PORTFOLIO UPDATE!!
WIPRO
I know in one of my recent posts, I said I would hold Wipro for coming quarters but after some deep analysis, I found some disheartening facts about Wipro. Nothing bad about the company. It is reasonably valued and a good buy at this price but it does not suit my investment goals in the long term.
Wipro is 2.5 lakh crore market cap company. It has a diversified business but their growth has been somewhat unimpressive. After the CEO changed, investors including me felt really positive about the company’s future. Their recent acquisition made this belief even stronger but the numbers do not add up the way they should. With Sales and Profit growth CAGR of just 8%, this would not give me my expected returns. Growing at 8%, we won’t see a lot of price growth or PE expansion. Also since it is such a huge and mature company, the chances of it giving multi bagger returns is very less.
That’s why I have decided to sell all my shares of Wipro and will be Invest in KEI Industries and Deepak Nitrite after their Q2 results. I am tracking both these stocks very carefully and would take any good opportunity of adding these stocks. Some reasons to choose these stocks are-
1] Deepak Nitrite is a 30000cr marketcap company. With sales growth of 30% and profit growth of >50% and current valuations at mere 30pe give a good opportunity to buy. The only thing to look out for is their margins. If in Q2 their margins contract, any growth in topline would be redundant. But still, the chances of this stocks doubling is more than that of Wipro.
2] For Kei Industries, a 13000cr marketcap company, their future looks strong given a strong demand for high voltage cables and also housing cables. With increasing focus on Renewable Energy and widening the transimission infrastructure in our country, KEI, Polycab,etc are bound to benefit. Also the chances of this stock doubling are much higher than any other stock in my portfolio. It has already given 40% return in the last 10 months. It touched the high of 1600 few weeks back. This kind of outperformance will only continue if their quarterly numbers are consistent.
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