Ishaan’s Longterm Portfolio

It’s been quite a while that I updated my portfolio. After the interesting Q1, I am very satisfied with all the companies in my portfolio. There are some who have had a muted quarter but we all know the reasons for such a muted results.

1. Starting with ICICI Bank and HDFC Bank, both gave amazing results, not only Q-o-Q but also Y-o-Y. There PAT might be lower than last quarter but that was mainly due to unexpected growth in debt returns which forced the banks to buy more bonds which is mandatory for all the banks. Since the buying of bonds directly affects the Profitability, but this might be one time effect since bond rates have started to stabilize. I expect banks to post consistent growth for next 2-3 quarters, owing to rising interest rates, robust lending growth and resilient consumer sentiment.

2. HDFC LIFE posted muted results. Although their premium growth and NBM has been really strong and one of the best in the industry, their PAT failed to surprise me. I may be wrong but I believe that is mainly because of the kind of markets we saw for last 6 months. These insurance companies have been supporting markets for a long time which affects their profit. Now that FIIs have returned, we can see some profit booking by domestic institutions. Apart from the not so sure theory, I believe the industry is growing and is showing no signs of slowdown. I expect consistent returns of 10-15% for this year.

3. Bharti Airtel showed lower PAT but there were many positives like highest RPU of 183, growing subscribers, strong B2B business and new headwinds like 5G auctions and reduction in debt. I believe we might see some short-term pressure given the recent auctions but the ARPUs and Revenue is strong and might show impressive growth not only for next few quarters but next 2 years seem to be very happening for this Airtel.

4. Now all the FMCG companies( HUL, TATA CONS, MARICO, GALAXY SURF), in their interviews and concalls had said inflation biting into volume growth but price hikes have led to a healthy 10-15% growth in PAT. With inflation coming to down, we can see volumes picking up and it is very unlikely that the companies will reduce the prices of their products, which in turn will drive the topline as well as bottomline for the next 2 quarters. I have bought these companies at very low levels, so if there are some sudden negatives in future quarters I won’t be alarmed at all.

5. IT firms ( WIPRO and KPIT TECH), as expected posted muted results, although KPIT announced better results than what the market was expecting. The pressures were mainly related to attrition, slowing western economies and lower growth in new projects. This is a very short term trend. We might see some underperformance or consolidation in large cap IT, while KPIT has been very strong and can outperform its peers. They posted highest ever profits and revenue in the last quarter, baring the concerns the market had from IT firms, they seem to be unaffected by the headwinds.

6. M&M and Olectra Greentech surprised me with their deliveries of vehicles, new bookings and launches. We all saw the successful Scorpio launch and now the figure have crossed 1.5lakh in total. Mahindra has received more than 18000cr worth of bookings. Once the deliveries start, we can see good realizations in terms of profit. Their new EV platform launch and announcement were well received by the market. The stock price has not failed to surprise. Given the new bookings and positivity around the stock, I am happy to hold this stock for next 2-3 quarters. Olectra’s results showed growth on the back of higher deliveries of buses and the management in their concall mentioned about increasing their production capacity to meet demand and deliver more than 1800 buses in the next 12-18 months.

7. Both KEI and VGUARD showed a dip in their cables business because of higher inventory cost and slightly lower topline growth. This is might be a one time effect, with slowing inflation and the demand for EHV and HV cables being steady we can see better results in the following quarters. Vguard’s performance was muted because of shrinking margins and lower than expected revenue growth. The prospects for both the companies are really good, and their stock prices have shown the same.

8. IEX was affected due to price capping by Central Government and also faced some heat due to HPX launch. The management however is positive about the future and their IGX has turned next positive and can be another growth engine in next few years. Last few months the volumes on these exchanges were low since the price per unit was very high. We can see some moderation in coming quarters. Tata Power also posted good results, with PAT growing consistently.

9. Angelone as expected showed slower subscriber addition growth and lower equity volumes. This was expected but their FnO and Commodity segment continued to grow steadily. We can see some consolidation for the next few months, but given the rally we saw last month, things might turn positive for the Angel.

10. SBI Cards posted amazing results. Their fee income, market share in online payments and total credit card increased at a steady rate. With consumer sentiment stronger in India and the onset of festival season, credit card spends can go even higher. Given the current scenario, next 2 quarters can be really positive for the firm.