficient manner to get the maximum out from the individual resources . The capacity is not what is rated but the capacity to build and plan ahead of time to forecast the future demand and by keeping continuously head down and working towards the continuous improvement of the procedures

Risk : It is random and we can not able to precisely able to calculate .as more number of event can happen because of the unpredictable nature of market and mood swing among human being having different secretion level of dopamine in the brain due to involvement of satisfying one’s ego led buying and selling .

One must duly check people business and price w.r.t value offered by a company before investing

Most of we know
Net value of a company = Fair market value of Assets - Fair value of Liability
the real magic / building competence of valuation any company is in finding what is the real value of assets it is not a number but How much valuable contributing life remained of the assets and it is fair to say the present value ( in terms of money ) of an old asset is depreciated and one can find in the PPE section of balance sheet . inventory as an asset is simple but valuation of same is crucial .

Disc : in vested in network 18 .i may exit or entered in any scrip without informing to the forum. This is not any buy sell or hold recommendation i am not any sebi approved analyst . one must consult registered analyst before investing

[yourraj]

Portfolio change : Ajanta Pharma is completely Out being white elephant in my portfolio from long time but after break even and satisfactory return . the company is good i havn’t found anything bad but i found good opportunity bet and proceeds invested in Solara Active Pharma Sciences Ltd. ( It is demerged entity has strong Parental DNA from Strides and Sequent ) and is in good bet in current scenario of coronavirus along with iol Chemicals in the space of pain killer and as the global prices are on rise and the major revenue of the firm comes from the export . I don’t know how long this will add but for at least for a couple of quarters.
last earning presentation : https://webowizard.com/solara/wp-content/uploads/2019/10/Q3_FY_19_Earnings_Presentation_April_16_2019.pdf
Disc: in vested in both IOC Limited and Solara Active Pharma Sciences. This is not any recommendation to buy sell or hold

[yourraj]

Baseless Mindless Reasons to add some TAIL endears from 52 Week Lows
Adding tail with 1% in each of he following amidst of the bargain offer with FOOLS logic tHat these will remain in business fro at least two more years
Eicher : JAVA ho ya kwah BULLEt is the jaan on indian roads
Avanti Feeds : Shrimp to banta hai bahi … Bahut din ke baad aaya pakad main but can dive further so Watchful …
Marico Ltd : Every winter my kids and family love the chumpi with Parachute Naryal ka tel …
ITC Ltd : After long struggle of almost twenty year finally quit AGAIN the smoking but ii is very very hard habit and need solid strength Thanks to my investing learning That one must be keep alive to at the fruits of investing … The money is good when invested rather than spending on smoke bubbles … 5 year low 25000 Crore capex in tunnel Food park in Punjab will turn soon .
HDFC Bank : One of elitle Women Power on the head role and have plenty of steam left in the boiler room with slow and steady expecting around 15% / annual if got more that will be bonus .
Gillete : Indian shave at low cost designed to separate men among the boys …
Hero Motors : Desh ki dhadkan and Hero being my first bike Passion … i like to won as a memory to my mother in law who passed away a couple of weeks ago … it gave me the feeling of attached to ground ( this also one of the Gramm type stock that i love to own … and waiting too long to Hold

Strategy : initially i added 1 stock of HDFC BANK , Gillette , Hero Honda , ITC … No calculations are made just when they down to 15+% as

HEG & Graphite india ( they are cyclic and very low but be mindful to invested this may take lot of time to up movement of any 52 week low hanging stocks so one need to be very careful while investing in cyclic stocks
Primal Enterprises : Ajay primal has capability to hold my 1% and that’s the money i afford to loose but i am certain that he won’t go out of business for next two years …

Disc: One must study hard and observe the market and study the nature of the individual stocks Numbers are sometimes deceptive . There is no shortcut for success ,This is not any investment advice to UY SOLD or Hold I am not any Sebi approved analyst One must consult the registered equity advisors before investing money

[yourraj]

Portfolio Change : Complete out of Asian Paints and IOL Chemicals making gain 35.5% together which is more than the expected 30% per year What I see is that there is lots of bargain in current scenario and want to protect the gain and plan to move the proceeds to some good business and try to sit on side line for some time and watch Titan / Bata / Dmart / Pidillite to slide more …

There should be some reason to exit and reasons may be silly but if you think it is good to Protect your capital go out and DO that because CAPTIAL is finite and opportunities are plenty in the volatile market and that is a good reason to exit .Some time base less or reason less exit may skip a few points but you must take some breather to plan your next move . It is not rapid chess that one has to move a pawn or rook within speculative time but you need to check that what can be good for your portfolio . a great business such as Asian paints certainly a dream stock in anyones’ portfoilio but NAME doesn’t fetch you returns but at what level you made the entry and how you plan exit make a lot of difference .

I made a change in allocation of funds i diced and sliced the bet in to small 4 or 5 steps and when stock goes down more than 8 to 10 % . However one must pick the good business - i may not be able to find great business at bargain with long history of working and with sound track or identifiable brand in the common persons memory . i was not sure when i bought the Asian paint it was high Price to earning 58 and even now it is still 64 but i was lucky to track and get in to the position when it has lowest PE . I was not sure weather this will slide more or not but i was just lucky to get in and ride … and now the market is offering more opportunities and i have short of funds and also i want to protect my gain i just exited without emotional attachment to the scrip . High P/E or LOW P/E … which stock one should buy ? and how long one should hold … As long as the company is stretching the earnings and adding new products / improved services touch points that business is growing it’s Roots firm to ground and higher braches in the air to breath more air and get more sunlight to grow …

Integrity and Growth both vital but one does not compromise on integrity of the promotors
In past i was waiting positions to turn around and even average the winners and looser too but I found it was very costly without fully checking the background of the promoter . I sold Pincon Spirits , Vakrangee but DHFL i am still own just to remind myself what a fool i was . Buying 100 Rs currency note at 60 or 75 is worth and do miracles .it either struck at very first sight or you pay tuition fee to Mr market to understand this . Also on top of 60 or 75 Rs one must give additional risk premium to get ride of inflation ( margin of safety ) which can be 5 to 7% more making a sense …

Have a reasonable margin of safety and with practical expectation from the market will lead to creation of wealth and moreover protection of wealth should be the aim with lowest possible risk . High risk doesn’t always directly proportional to high gain .

Regards

[sivaramtvl]

Could you share your current portfolio?

[axiskumar]

Can you please share your current portpolio…

[yourraj]

My current holding are below alphabetically . But i humbly yet strongly advocate not to blindly copy anyone’s holding because the time of purchase and the companies situation at the time of purchase may be different than current scenario of the sector or of the company or the across at a whole .
It good not to stick to a particular style of investing as there are more variables in any economic condition thus eventfully give rise to constantly changing the dynamics of perception of the equity holders and the effect of multiple faceless participants may be some time beyond the understanding if one look through only ne lens . Every trade there are two people one is buyer other seller before investing one must wear the shoes of both .
Most of time i strongly advocate never take decision when you are too frightened or excited . Create watch list free watch list one can create at almost all the financial data website , and wait for the right time to make purchase . Do not spend full i mean if you are going to invest in Rs 10000 separate in to two or three bets and make incremental purchase once you are convinced about the integrity of the promotors and the company is expanding the earning organically .

BAsic purpose of equity market is to provide the entrepreneurs capital at almost no cost . but is the promotors is simply reporting or they are performing … The difference one can get by observing the business performance and the daily life style of the promotor . A CEO is not entitled to get a huge pay cheque unless until he has done something remarkably outstanding effort but a entrepneure must be well rewarded … But over the time stock market turned this in to a jungle of different beasts Bull bear fox rabbit stag and so on … …

Approximate weight and portfolio

[yourraj]

Portfolio change
Got 1 lot of allotment of sbi cards from IPO of 19 shares @755 – couldn’t resist to employe cash in Avenue supermart 1% , Pidilate 1% , Titan 1% HDFC LIFE 1% :

( Caution they are at very rich valuations but if suits to your risk appetite one may enter however good business bought at high prices may result in lower gains or capital may be locked in longer duration so be cautious with strict stop loss no mater how big or how great is the business once hit the stop loss just get rid of it )
Regards

[dprashant]

Buyers had jumped in to buy on Friday will it correct below Friday lows ?
That’s true for many others like hdfc amc , kotak etc

[yourraj]

The correction in the market was subdue after long bull runs . What I do I watch the first market movement and I found that had opened with a gap and so is other global indexes . This is the nature of the market and volatility is the inbuilt feature .if there is no volatility me and you would not be part of the investing ( some called it betting ). So Moving out at this point out of the market would not help much . if someone had moved out two weeks earlier he would be in position to buy some bargain good companies .
No one can predict how low it can settle but I am sure that it is near to the other end of the pendulum and it won’t stay there longer but when the market reach to the extreme I don’t know . But what I can do in this time if I had some cash in my hand I will either wait on the sidelines and sit tight or invested in the steady performer I phased manner .

if I invested 1000 than I will divide in 5 equal phases and if the bought stock ( Must be gr8 Companies such as Asian paints / Berger paints / Pidilite / Marico / ITC / Hdfc / Bajaj finance / Britannia etc) and if futhur the stock dive lets say 10 % add second phase to invested .However I feel one should only that amount which one is comfortable to remain invested for two to three years .

Shut off the market noise and don’t listen to experts … If the investment manger are too smart they should be buying the stocks rather than selling the advices and live life like parasites … Avoid any kind of TIPS or whats app messages … Because we are not playing the game but we are putting hard earned money in to asset class to offset the effect of inflation and to get a reasonable return on the risk premium (7 to 10 % is reasonable ) over the risk free rate ( 6.5%) and to cover transection charges (2%) so one should be happy if earning 7+6.5+2 i.e 15.5 % .

One should remind oneself WHY he is investing and what is the ultimate aim , which is to create the wealth and reduce the rubbing effect of portfolio churning again and again -which in long term have multifold effect in compounding - I still learning how to control the other man in my head …

This is time to introspect where you were wrong in making investment rational . The Covid-!9 moment will TOO pass AWAY and the stocks will be showing the flying colour but when I don’t know …

Added : Asian paints , Dmart and Pidilite equal to 0.5 % of total portfolio weight …

Regards

[yourraj]

Random Thoughts

Plenty of advises when the things goes wrong .We are living in in a county where you can find plenty of FREE Advices and EXPERT Opinions coupled with information bombarding from all side … one must need CAVACH ( armrour ) … and a good frame work for entry and exit provide such CAVCH …
Do I add value when I am casting any onion ? in a forum or to one to one session … We hardly think that way we just Vomit whatever so called GYAN we learn from the Western books or age old thought which still are valid but there are some Collieries should be made in order to customized global learning in indigenous way …
Hards fatcs ;

More than half of the Nifty constituent doesn’t earn a single dime in last coupe of years .

Richer are richer because they are paying to their self first and even covered their lavish lifestyle expenses through company accounts . There have different point there are taking out the money out of the business . being retail investor only thing which is in your control is the selection of the PRICE you are going to PAY for the minority so called PARTNERSHIP of any FIRM .

Last two years Price has move up and down and HDFC BANK is again back to Square One .It doesn’t says that the business has not earned money they earned the money they paid the wages .They paid the taxes So what the thing which is wrong ? It is the perception of the FDI or MF or other institutional Investors or HNI that had put the stock on side tracks ( because they are the real price mover )… So investment may take time to get mature If you are convinced about the business … You must mentally prepare yourself to wait just listen to song APNA TIME AYEGA …

S**t happens and this time too Sh*T Happened but this time the trigger is a Virus which lead to phenomenon of creation of point which is subjected to more gravity and pulling the things down. We forget the stick to the basic framework that one must get divorced from the stock unemotionally once hit the stop loss I had committed his mistake time and again and it will take some to master it …

I had penned downed a small story I am sharing below

Leather Apron …
Once a man was repairing his work apron which was made of heavy cotton and putting the Cotton patch on the burnt place where the sparks of the welding sparks stocked . Though the cloth of the apron was heavy but still some holes and burnt holes one can see from the distance. A child was passing by and he asked Uncle what are you doing? He said,” I am mending my apron it just burnt from the welding sparks “. So curiously kid asked again how come your hands are safe? He said,” I was wearing the leather gloves which eventually save my hand from the spark.” The boy replied so why are you putting cotton patch on cotton apron again won’t this burnet again? why you are not make a leather apron for yourself? “…

We as a retail investor burned again and again the cotton apron yet putting same cotton patch over and gain why we are not able to put the leather apron. i.e buying great companies when some this kind of carnage takes place
Happy investing

[atul1082]

Liked your write up.retsil investors suffer while promotor s and top management enjoy.chanda kochhar and Rana Kapoor, DHFL, Zee and many others are the examples.

[yourraj]

in addition to your examples not only Private companies but even govt is using hard earned money of honest tax payers in bailing out the Private firm .Recent example is , LIC and SBI are the largest PSU which hold most of the new pension deductions and retirement corpus and the tax saving schemes and the poor common man is thinking that he is investing in LIC policies thinking they are saving the income tax . The Bank is using public mob=ney to bail out the Private entity which was never worked out we have seen this in 2008 whne US govt try to backup the private entity But the Sh**t Happen and on top of that US were printing the money .
Any Govt can make money just with the click of the button by printing the money through the central banks but in long run this will create a bad economy

Portfolio change
: March is running and in order to offset the LT gain and ST gain I am selling of the following Old high cost Purchased Equitites
To offset Long Terms Tax gain : Today I sold Rain industries / Chaman Lal Setia & Kitex in small fraction and try to buy the same if the luck favours otherwise there are lots of other bargains available . I still hold above companies …
To offset Short Terms Tax gain :Today I Sold HEG / GRAPHITE / AVANTI / SRIPIPES / Bandhan Bank – All Touched the second threshold risk point 40% … so completely I chucked them out …

The companies are sold may have good long term prospects . why I sold . First the allocation of funds was small and even they were 40% down yet they have minimal efct on the portfolio as the weght of these are around 1% of portfolio Second my immediate aim is to avoid the incidence of income tax based n short term gain . Third . I will be able to retrieve the misallocated money because I may have not able to understand the unknown variable in the valuation of the equity which at this time played out and Mr market had punished me for the same … Fourth : I don’t want to be very cleaver and smart to stick in to the stock which I did in past and I hammered very hard and short term investment turned in to the long term investment

WHy I AM WRITING ABOVE … because if you are reading the simple sold or bought one must look out why the other fellow is selling … The company may be good or one just like me may not be able to understand the potential of the company in which he or she is invested .

one can visit MARCH END STRATEGY - TAX is coming SO be careful and make Decision

Wish you a safe health and investing

[Akshay_Lulla]

Dear sir, are you still invested in Dilip buildcon? Or if you’re tracking it. There has been a massive fall in the stock this can be due to the promoters or the recent selling of HAM projects. Can you lend your insights on the same and future growth prospects for the company?

[yourraj]

I am still invested in the company but not want to increase my holding as there are more great compounder companies have fallen as well or available at 52 week low ,so If I need to allocate new fund I will rather wait . The company is looking more lucarative in terms of valuation yet I prefer to sit at the sidelines in this time and would like to study my own mistakes and tune my own procedures .
Regards

[yourraj]

The additional investment is made today as I have got some spare money so made five parts and invested in Asian Paints , HDFC Bank , Pidilite , Titan , and in Bajaj Finance . This has been made to the increase the allocation in the Long Term Portfolio . The following are the scrips in my life long portfolio till some knee jerk moment happen .

• Asian Paints Ltd.
• Avenue Supermarts Ltd.
• Bajaj Finance Ltd.
• HDFC Bank Ltd.
• Marico Ltd.
• Pidilite Industries Ltd.
• Tata Consultancy Services…
• Titan Company Ltd.
  Disc: Please do your diligence before investing do not blindly copy the investing rational . This is not any recomendaion to buy sell or hold
  Regards

[yourraj]

portfolio change
exited Avenue Super Mart , TV18 Broadcast , hero MotoCorp and preserved 19% gain in order to allocated the same . I may be wrong but the COVID Scenario and also in most of the bear markets people gravitate more towards the safe compounders but I have opinion one must not ignore the micro and mi caps companies . We realise our mistakes to not to book profits , However after my exit TV18 zoom ahead but i don’t have any guilt to exit over the years if one is taking home 20%+ home that should not be too bad . Why i had made exit to offset the lost booked earlier in the year in order to allocated in steady compounders as good opportunities are available . i found a few interesting companies below on which i am working and zeroing down to one or two out of them …
Axtel industries ( major capital machines for FMCg Companies )
Heidelberg Cement India Ltd
transpeck ( multi chemistry chemicals catering to versatile industries )
Fermenta Biotech Ltd ( leader in vitamin D)
Essel propack ( leader in limited dental packaging tubes )
Thirumalai Chemicals ( capex already done and is
Ram ratan wires ( leader in making wires in the tyres )
Srikalhasti pipes ( low cost producer of DI pipes )
Shivalik bimetal ( shunt based resisters )

Disc;
This is not any recommendation to buy sell or hold any of the companies . I am not any sebi enlisted analyst

[nithin_Shenoy]

Thirumalai chemicals : The results are bad, am following this since 2019. Dahej plant has been completed, the capex is done. However looking at their inventory and capital work in progress - am comfortable to start looking at this after Dec 2020.

Results : https://www.bseindia.com/xml-data/corpfiling/AttachLive/64a935a1-4b54-41a8-9a73-b336ad93ac38.pdf

Any idea about the current order books & when will the new factory start its production?