Simrat Portfolio

By deep dive if you mean depth of analysis that I do for each company, then my answer would be that
I am only interested in knowing the moving parts or key variables for a company. I read concalls and ARs to know these and rarely get some insights from network of people on scuttlebutt side.

For example, if I have invested in Saregama, I am tracking if there is any hit to industry structure or not, if they are doing accretive capital allocation. If I am researching about a pharma/chemical name, I am not interested in deep diving to know molecule name and its uses, side effects etc. I am interested to know what kind of competition exists for that molecule and company’s competitive advantage to sell that product. Usually such things come out in numbers over a period of time. If I am buying domestic consumption story, I want to know volume growth and market size. In IT, I take more of a valuation-growth rate call because in my sense lot of work that IT companies do is similar. That is why I bought Mastek in 2020 because a small cap would give better returns in an up-cycle.

Hence, I need to know key variables which will make or break things –

1. Domestic Consumption – Volume Growth and Runway
2. IT – Valuation vs Growth
3. Pharma, Chemicals – Capex, future margins and accompanying operating leverage

On selling, I have been a reluctant seller all through out. But I sell when –
1. Anti-thesis starts taking over
I usually try to think of broad range that a business would operate in from good to bad. So my selling reasons are mostly when too bad happens in a company i.e. when anti-thesis plays out. For example, Neuland and Sequent both went completely south due to reasons related to inflation, inability to scale, currency changes etc.
2. Find a better opportunity
When there is better risk reward available in some company vs what I have and my sectoral diversification/preference isn’t getting affected I will switch.

I have not sold on valuations so far –

1. LTTS went to 50-60 PE and did not sell.
2. Deepak Nitrite was peak margin peak valuation at 2900 should have been sold.
3. Mold Tek Packaging is 3x for me and now at 40+ PE but I have only trimmed my position.