Manohar’s Portfolio

Posting my portfolio updates after a long gap. @praveen_potnuru thanks for asking about posting the portfolio. that indeed challenged the procrastinating cells in my body.

The allocation here sums around 75%. There remaining 25% is the “kachara” which I need to sort out. Either roll it to one of the stocks mentioned above or replace the stock in this list with the better stock in that 25%.

At the beginning of 2024, I felt the need to orient the portfolio to those sectors where there is a good visibility for growth and valuations are not very high/run up during 2023 have not been terribly disproportionate to the current/near team earnings. Keeping that in considering – I am targeting for 40-50% allocation to pharma followed by 15% to real estate. Strong cycle shift is quite visible in real estate.

I will try to post monthly updates. I think that will be a good inspiration to bring my house in better order.

Rationale behind each of the stocks that I have in portfolio as mentioned above.

1. Neuland – Big Market Size in CDMO space, Proven execution by competent and honest management in complex business. There is at least three years run way despite FY 2025 will have moderate growth as per management. I expect Neuland to be at the minimum a decent compounder at 25-30% for next three years.

2. Caplin Point – Consistent growth in the past many years. Sound strategy to penetrate in the US market. Sizeable capex done over last 18 months or so will bear fruits in coming couple of years.

3. Time technoplast – The change in management and their strategy to pay off the debt and focus on value added products. Q3’24 results further strengthen the belief that Time can show better performance in next years.

4. Krsnaa Diagnostics – Big TAM. Company bas been able to execute on Govt contracts. I feel they have a huge runway with optionality to eat market share from other established B2C companies e.g. Dr. Lal path etc.

5. Sunteck Reality – The reality demand high cycle play with disproportionate cash flow expected in coming times.

6. Stride Pharma – Turnaround story well lead by the CEO. Walking the talk. Decent guidance.Demerging the CDMO arm to unlock more value

7. Va Tech Wabag – Good sector. Hydrogen based infrastructure to open additional opportunity. Large TAM. Management focus on keeping the asset light model and learnings from previous years about receivables. The current management want to position Wabag as a technology company.

8. Balu Forge – Expansion in defence. Good guidance for Q4. Management looking to maintain margins. Capex happening across sectors to provide tailwinds.

9. Ugro Capital – Growing NBFC with focus on MSME. Will benefit with high growth happening across manufacturing. Good management, Leverage technology.

10. PDS Ltd – Platform for sourcing the textile mercendise. Hugh growth opportunity. Unique approach to manage the business. Moat in terms of having relations with existing retailers in the US and EU. US will particularly be driver for growth in next few yeras.

11. Jindal saw – Oil sector making big investments. Good order book for next 6 months. Confident management.

12. 3B Blackbio – HIgh growth company with innovative approach

13. Mrs. Bector – Expanding the reach to maximum points of sales via improved supply chain. Good management. Big addressable market.

14. Laurus Labs – Big investment in creating the capabilities. Getting ready for the strong growth with number of optionality’s. Want to at least double the allocation to this stock

15. Eris Lifescience – Good portfolio of branded products in domestic market. Ability to improve margins of the acquisitions. Management seems capable of integrating and streamlining the acquired businesses well.

16. GPIL – Huge capacity expansion being lined up for iron ore. Having the long term lease for mines going to work as a moat. Good management

17. Inflame – EMS of appliances. Strong growth ahead. Good management.

18. Glenmark Life science – Decent valuation given the good growth outlook. To double CDMO in three years.

19. Sandhar Technologies – Operating leverage is expected to play out in next couple of years. Opportunity to rerate.

Apart from the above, have smaller positions, tracking position or trading position in – Reality (Ajmera reality, Kolte Patil), Pharma (Supriya Lifescience, Jubilant Pharmova, Suven LifeScience, RPG Lifescience), Hospitality and discretionary spend (Samhi Hotel, Rategain, Senco, Carysil, Globus Spirit, AGI, Som Disti.), Metals(Prakash, NMDC), Others(WPIL, Craftsman, SKM Eggs, Technoelectric, Balaji Amines, Archean Chem)

Will appreciate any inputs/feedback. There is tremendous to learn from different folks on valuepickr. Thanks a lot!