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.