Could you please provide your opinion about this stock portfolio conversion?

Shreenath A · Sep 1, 2020

Hi,

I am Shreenath from Bangalore. My portfolio is as follows

1. Tata Motors - 300 shares bought @ 338 rs
2. BEPL - 800 shares bought @ 150 rs
3. FCL(Fineotex chemicals) - 300 shares bought at 80 rs
4. Olectra Greentech - 300 shares bought at 165 rs
5. Jain Irrigation - 70 shares bought @ 70 Rs

I am currently looking to do the following conversion as on Sept 1 2020.

1. Convert all my 300 Tata Motors(trading at approx. 142) shares to M&M Finance(trading @ 130) or Aditya Birla Fashions(trading @ 135). If these 2 scrips are not good, could you please suggest 2 other Scrips and what prices to buy at.

2. Convert half of my bepl shares(trading at 58 Rs) to L&T Finance(trad @ 65Rs). Otherwise, could u suggest 2 other scrips and what price to buy at

3. Convert all my Fcl(fineotex chemicals) shares(trading @ 30Rs) to Mangalore refineries and Petrochemicals(trad @ 31.5 rs). If not, please suggest 2 other scrips and what price to buy at

4. Convert half of my Olectra Greentech shares(trading @ 67rs) to ONGC(trad @ 79 rs). if not, please suggest 2 other scrips and what price to buy at

I am looking at 1 year time span ie Sept/Oct 2021. I want to minimize the losses I have incurred and exit the stock market. Could you please provide your opinion.

regards,
Shreenath

Michael Gonsalves · Sep 6, 2020

Tata Motors is on a rebound after it announced that it will become debt-free in the next three years. The promoters, Tata Sons, have also shown confidence by buying shares from the open market. The brands owned by Tata Motors, such as JLR, are iconic. So, you may consider holding the stock and adding more on dips.

As regards M&M Finance and other NBFC stocks, it may be prudent to wait for the outcome of Covid-19, the impact of the moratorium, etc. It is possible that there may be nasty surprises in the form of NPAs etc.

L&T Finance may also be in problem because it has given heavy loans to real estate developers such as SuperTech. It is not known what percentage, if any, will be written off as NPAs.

Aditya Birla Fashion is a good stock from a reputed promoter. One can buy on dips.

As regards the other stocks, it appears that the new theme that will play out over the next few years is the migration of APIs and specialty chemicals from China to India.

Stocks like Balaji Amines, Granules, Alkyl Amines, Deepak Nitrite etc may prosper in the migration.

I suggest that you may create a basket of 10 such stocks.

Michael Gonsalves · Sep 6, 2020

According to the views of Saurabh Mukherjea:

"The third sector is the whole play around APIs, chemical intermediates. There is a lot of private equity money heading towards that sector now. And if the tensions with China continue, India will have to bring a lot of API manufacturing from China to India. We are almost entirely dependent on China for our API and that is not sustainable from any perspective and therefore I think we are heading into a multi-year boom on API manufacturing and the entire ecosystem which feeds into API manufacturing."

https://economictimes.indiatimes.co...ti-year-strong-rally/articleshow/77906253.cms

Shreenath A · Sep 6, 2020

Hi Michael, Thanks a lot for the answer and for sharing your analysis and views. That helps a lot. Will get back to you in case of any other queries

regards,
Shreenath

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