Please Review and Suggest on my Portfolio

Guys....I am investing in share market for long term and have build this portfolio in the last 8-10 months. Please review and suggest if there is any changes that needs to be made and why. The main reason I am seeking your inputs is due to the recent dip in my portfolio earnings.

My portfolio return was @ 23% and during last 2 weeks it has come down to 15%. I am not worried and I will be back on track, but I read somewhere that if you have a well diversified portfolio then you will not see a huge dip in your PF when the entire market is bleeding.

Hence I am requesting all your valuable feedback.

How and why did I shortlist these stocks?
I short list stocks based on below ratios.. and I know few of my stocks don't fit this category. But I have invested in them either because of the recommendations about their turnaround story or just because I trust some of the guys who recommended them (I know it is a wrong strategy to just go by recommendations and you need to do the research on your own).
ROCE > 20
ROE > 20
Profit Growth > 25
Sales Growth > 25
Div % > 15
PE > 25
Debt to Eqty <= 0.5


Below is my portfolio ( I have also included the ratios along with my investment price and % of allocation in PF).

Stock Inv. Price Overall Gain % PF %
Mindtree 582.45 108.63 6.21%
Axis Bank 399.27 32.13 10.64%
GRUH Finance 202.27 18.68 8.99%
Coral Labs 271.71 17.22 2.41%
Ajanta Pharma 1180.02 13.05 7.34%
Kajaria Ceramic 678.56 12.21 3.62%
TCS 2271.8 9.91 10.09%
SMS Pharma 494.75 8.74 4.40%
Motherson Sumi 439.47 6.32 3.91%
Havells India 268.29 3.82 7.15%
Infosys 1975 1.08 1.76%
Somany Ceramics 406.55 0.14 2.17%
Granules India 92.78 -2.89 1.24%
Premier Explo 252.14 -6.28 3.36%
Bharat Forge 1288.99 -6.47 2.29%
La Opala RG 434.63 -7.55 3.09%
Kitex Garments 796.16 -7.91 4.24%
Tech Mahindra 658.98 -11.42 7.03%
Samkrg Pistons 191.43 -15.69 4.25%
Atul Auto 654.06 -19.04 5.81%

I am planning to increase stake in couple of the above stocks and Planning to invest in the below ones.

MCX, CRISIL, Sun Pharma, Lupin, Asian Paints, Kansai Nerolac, Cera, HDFC, L&T.

 

@ Meenakshi, Thank you reviewing and providing feedback.

"However, what is the reason for specifying a P/E greater than 25 as a criteria? Would it not have been better if you had specified a P/E of less than 25?

I always in a dilemma whether should I go for a high PE stock or a low PE one. Why is a stock quoting a high PE? Because it is showing good earnings and the market is willing to pay more. And why is a stock quoting low PE? Because at this point it is not showing
great growth and market is not willing to pay more.

We always but stocks on assumptions (though we do a lot of calculations and project its earnings). So we avoid buying a high PE stocks assuming that the market is already paying high and may not continue to pay the same price in future. And we buy low PE stocks assuming today the market is paying low and it may will pay more tomorrow.

Do we really know if a low PE stock is going to quote high tomorrow or vise versa?

This is the main reason why PF has a mix of both high PE and Low PE stocks. I am yet to decide which one should I stick too? Any suggestions are most welcome and appreciated.

"If one has to do a bit of nit-picking, it would be to ask why there are three large-cap Info-tech stocks in the portfolio. I suppose they will collectively perform in tandem with each other over the long run"

The reason why I have 3 is because I am in IT industry and I understand the business better and Yes, I will consolidate and move to some mid caps (RS Software or KPIT).

"Some of these are large-caps, quoting at reasonably high valuations. Can we expect much out-performance from them as compared to their smaller peers? For instance, instead of CRISIL, is CARE better? Likewise, instead of Sun Pharma or Lupin or Asian Paints, are mid-caps like Ajanta or Granules a better bargain, especially if you are looking for investing for at least 10 years?"

In pharma space I already hold Anjanta and Granules. So was looking to buy one of the large caps. I would like to have one or two lagecaps in each sector and couple of midcaps.

Asian Paints? Again a sector leader, but I am also interested in Kansai Nerolac. Lets see how it goes.

I dont have a lot of captial to invest. I make a list of stocks and keep it ready, when I get my salary I buy these stocks which ever is quoting at a decent price at that time. This is one of the main reasons, I have missed a lot of stocks when it was quoting low

Any views or suggestions is really appreciated.

 

For Pharma ... I would suggest any of the below:

a. SUN Pharma @ 870-900
b. Glenmark
c. Aurobindo - might correct post result
d. Dr Reddy

DRL and SUN - Recent acquisitions need to be closely watched

Paint Industry : Asian Paints have been a great wealth creator ... Kansai is very good ... Azco Nobel would be my pick ... Valuation wise alongwith a very good Dividend Yield ... Debt free ... Good profit growth but has a low growth

Now ... in IT ... I already have HCL ... if I am looking for an investment in IT Sector ... what would be your pick ... KPIT is very slow moving .... i thought 140 would be decent entry point ...what's your take? And what are your thoughts on Polaris?

 

Persistent Systems should also be considered. PPFAS Mutual Fund has invested in that recently.