Ronak’s Portfolio – building it slowly

Update on Portfolio:

Midcap is outperforming the market and doing well since last 4 years.

Through Mutual fund I am heavily invested in large caps and my portfolio is heavily tilted towards Large cap as well. So I am planning to shift my portfolio towards Mid and Small cap, though individual stocks seen correction but still not comfortable to add those in portfolio.

Portfolio Weightage:

Increased weightage in equity through direct investment and increasing SIPs in mutual fund as I have parked my short term required money into Debt MF for now.

Going forward I’ll add all the incremental money into equity and will add more in case of any correction.

MF Portfolio:

No change in MF portfolio and the distribution is large cap 60%, Mid cap 20% & Small cap 20%.

Equity Portfolio:

No major change in core portfolio.

The idea is to hold ~15 stocks from finance, Insurance, AMC, QSR, IT and FMCG space as I am more comfortable holding B2C businesses and these stocks have a long runaway which gives me enough time to accumulate on monthly basis.

And then hold 7-8 stocks from Mid-Small cap which are steady in nature and preferable have Mcap from 7k-25K.

New position Added:

CDSL – ~10k Mcap company, duopoly, performance is linked to market but over long term market will go higher, can be steady performance if we add the market performance and potential dividend over years.
In terms of risk, regulatory risk is there

TTKPrestige – ~10k Mcap company, strong promotor with high % of holdings, consistent in terms of margin and ROCE over years. Leader in the segment and constantly come up with new products. Growth is a bit on lower side and competition is tough but can be safe bet in terms of generating steady return over long term

NAM-India – Betting on finance theme and this is an addition with my HDFC AMC holdings. It’s more of a bucket approach here. ~12k Mcap at the time of entry, very high margin business, long runaway, Nippon as promotor with high holding so float will be very low (~181K retail holders only). And very high dividend paying, so again on same theme some increase in earning and dividend, expecting steady decent return over long term. In terms of risk, competition is very high and regulatory changes in terms of TER.

Jyothy Lab – ~8k Mcap firm, liked the way they have build their brands. Lot of D2C brands coming in but they are facing issues in terms of scale. Jyothy has built it slowly and growth in all categories except HI is very good. Strong balance sheet, consistent in terms of margin and ROCE. Removed pledge shares. Available at reasonable valuations.
Risk: white label brands from large retailers, operating in categories where people usually buy cheap options. Penetration of these products are high. Involvement of many family members in the business which can be problematic in long term.

RBA – ~5k Mcap, betting on QSR theme, good brand recall and available at <$1Bn Mcap, though still a loss making but it is part of bucket approach for QSR theme along with Devyani

Apcotex – ~2.5k Mcap , very good promotor, steady growth and consistent on various parameters. Going through problem from business prospective so accumulating slowly during this time

Bajaj Finserv – Part of Finance theme. Getting NBFC, Insurance, AMC (in future), strong management, although it’s a holding company so discount will be there all the time and not expecting super returns from this. Added few when price went below 1300

Exited:

Cochin Shipyard,Gail,IOC,Rites,GSPL,Ajanta Pharma – booked profit in all these counters and some others in between. Reason is I don’t have strong understanding about these businesses and added all those based on valuation and dividend capabilities earlier. Some of these looked strong on charts but as part of restructuring I want to get out of the opportunity bets and want to increase stake of my core portfolio

ICICI Bank – I have enough finance related stocks, so just concentrating on existing one and booked profit in ICICI.

In watchlist:

Want to add few more stocks from IT and FMCG such as LTIM, Tata consumer but not comfortable with valuation at the moment.

In Mid/Small cap : Shaily engineering, Carysil, HIL, Apollo Pipes, Indigo paint, Latentview, Aavas, V-Guard

Still the allocation is not where I want to but as I stated earlier, building it slowly over long term. I will keep adding in above names whenever there will be any opportunity or in the counters where valuations are getting lower than their historical averages. And will sell Cartrade, REC and few other names to concentrate more into few stocks.