Portfolio Disclosure August 2018

Portfolio as on August 14, 2018

The last portfolio update was from April 1, 2018. The previous one was from January 11, 2018. You can see the posts to see how the portfolio has evolved.

The period between April and August ranked as a very quiet period for the portfolio. In the backdrop of a market which saw a most significant drop in mid and small cap stocks, I have kept a steady mind and not added to my portfolio significantly. And I practically did not sell anything.

So even if stocks like Cummins and CanFin Homes don’t show up below, it is not because I have sold them, but it is because they have dropped significantly in price


Ticker%Holding%Gain
OBEROIRLTY9.92820109100.7389031
BAJAJFINSV6.477362098584.3156905
BALKRISIND4.827414464854.8102085
RELIANCE3.141373436145.4024903
NESCO2.99195037994.20803713
IDFC2.903468444-34.67711586
ECLERX2.7233901722.40189086
IDFCBANK2.646109761-15.16482853
PIIND2.55759000789.2116148
IBULHSGFIN2.351455379211.7275731
HINDPETRO2.313747893-6.682749521
BAJAJELEC2.226524619149.550775
DCMSHRIRAM2.216112597195.6455247
AARTIIND2.206118255295.4931729
INDHOTEL2.15943236558.86217483
MCDOWELL-N1.9862008193.622785379
AKZOINDIA1.91899612340.58223222
MUTHOOTFIN1.824528372-4.569865042
LT1.81937309112.31911761
BHARATFORG1.724144551251.7061113
TATAINVEST1.69913900750.33357316
OCCL1.655586215805.9310102
SPARC1.600213338159.6256163
GRINDWELL1.584730835293.9522669

Of my portfolio stocks, Oberoi Realty, IDFC twins, HPCL, DCM Shriram, KRBL, CanFin Homes underperformed the market significantly. On the other hand, Bajaj FinServ, Reliance, Balkrishna Tyres gave excellent returns during this period.

Portfolio Disclosure April 2018

Portfolio Dislosure April 2018

After the last portfolio disclosure in Jan 2018, there were quite a few changes to the portfolio, but only in the ones where the holding was small. There were really no core changes to the portfolio since the last disclosure:


Ticker%Holding%Gain
OBEROIRLTY10.62546011113.8797772
BAJAJFINSV4.730678304397.5568785
BALKRISIND3.88259142664.5134899
NESCO3.161791756104.3182081
HINDPETRO2.96784413419.16479847
PIIND2.886474972112.5913834
IDFC2.849247583-36.18255307
IDFCBANK2.825004433-9.832876109
ECLERX2.7386308337.732010409
DCMSHRIRAM2.50701572232.9641992
RELIANCE2.30075846178.93340345
IBULHSGFIN2.263550282198.7374152
BAJAJELEC2.258306071151.9853078
INDHOTEL2.24454951464.38836803
CANFINHOME2.1143087271056.600621
MCDOWELL-N1.9972582673.735481891
BHARATFORG1.957663073297.5622922
LT1.9115806317.48584183
AARTIIND1.882093914235.9019224
AKZOINDIA1.82380154251.84341855
MUTHOOTFIN1.818411293-5.313506663
IRB1.7159106467.8419657
OCCL1.63109147788.5515663
AJANTPHARM1.586038659157.8488374
SPARC1.576868608154.6983655
TATAINVEST1.57546252838.77017767
GRINDWELL1.575281193289.8586545
SHILPAMED1.557782875150.0245445
NMDC1.556485759-7.583080722
HMVL1.540433076.75067626
HINDZINC1.50401943361.28020634

The last portfolio update was at a time when the market was at an all time high. The portfolio has shrunk then, both as a result of market correction, as well as significant pruning of the portfolio. Among stocks that did well, I would include Bajaj Finserv and Bajaj Electricals. The IDFC twins and HPCL did poorly.

 

Portfolio Disclosure January 2018

Portfolio Disclosure as on Jan 11, 2018

Pls see below my portfolio (limited to those stocks which constitute at least 1.5% of the portfolio):

Ticker % of Portfolio %Gain
OBEROIRLTY 9.90 132.74
BAJAJFINSV 4.03 764.79
BALKRISIND 3.60 728.33
IDFCBANK 3.50 38.26
IDFC 3.28 -14.19
HINDPETRO 3.06 295.64
ECLERX 2.87 98.13
NESCO 2.84 114.28
DCMSHRIRAM 2.84 339.78
PIIND 2.78 138.99
SPARC 2.14 246.60
INDHOTEL 2.13 82.36
MCDOWELL-N 2.09 41.59
RELIANCE 2.01 124.17
IBULHSGFIN 1.92 196.66
OCCL 1.91 1117.00
BAJAJELEC 1.89 145.80
CANFINHOME 1.81 1100.05
SHILPAMED 1.79 526.03
KRBL 1.78 1200.07
NMDC 1.75 19.26
BHARATFORG 1.74 313.36
MUNJALSHOW 1.72 85.35
AKZOINDIA 1.69 64.44
CUMMINSIND 1.69 127.08
TATAINVEST 1.67 71.89
LT 1.65 75.55
IRB 1.63 86.47
HMVL 1.57 29.40

As before, for Canfin Homes, KRBL, Shilpa and Bajaj Finserv, the % gain is after including profits on sales carried out.

The only sales since the last portfolio disclosure have been in EClerx. This has primarily to do with the rise in the price due to Buyback announcement. I fully intend to purchase back the stock once the buyback record date is over.

There has been a sharp rise in the price of Oberoi Realty, IDFC Bank and IDFC. This accounts for the relative percentage increase. Similarly, there has been muted performance in Balkrishna Tyres. All of these are long term stocks, so the relative performance is not, per se, especially interesting.

Portfolio Composition as on March 31, 2017

Portfolio Holdings, March 31, 2017

The following stocks constitute at least 1% of my portfolio as on March 31, 2017. These 39 stocks amount to 81% of my total investment portfolio.

 

Porfolio Composition, March 2017
Holdings which constitute at least 1% of Investment Portfolio

Some discussion is warranted. The average age of my holdings is around 2 years, and as can be seen, there are very few stocks in the red. These include United Spirits (McDowell), ILFS Investment Managers (Which has given great dividends though), IDFC and IDFC Bank Combo (Which on the other hand is a looong term bet). NMDC has barely broken even. Even with NMDC, the dividends have been great.

Where have the best gains come from: Clearly Can Fin Homes, KRBL and Oriental Carbon have given the best percentage gains. I bought all of these when the markets were at a trough in September 2013. The largest absolute gain has come from Bajaj Finserv, which was again bought in the same period.

I am reasonably happy with the overall portfolio mix. It consists of realty (Oberoi and NESCO), MNC (Cummins, United Spirits, Akzo, Grindwell Norton), Pharma (Shilpa and Ajanta), NBFC (Bajaj Finserv, Canfin Homes, IndiaBulls Housing Finance), Banking (IDFC and IDFC Bank), Great Indian Mid to Small Cap Companies with an export focus (Balkrishna Tyres, Bharat Forge, PI, Aarti Industries, Polymedicure, Mayur, OCCL), and IT (Eclerx, MPS). There is considerable diversification. However, I am comfortable with the diversification.

Current (December 2014) Portfolio Picks



As mentioned in the previous post, I am no longer monitoring my portfolio picks for performance. However, the downside to this is that I do need to restrict my stock universe. I have brought down the number of stocks in my portfolio. I intend to keep bringing this down. Below is my current update and outlook on the eventual 40 odd stocks I intend to have in my long term portfolio:

Sector
Sector Stock Current Outlook Weightage in Portfolio
Finance 13%
IDFC Accumulate
ICICI Bank Sell on Rises
Indiabulls Housing Finance Accumulate
Diversified 2%
Reliance Accumulate
DCM Shriram Buy
Consumer Facing 6%
Akzo Nobel Hold
United Spirits Hold
Indian Hotels Hold
IT 6%
TCS Accumulate
EClerx Accumulate
MPS Hold
Pharma 5%
Shilpa Hold
Ajanta Hold
SPARC Accumulate
Investment Co 4%
EID Parry Accumulate
Bajaj Holdings Sell
Bajaj FinServ Accumulate
Tata Inv. Corp Hold
Oil and Gas 1.50%
HPCL Hold
Cap Goods 2.50%
L&T Accumulate
Infrastructure 3.50%
IRB Infra Accumulate
ITNL Accumulate
GPPL Accumulate
Financial Intermediary 2.50%
IVC Accumulate
Metals 4.50%
Sterlite Hold
Tata Steel Hold
NMDC Accumulate
Hindustan Zinc Accumulate
Engineering and BtoB 9%
Cummins Hold
Grindwell Norton Hold
Bharat Forge Hold
Mayur Uniquoters Hold
Polymedicure Hold
BKT Accumulate
Auto Ancilliaries 4%
Munjal Showa Hold
Banco Hold
AmaraRaja+Exide Hold
Agriculture and Agrochemicals 4%
PI Hold
Kaveri Sell
KRBL Hold
Real Estate 12.50%
Oberoi Realty Hold
Nesco Hold
Sobha Hold
Telecom
Idea Buy 1%
Total 81.00%

Of course, these 45 odd stocks constitute only 81% of my portfolio. Even these 45, I want to trim down to 25. Of the remaining 19%, the prominent ones I want to dispose off include: ITC, BASF Agrochemicals, Oriental Carbon, Selan,RS Software, CanFin Finance, Unichem Labs, Muthoot Capital, Shriram City Union Finance, PTC Finance, Kitex Garments, HUL, Gillete, Repro, National Peroxide, Mazda, Gandhi Special Tubes, Syndicate Bank, Carborandum Universal and Oriental Bank. I would do this right away, but the problem is that I am sitting on hefty capital gains on these, and I will wait for a year of holding to get rid of them. In some cases, I don’t like the stock well enough to buy, but I like it well enough to be reluctant to sell, unless I get a good price.

Pls. note: The above is simply a list of stocks I hold, and don’t intend to hold. This is a personal journal. It is neither a recommendation to buy/sell, nor is it an endorsement of any of the stocks being discussed. I am an amateur investor, with a patchy record, and my own peculiar risk profile. Please do your due diligence before you buy/sell any stock.

Portfolio Composition at the end of October 2014



Here is a new edition of my portfolio composition. The last two months have not been particularly kind to my portfolio performance, as can be seen in the next post. In fact, partly due to the fact that I was travelling, and partly due to procrastination due to my relative poor performance in September, I missed putting up my portfolio at the end of September.

But here I am, with my portfolio at the end of October 2014. As usual, this is not a complete disclosure of my portfolio. This list is only of those scripts which constitute more than 1% of my portfolio. Nevertheless, I am also disclosing in the text below if there were major changes in the rest of the portfolio.

Stock Latest Price Inv. Price Overall Gain % Portfolio %
IDFC (97) 148.25 133.3108609 11.21 10.55%
Oberoi Realty (64) 242.15 238.5116518 1.53 8.96%
eClerx Services (18) 1,347.80 1029.558952 30.91 2.82%
ILandFS (36) 20.2 15.32131761 31.84 2.39%
Larsen (22) 1,597.70 1096.596358 45.7 2.13%
Cummins (4) 720.05 411.2417355 75.09 2.12%
MPS (14) 712.4 128.6641026 453.69 2.12%
Indian Hotels (20) 104.8 73.70118644 42.2 1.88%
Selan Explore (28) 487.9 317.7249493 53.56 1.83%
IRB Infra (18) 254.5 90.26702128 181.94 1.82%
NMDC (28) 168.3 133.9162406 25.68 1.71%
Mayur Uniquoter (11) 430 111.0322327 287.27 1.67%
Balkrishna Ind (11) 756.3 232.4213927 225.4 1.61%
Kaveri Seed (13) 915.45 296.6391304 208.61 1.60%
HPCL (13) 522.15 470.71725 10.93 1.59%
Bharat Forge (9) 801.4 272.25 194.36 1.59%
Shilpa (11) 539.65 370.2180563 45.77 1.49%
Munjal Auto Ind (11) 117.45 33.99787765 245.46 1.43%
PTC India Fin (6) 50.1 14.68682894 241.12 1.36%
Oriental Carbon (9) 382.6 113.2114733 237.95 1.34%
Muthoot Cap (11) 253.2 97.38 160.01 1.33%
Ajanta Pharma (14) 1,887.60 1007.725543 87.31 1.32%
Sesa Sterlite (3) 253.05 150.9941003 67.59 1.31%
Sun Pharma Adv (19) 196.5 123.5597701 59.03 1.30%
EID Parry (13) 218.85 141.47 54.7 1.30%
Poly Medicure (7) 833.15 280.2228601 197.32 1.22%
PI Industries (11) 429.9 171.8891892 150.1 1.21%
Hind Zinc (18) 168.95 121.9935484 38.49 1.20%
RS Software (11) 630.9 204.2701613 208.86 1.19%
Grindwell Norto (7) 526.05 256.5177241 105.07 1.16%
TCS (9) 2,558.20 1953.9 30.93 1.13%
Reliance (7) 979.25 810.3029891 20.85 1.10%
Sobha Developer (14) 430.9 314.4363636 37.04 1.08%
Akzo Nobel (5) 1,299.05 1027.196154 26.47 1.03%
Tata Inv Corp (13) 556.5 404.9865 37.41 1.02%
ICICI Bank (9) 1,614.05 948.6365854 70.14 1.01%

The movement towards consolidation continues. However, this is also tempered by the fact that I have bought new scripts in the last two months. Nevertheless, the number of scripts which have at least a 1% contribution to my portfolio is 37 (compared with 33 at the beginning of September 2014), and together they constiture 71% of my portfolio. As before 32% of the portfolio was invested in the top 8 scripts.

What have I been buying in the last two months? And what did I sell?

Well, I continued to purchase IDFC, Oberoi Realty and IL&FS Investment Managers, averaging down as the stocks fell all of September, and most of October. It requires great guts or folly to keep buying in the face of negative outcomes from a stock price point of view, and sometime in November, I hope to have a post which will talk about these dilemnas.

I also purchased a significant quantity of L&T and TCS, again as they fell. In addition, I added a small quantity of Jaypee Infra, Sobha Developers and DLF, when they fell rather sharply because of a weak real estate environment and negative news flow.

In general, I have also resolved to improve the quality of my portfolio, from a cap goods, finance and realty bias to more quality names with better moats. To this end, I made significant purchases of Indian Hotels (Convertible Debentures) Akzo Nobel (which now is in the list of 1% stocks), United Spirits (which is almost there), and Dr Reddy’s Labs.

In terms of my older themes, I bought significant quantities of Reliance, Bayer CropScience, India Bulls Housing Finance, Gujarat Pipapav Port, and Vardhman Testiles.

What did I sell? Only RS Software at a time when the stock really shot up. At that price of 730 or so, the stock is more expensive than say EClerx, and EClerx has a superior track record of governance, disclosure, earnings, and dividends. I still own significant RS Software, and given my purchase price, I will evaluate my position only after a quarter or two.

Portfolio Composition and changes in August 2014



Here is the list of stocks which constitute 1% or more of my portfolio:

Stock Latest Price Inv. Price Overall Gain % % of Portfolio
Oberoi Realty (52) 255.15 239.2 6.68 9.59%
IDFC (77) 142.35 130.0 9.52 8.14%
eClerx Services (17) 1,345.00 1026.5 31.02 3.23%
ILandFS (31) 20.35 15.0 35.95 2.65%
Selan Explore (28) 562 317.7 76.88 2.45%
Cummins (4) 699.3 411.2 70.05 2.39%
IRB Infra (15) 257.3 81.3 216.29 2.09%
Larsen (16) 1,581.85 1024.8 54.36 2.04%
NMDC (27) 177.85 133.0 33.75 1.99%
Bharat Forge (9) 856.75 272.3 214.69 1.97%
Mayur Uniquoter (11) 434.25 111.0 291.1 1.95%
Kaveri Seed (13) 930 296.6 213.51 1.89%
MPS (14) 545.1 128.7 323.66 1.88%
Balkrishna Ind (11) 752.6 232.3 223.92 1.86%
Shilpa (11) 517 375.1 37.84 1.74%
Sesa Sterlite (3) 279 151.0 84.78 1.67%
RS Software (14) 539.6 206.5 161.29 1.56%
EID Parry (13) 220.6 141.5 55.93 1.52%
Sun Pharma Adv (18) 197.85 121.9 62.27 1.48%
PTC India Fin (6) 44.15 15.0 194.98 1.41%
Hind Zinc (18) 165.1 122.0 35.34 1.36%
Indian Hotels (13) 96.55 59.9 61.06 1.35%
PI Industries (10) 437.6 159.0 175.23 1.35%
Ajanta Pharma (14) 1,604.10 1007.7 59.18 1.30%
Grindwell Norto (7) 490 256.5 91.02 1.25%
Munjal Auto Ind (11) 84.7 34.0 149.17 1.20%
Tata Inv Corp (13) 561.45 405.0 38.63 1.19%
Oriental Carbon (9) 290 113.2 156.17 1.17%
ITC (21) 349.95 307.0 13.99 1.11%
NTPC (6) 141.3 130.2 8.51 1.07%
ICICI Bank (9) 1,548.75 933.8 65.85 1.05%
Sobha Developer (12) 465.5 288.6 61.28 1.03%
Banco Products (2) 142.1 56.2 153.02 1.00%

The stocks representing more than 1% of my portfolio now constitute 68% of my portfolio, and the number of stocks are 33. 32% of the portfolio is represented by the top 8 stocks. I fully intend to concentrate further, so that the top 8 stocks represent 50% of the portfolio.

However, the concentration of scripts has hurt me, since my top stocks, Oberoi Realty, IDFC, Selan Exploration, and IL&FS Investment Managers have significantly underperformed the market in the last couple of months. The only one amongst the top 5 which saw outperformance was eClerx Services. Other top stocks which underperformed included Mayur Uniquoter, IRB Infra, BKT and Sterlite and Shilpa.

The three stocks which saw major outperformance was my old favorite MPS Ltd., and Kaveri Seeds. NMDC and Larsen, while not majorly outperforming in the month, gave me the benefit of buying these stocks on dips in July.Old favorite Cummins continued to do well. Another stock that did well in August was SPARC. PTC India Financial Services and RS Software did remarkably well in August.

What new stocks did I buy? I bought some Exide and some Amara Raja, since both constitute a nice duopoly, I bought HPCL, because there is tremendous value embedded in the company, with or without GOI policy issues, I bought Kitex Garments on a ValuePickr recommendation, Mazda Ltd and Linc Pens on my own reading of the balance sheets and potential. I added to Indian Hotels on a dip after the result. I bought HIL on an India Nivesh Recommendation. Finally, I continued to buy IDFC on dips.

Portfolio Composition and Changes in July, 2014

Portfolio Composition, July 2014

 

Here is the list of stocks which comprise more than 1% of my portfolio at the end of July 2014.

Stock Latest Price Overall Gain % Percentage of Portfolio
Oberoi Realty (49) 251.9 5.34 10.23%
IDFC (71) 149 15.87 8.57%
eClerx Services (17) 1,284.95 25.17 3.40%
ILandFS (25) 24.85 75.91 3.16%
Selan Explore (28) 585 84.12 2.80%
IRB Infra (15) 249.1 206.21 2.23%
Mayur Uniquoter (11) 430 287.27 2.13%
Balkrishna Ind (11) 769.9 231.37 2.10%
NMDC (26) 169.8 28.28 2.06%
Larsen (14) 1,469.15 45.25 2.03%
Cummins (4) 606.9 49.22 1.93%
Shilpa (11) 514 37.04 1.91%
Sesa Sterlite (3) 282.5 87.09 1.86%
Bharat Forge (9) 722.25 165.29 1.83%
Kaveri Seed (13) 700.15 136.03 1.57%
Ajanta Pharma (14) 1,664.60 65.18 1.49%
EID Parry (13) 190.65 34.76 1.45%
Hind Zinc (17) 162 33.88 1.43%
Sun Pharma Adv (18) 168.2 37.95 1.39%
MPS (14) 348.05 170.51 1.32%
PI Industries (10) 383 140.88 1.30%
RS Software (14) 407 97.08 1.30%
Tata Inv Corp (13) 539.4 33.19 1.26%
Grindwell Norto (7) 420 63.73 1.18%
Indian Hotels (8) 94 75.65 1.18%
Munjal Auto Ind (11) 75.75 122.84 1.18%
NTPC (6) 140.45 7.86 1.17%
Oriental Carbon (9) 264 133.2 1.17%
PTC India Fin (6) 33.15 121.49 1.17%
ILandFS Trans (15) 228.7 70.18 1.17%
ITC (20) 349.6 14.84 1.16%
ICICI Bank (9) 1,474.00 57.85 1.10%
Muthoot Cap (10) 170 80.81 1.07%
Tata Steel (4) 549.9 100.66 1.07%
Sobha Developer (12) 438.8 52.03 1.07%
TCS (7) 2,515.10 42 1.03%
Banco Products (2) 129.5 130.58 1.01%
Reliance (6) 975.4 29 1.01%

What has changed? For one, I have spent all of July 2014, increasing my stake in Oberoi Realty and IDFC. This was as per my earlier stated intention. Now, both stocks comprise around 10% of my portfolio. This is essentially in keeping with my objective to concentrate my portfolio. Sometime this month, I will write about my investment rationale for both stocks.

I sold all of my Clariant Chemicals, simply because it had risen out of sync with possible valuations, and invested the proceeds in eClerx services. Increasing my exposure to eClerx was also my stated intention in earlier posts.

I also increased my exposure to NMDC and Tata Global Beverages, on a dip in prices of both. I increased my holding in Shilpa Medicare and PI Industries (PI following nice results). Finally, poor Larsen and Toubro results for the quarter resulted in sharp dip in prices, which I bought into.

I sold out of Morganite Crucible, more for the sake of not investing in stories without any technological or brand edge. Instead, I dipped my toes into Bayer CropScience, and on the MNC theme, increased my exposure to Grindwell Norton. Finally, there was some buying of PTC Indian Financial Services and IL&FS Investment Managers, both on a relative dip in market prices.

Concentration continues apace. The stocks which comprise at least 1% of my portfolio are now down to 38, and the total percentage of these in my portfolio is now more than 75%.

My eventual aim is to increase the concentration even further, with 25 scrips comprising around 90% of my portfolio.

What stocks gave the best performance in July, 2014 within my portfolio?

IDFC for sure, following the RBI announcement on CRR and SLR requirements on infrastructure loans. IRB Infra, following a decent result, and positive government announcements for the roads sector. IL&FS investment managers, despite becoming ex-dividend.

From the ValuePickr basket, Ajanta, PI, Mayur and Shilpa, all gave great returns in July.

Another great stock last month was Bharat Forge.

Portfolio Changes in May

In May, my largest purchase was Ajanta Pharma. Ajanta Pharma has been a favourite of the www.ValuePickr.com forum, because this was one stock which has had remarkable operational performance. I could never purchase Ajanta earlier, even though everyone at ValuePickr has it as one of their top picks. I used to think of it as expensive, so I gave it a miss, in favour of stocks like Avanti Feeds, Kaveri Seeds, PolyMedicure, Mayur Uniquoters, and VST Tillers, also from the ValuePickr stable. But the recent Pharma underperformance in the stock market, and Ajanta’s continued operational outperformance, meant that Ajanta again looked cheap, after its results in May, around a level of 1050. So now, this has the some decent weight in my portfolio. I expect gains to be muted, till Pharma becomes a market darling again. But it is in stocks which are not market darlings where bargains are to be found.

I also added more of RS Software, simply because there is great value in the stock. Currently, again, in line with the IT trend, it is not going anywhere. But I am patient. I also added some EClerx, because of a price drop. This is a company which I like very much, and I will keep adding, as the price keeps falling as the dollar keeps falling. I don’t think the market has even understood that EClerx performance this year will be unaffected by the dollar-rupee equation, since the entire revenue is hedged at higher dollar rates. It is next year, that performance will be adversely affected.

I also added some quantity of Akzo Nobel. I wish I had a chance to invest more, but the price ran up. Makers of Dulux paints, it will be a key beneficiary if the Auto and Housing sectors revive. I think this is a great company, and along with Clariant and Cummins, it will remain the core of my MNC portfolio.

I added some Munjal Showa, Muthoot Capital, Poddar Pigments and Kesar Terminals, all with dramatic gains after I purchased the stocks. All of them represent great value, and as the market runs out of value, I expect that all of them will see a dramatic PE rerating.
What about sells? I finally sold out of MCX, at a small profit. I still think it could potentially give a great return, but the uncertainties in terms of stake divestment and regulatory overhang are simply too high. Not worth it for a relatively risk averse investor, especially when the markets have some many other stocks going up.

I also sold out of Igarashi Motors, with a nearly 100% return. I still think this is a great company, but it is too export dependent, and performance will suffer with the dollar falling. I will return to it some other time.

I also sold some NTPC (bad call, it rose sharply after I sold), and BKT and Cummins. I sold small portions of my total holdings in all 3. NTPC, because in this market, it is not worth holding on to an annuity stock. I intend to get rid of it completely. BKT, because of dollar rupee concerns for a pure exporter, and Cummins-well, selling Cummins was a mistake. The only saving grace is that I sold a small portion of my portfolio holding.

I also sold JB Chemicals (invested in Ajanta instead) and Alkyl Amines Chemicals. Alkyl Amines Chemicals will suffer due to alcohol prices going up in this year. I also sold Balaji Amines because of the same reason. I also sold GMM Pfaudler, because I did not like certain related party transactions they carried out. Maybe it was a mistake to sell.

Portfolio Composition, May 2014

As promised, the top stocks in my portfolio, at the beginning of the month. I have already published this for two prior months, and here is the portfolio as on May 02, 2014.

Notable additions during the month have been an increased exposure to IDFC. After a fairly stellar run in the middle of April due to the announcement of the new bank license, IDFC has been weak. I have taken advantage of this weakness to buy more. For me, IDFC represents an investment for 5 years, at least. Hopefully, over that period, it will become a multibagger. Right now, it is weak because a) It lends mostly to Infrastructure, and infrastructure has been a dog. People are afraid of NPA’s and rightfully so. But IDFC seems to have managed its NPA situation really well, even in a difficult environment. b) There is fear that the short term costs of IDFC transiting to a bank (increased SLR, CRR requirements, and increased expenses on opening branches) may put a lid on profitability and c) Uncertainty over the path to convert to a bank, and the likely FII dilution as a result.

For me, all of these are short term things, and ignores a) the phenomenal performance of IDFC NBFC relative to PSU banks in terms of NPA’s  b) the excellent performance of IDFC PE Fund, IDFC AMC and other subsidiaries. and c) the increased long term profitability resulting from an ability to get CASA deposits.

My largest purchase is the month has been another AMC, IL & FS Investment Managers. I really like the Fund Management business. Once you get a fund going, you have a fixed income for several years, and in addition, you might just get additional income from Carry. IL & FS has a great track record, gives excellent dividends, and I think this will continue, especially if the Indian Investment Climate improves.

Another stock which has underperformed in the last month in Oberoi Realty. While all realty stocks have done poorly, Oberoi has done badly too. I expect the May 10 results to be poor (probably the last set of poor results), and if so, I will buy into the price dip.

This month, I also bought Clariant Chemicals, adding to my earlier position. I think that my initial purchase of Clariant was sound (around 580 levels). I am not sure my current purchases are sound. I will put up a detailed note on Clariant once the March results are out. However, I am holding on, since I expect a dividend of 350 to 400 Rs., and I could use the tax free income, and subsequent stripping loss.

This month, I added to RS Software and Munjal Showa, though the positions are still too modest to show up here. I will keep adding to these positions.

Stock Latest Price Inv. Price Overall Gain % % of Portfolio
Selan Explore 497.6 315.5 57.71 3.9
Cummins 524.45 404.1 29.78 3.7
IDFC 110.55 107.3 2.99 3.6
Balkrishna Ind 528.3 231.2 128.48 3.0
Larsen 1,263.55 949.9 33.01 2.5
ILandFS 13.7 13.6 0.64 2.5
Kaveri Seed 656.35 296.6 121.26 2.4
Oberoi Realty 208.05 177.6 17.14 2.4
Mayur Uniquoter 288.6 111.0 159.92 2.3
Sun Pharma Adv 170.45 121.9 39.8 2.3
Clariant 705 615.9 14.47 2.3
NMDC 152.2 121.7 25.11 2.3
MPS 363.75 123.4 194.85 2.2
NTPC 114.45 131.6 -13.02 2.1
Sesa Sterlite 180.55 151.0 19.57 2.0
Hind Zinc 126.1 121.0 4.21 1.8
Tata Inv Corp 477.1 405.0 17.81 1.8
Jaypee Infra 24.85 18.6 33.48 1.7
EID Parry 152.35 139.7 9.09 1.7
ITC 340.25 301.0 13.05 1.7
IRB Infra 115.8 81.3 42.35 1.7
Bharat Forge 406 272.3 49.13 1.7
eClerx Services 1,239.80 757.3 63.71 1.6
Reliance 928.1 756.1 22.74 1.6
ICICI Bank 1,252.40 933.8 34.12 1.5
Sobha Developer 377.3 288.6 30.72 1.5
TCS 2,208.45 1771.2 24.69 1.5
Indian Hotels 70.95 53.3 33.2 1.4
Poly Medicure 481.25 278.4 72.89 1.4
Bajaj Electric 287.75 209.8 37.13 1.4
Munjal Auto Ind 52.95 34.0 55.77 1.4
PI Industries 249.65 144.6 72.61 1.3