Update – Jun’24
Nifty is still positive, but its performance has lagged in four out of the last five years. All other indexes have given returns of more than 25% in most recent years
Looking at some other data :
If we consider the top 500 companies, Nifty’s contribution to PAT is 56.49%, but its share in market capitalization is 47.86%. The midcap segment looks stretched, followed by the small cap segment.
From the perspective of PE, midcap and small cap are again higher compared to their historical PE. If we consider the median PE, it is 53.6 for midcap and next 50, whereas it is 44.6 for small cap.
Now looking PE with growth
Growth has been better in recent times, leading to higher PE ratios. However, Nifty has mirrored the return of growth. Therefore, Nifty offers better prospects compared to other indexes when considering both growth and valuation.
Allocation :
Category | Percentage |
---|---|
Stock | 21% |
Equity MF | 12% |
Debt MF | 42% |
FD | 6% |
Gold | 3% |
Cash | 4% |
Other | 13% |
I wanted to go a bit defensive, so I am almost out of Next 50, Mid and Small cap.
I sold all mutual funds except Nifty 50 and PPFAS Flexi Cap, and for now, I’ve parked the money in a debt fund
Equity Portfolio:
Invested Price | Current Price | Allocation | ||
---|---|---|---|---|
1 | NSE:ITC | 240 | 434 | 16% |
2 | NSE:HDFCLIFE | 567 | 607 | 13% |
3 | NSE:ICICIGI | 1,243 | 1,860 | 16% |
4 | NSE:HDFCAMC | 2,082 | 4,221 | 12% |
5 | NSE:KOTAKBANK | 1,757 | 1,845 | 10% |
6 | NSE:MUTHOOTFIN | 1,017 | 1,803 | 4% |
7 | NSE:SUNDARMFIN | 2,336 | 4,587 | 4% |
8 | NSE:NAM-INDIA | 273 | 661 | 4% |
9 | NSE:CDSL | 1,026 | 2,319 | 4% |
10 | NSE:JYOTHYLAB | 231 | 472 | 3% |
11 | NSE:GLS | 699 | 911 | 3% |
12 | NSE:CMSINFO | 398 | 521 | 3% |
13 | NSE:HCLTECH | 1,385 | 1,517 | 6% |
14 | NSE:BIKAJI | 552 | 708 | 2% |
15 | NSE:BECTORFOOD | 1,281 | 1,432 | 2% |
Average up in core portfolio where some stocks corrected during election result day.
Added:
Glenmark life science :
Business : High ROE and ROCE business
Growth : Decent growth of 14% in the last 3 years
Valuation : ~8k market cap and 15 PE with 3.5% div yield
Balance Sheet : No debt and 2.4K reserves
Holding : Promoters holding ~82%, with individual shareholders decreasing over the years
CMS Info :
Growing topline ~15% and bottom line ~29%
Decent margin of more than 25%
Very good management, growing in different areas and focusing on service
Trading at a reasonable valuation of 17PE, 6k Mcap, growing steadily. Lower valuation due to concern around the cash management business as cash in the economy is reducing
Hangover of promotor sale is over, now owned completely by institutions, showing strength in the market and not correcting much.
HCL Tech:
Short to Medium term bet.
Usually, when a stock reaches ~3.5-4% div yield, It offers reasonable safety and decent returns.
Bikaji :
Added as part of core portfolio, with plans to add more going forward.
Plan to add FMCG, IT to the portfolio as it is heavily tilted towards financials.
Preference for packaged food is increasing, and Bikaji has a good portfolio expanding into various categories.
Like the management as they are targeting slow and steady growth, with possibilities to enter into QSR space like Haldiram.
At more than 50 PE, it looks a bit expensive. But added at 7 times to sales. Given the long runway, I am okay to pay more and will add in small tranches.
Mrs bector:
Almost similar thesis as Bikaji
Exit:
Amara Raja : Booked profit in Amara Raja, technically it is poised very well. But honestly, I don’t understand the business in detail. I have no idea whether it will win in the battery wars. I added because of safety when the price was around 600.
I needed to raise some cash, so I sold it as I want to hold businesses where I have confidence and better understanding of the business.
Did some transaction in between but kept on profit booking and added it into core portfolio.
Mistake :
Exited from some stocks too early such as Cochin Shipyard, Rites, REC etc. Those were bets keeping in mind of margin of safety and Div yield. Booked profit after ~2x but I had no clue back then how crazy things could go. Again , I don’t have too much regret of it as those were the short/medium terms bet as replacement of FD.
What worked:
Even after booking profits here and there, I managed to stay in the market and build a core portfolio.
Plan for next half of the year:
After COVID, all we have observed is that buying ignored stocks will eventually lead to gains. We have not seen any sizable correction. Many promoters are selling out, the quality of IPOs coming to market is questionable, and relatives are calling me saying they are investing in power/manufacturing funds. These are a few things that keep me cautious for now
I would like to invest more in stocks/MF to the existing portfolio, but as I said earlier, I will add Mid/small cap when there is a broader correction in the market. Untill then, the plan is to be in Large cap and Debt fund. And keep taking small bets in between.
At the end thank you so much everyone for all your guidance and support.
@harsh.beria93 @basumallick @hitesh2710 @Donald @ranvir @hardik_shah1 @Investor_No_1 love hearing your thoughts on this forum.
and special thanks to @ayushmit for screener, being focused more on quantitative side, getting all these data through screener is just awesome.
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