Another great write up on Dolat Algotech.

Felt like listening to an IT company’s concall rather than an energy exchange.
Only if their earnings calls were as good as these analyst day calls.

https://www.youtube.com/embed/npHDHAQ__DI

Disc: Invested in last 7 days.

Portfolio Composition:

Wanted to share some views on my portfolio, without going into specific details

1. I own a very diversified Portfolio - More than 100+ companies in my portfolio. However the top 10 of these will contribute ~40% of my portfolio. My portfolio diversification today is resulting from my experimentation on different styles and opportunities ( Recently technicals, small caps, IPO’s, Buybacks, Advisory services, Smallcases etc). Also I view these large positions as optionality which allows me to move in/out quickly. Over time as I crystallize my style and become more discerning I believe the numbers will come down but may not be less than 40-50 stocks.
2. I have generally reduced large-caps significantly over the last 6 months - Earlier I kept more large-caps to get stability in the portfolio but now I believe that with actively following markets and some research and understanding, I can possibly get better returns from Midcap/Smallcaps. Still own some largecaps which are trending. However Smallcaps (MCAP less than 5000 Cr) will be a significant part of the portfolio.
3. Generally I don’t like companies which have significant debt. I have lost money earlier and now I am reasonably scared of high debt companies
4. I look at my company shortlist from various lists - ATH, yearly H/L, Breakouts, News reports, Analyst mentions, Corporate announcements, MF portfolios, Friends advise etc. Basically I try to look at all companies people mention to have a view and then if I like it, I can move ahead.
5. Without specifically preparing, I have today a Core portfolio where I dont do much activity unless there is significant change in conditions. Then I have a large Satellite portfolio where lot of experimentations are happening. The whole idea is to build some idea in the mind of what works and what does not. The tenet for the secondary portfolio is to “Fail fast” and “Make more Money on Winners and Lose less money on Losers”

At this point lot experimentations are happening and hopefully I will have more clarity and possible investment style in 12-18 months.

Thanks

Nikhil

Got it, thank you. GPIL seems to be at an advantage when compared to NMDC (not sure of other peers).

@Investor_No_1

If you look at the valuations history of these consumer durables companies, they have historically been expensive. So chances of re rating are not there. Whatever investors make in these kind of companies comes through earnings. And that’s where the main problem lies with these companies.

Besides in case of AC, regrigerators etc, the market leaders are not the listed players. If I have to choose an AC for my home it would have to be Mitsubishi, or Daikin, or something similar. And the economy market has been captured by Samsung and LG. Even refrigerators are dominated by a lot of non listed players. And listed players like Blue star, and Voltas are also saddled by other businesses like the projects business.

And looking at the margins being allover the place over the years in these kind of names, I doubt if they really have significant pricing power. In such a scenario, I feel there are other better businesses to look at rather than get stuck in these names.

A lot of these names show charts that seem to be indicating poor structures. Johnson Hitachi corrected from highs of around 3500 to 1400 currently. Voltas also looks to have broken down below 1150. While these stocks may at some point of time make a comeback, now does not seem to be the time to be parked here.