While looking at companies quarterly performance, we have to know that there are certain companies involved in certain sectors where particular quarters are heavy and some are not so heavy. In companies like HBL where an element of defence orders is there and govt projects like railways are there, quarterly results can be often lumpy, so its better to look at them on a yearly basis. There are some sectors like construction, defence, etc where last quarter is often best quarter. Another example is of Kaveri seeds where q1 is the most important quarter.
- In a concentrated portfolio, there is not much space for errors and if an error is detected, it has to be dealt with as early as possible and in a decisive manner. Krishna and Divis are different business models. I usually am not too aggressive with companies with high percentage of revenues from govt side. The so called B2G businesses. Because according to me, these depend a lot on currying favours from those in office and hence orders may not be sticky. Plus payment may remain pending for long periods of time when it has to be collected from govt.
Even after all precautions, stocks often fall because of unexpected reasons and in these situations, the rough has to be taken with the smooth and it often makes sense to exit at earliest sign of trouble.
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