Havent posted a portfolio update in a while. There has not been much to update. Very few transactions done since the last update:
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Added Star Health: opportunistic buying to take advantage of the market fall. Wasnt unfortunately able to be even more aggressive. Below Rs500/share, or ~25x FY24 PE, this deserved to be a 10% weight.
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Reduced HOEC: I clearly underestimated the risk of having just one major block. The company’s own history shows how risky that can be. Reduced weight here to reflect the risks. As long as it is able to keep producing from Dirok and B-80, company will be a big beneficiary of high oil and gas prices.
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Exited Godrej Properties: Bad buy, and even worse hold at >2000. Did some more checks in the real estate industry and selection of projects and partnerships as well as execution track record leaves a lot to be desired here. While there was no capital loss, there was an opportunity cost loss here.
Dont have too many great opportunities at the moment. Re-looking at the MFI space. Seems to be at a cyclical low and the RBI regulation changes have improved the economics structurally and increased the TAM of the sector. Also doing work on the capital goods side: Ador Welding, Disa India, etc. DFM Foods also looks interesting at below Advent’s buy price.
Aside from that, I continue to believe the existing portfolio itself is quite well positioned. Banking and non lending financials continue to offer attractive opportunities to deploy capital.
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