Hello All, I invested in the following stock, I want to hold these stocks for the long term. Views are invited on my current portfolio.
1. Ltfoods - Bought in 2020 at 29rs /2023 at 123rs /2024 at 271rs
Thesis -
- Basmati rice can be produced in few states only(punj/hary states) which should be distributed through out the world
- Basmati rice category itself is growing around 12% CAGR.
- At COVID time, the necessity item is food, I know the demand for rice will shoot up in india after covid unlocking & Ltfoods results are good at that moment.
- Ltfoods has consistent margins through out the 3 years period.
- I was averaging the stock based on the cash reserves of the company.
Antithesis:
- Based on monsoons & cyclical stock.
- if there is a slowdown in US/EU will impact the company.
- Non-basmati rice segment is not growing. 80% of revenue is dependent on basmati rice segment.
- Logistics cost will impact the revenues.
- Valuation is expensive now.
2. Radico Khaitan - Super product with excellent management: bought in 2020 at 400rs
Thesis:
- Best company is the liquor segment with focus on premiumization & selling the lMFL liquor in different parts of world.
- Abhishek khaitan who has a good idea on premium liquors and turnaround the company from loss making to market leader.
- Last year completed major capex for backward integration. Premium liquors(> 3k rs each bottle) are sold in india.
Antithesis:
- Liquor drinking is treated as bad habit in india
- Valuations are too expensive
- Already well tracked business, any earning surprises could re-rate/de-rate.
3. Affle India: High growth sector - Recently bought at 1306rs
Thesis:
- Mobile usage in emerging countries which will increase the revenue of this company.
- Company guidance is met in the previous quarter.
- High growth company.
- Mergers and acquisitions are yielding the results after 1 year.
Antithesis:
- Valuations are expensive
- Already well tracked business, any earning surprises could re-rate/de-rate.
- Any decisions from google on cookies could impact the company.
4. E2E Networks - Bought at 289rs - 2023
Thesis:
- Cloud based company which is helping SME companies, who cannot afford Amazon/Google cloud.
- When SME companies are growing E2E will also grow.
- Management has in depth knowledge about cloud business & tie-up with NVIDIA.
- Doing capex to increase the capacity.
- Recurring revenues from the business are growing rapidly.
Antithesis:
- Valuations are too expensive.
- Correction from the current levels is unavoidable.
- if amazon/google cloud packages are changed then this could impact the company.
5. Birlasoft: bought when KPIT & Birlasoft are splitted - 143rs in 2020 & 624rs in 2023
Thesis:
- Birlasoft has emerging technologies like Cloud, BFSI & healthcare segments.
- Lot of changes in the client management
- Orderbook is good.
- US is coming out from the recession.
- Angan Guha is frank & vocal about the company issues.
Antithesis:
- Depends mainly on USA and dollar conversions
- Healthcare business is volatile.
- Delay is some of projects which are not materialized.
6. United Spirits - Bought at 682rs in 2021
Thesis:
- Liquor Business leader available at cheap valuations.
- In con calls, turnaround was visible concentrating on cleaning up the low margin business.
- Hina Nagarajan has handled very well, now focusing on premium liquor business.
Antithesis:
- Liquor drinking is treated as bad habit in the country and some states liquor banning will impact the company
- Taxes on the liquor will change from state to state.
- Due to raw material prices, logistics - operating margins are contracting.
7. Varun Bevarages: bought at 882 rs in 2023
Thesis:
- Distributor for pepsi products.
- Rapid Expansion through out the india.
- High margins business
- Hot countries like india & africa need beverages, demand is over lasting.
Anithesis:
- Valuation is too expensive
- Consistent growth, well known business, missing expectation could derate the stock
- In Africa, they got distribution but in india they are not getting the snacks business.
8. PDS: bought at 539rs in april 2024
Thesis:
- Supplying cloths to brands from western countries and completing the product in emerging countries like Bangladesh, srilanka & india on huge scale.
- Guidance is to go 1000 cr revenue
- Managers(20+ Exp) are having separate units, they are distributed all over the world to help in scaling the business.
Antithesis:
- Slowdown in USA
- Bangladesh clashes
- Missed the target in previous quarters.
- Capex heavy business model.
9. NMDC Steel: bought with NMDC, average price is 50rs
Thesis:
- NMDC steel has a high end steel factor with latest technology.
- NMDC Steel has trading around the book value.
- Breakeven will happen by end of this year & production is only at half the capacity.
- Privatization rumours, JSW wants to acquire it.
- Iron ore raw material is coming from NMDC.
Antithesis:
- Cannot rely on privatization rumours.
- Debt should not increase in the books, before the full production.
- There is lot of delay to run in full capacity.
10.IEX: bought at 148rs in 2021
Thesis:
- Electricity consumption is growing rapidly in india.
- IEX has running all the energy exchange platforms (Gas exchange/Renewables/carbon)
- IEX has vast experience in the electricity segment.
Antithesis:
- Government electricity policy could change scenario
- Government does not like monopoly in any segment.
- Changing Climate environment, will impact iex business.
11. Rainbow Children: bought at 822rs in 2023
Thesis:
- Concentrating Niche hospital.
- Especially on children we are ready to spend any amount without the second thought.
- They charge good amount but the treatment in Rainbow has good feedback.
- Best speciality hospital attrack best doctors in country.
Antithesis:
- Valuation are too expensive.
- To convert Capex to revenue will take long time in hospital sector.
- Hospital revenues are depend upon the hospital reputation in the specific region.
- Greenfield capex will take more time atleast 3 to 5 years.
12. Vaibhav Global:bought at 360 in 2024
Thesis:
- Good management
- Manufacturing in emerging countries and selling in western countries.
- investing in TV ads/ott platforms
- Going for acquisitions and changing to different products.
Antithesis:
- Slowdown in USA & EU
- Breakeven in EU is not happening from few years due to slowdown
- Earnings are weak, targeting only aged men/women.
13. GHCL bought at 511 rs in 2024
Thesis:
- Sodaash prices were at rock bottom prices.
- Company had planned capex 4000 crores(Greenfield sodaash plant) which is equal to market cap of the company
- switching to high margin business like Bromine project.
Antithesis:
- Dependency on sodaash prices.
- If Capex is delayed, cashflows will be impacted.
14. IOL chemicals : bought at 290rs in 2021
Thesis:
- In COVID time, Ibuprofin they have large capacity
- IOL chemicals has having 2 divisions: Chemicals & pharma business
- They migrating from pure API business to pharma business
- Recently company got approval from Brazil & China for exports.
Antithesis:
- Low margin & cyclical business
- Ibuprofin prices fluctation will impact the company.
- Clear vision is missing in the company.
- Company results are not great.
15. Talbros Auto: bought at 309rs in 2024
Thesis:
- Management is bullish and meeting the guidance as per the concall
- Talbros auto components are famous.
- OEM companies are forming JV with talbros.
Antithesis:
- Valuations are expensive.
16. Shankara Building: bought at 652 in 2024
Thesis:
- Company is in building retail segment which is popular in western countries.
- Its easy for any customer to get all the building products at one place.
- They are concentrating on few places with big ware houses.
- Split with steel low margin business by next financial year.
Antithesis:
- Receivables are increasing.
- Paying interest expenses and cash flow is not appropriate.
- Previously company was in bankruptcy, still the practices are not improved.
- Not clear guidance from the company, realestate slowdown will impact the company
17. Butterfly Appliances: bought at 873 in 2024
Thesis:
- Change in management to Crompton Greeves.
- Scaling the business is easy due to distribution availability.
- Recently new product is listed(Air frier)
Antithesis:
- No new steps from the new management.
- There are no aggressive step from the managements.
- No surprises in earnings.
18. Aarti surfactants: bought at 688rs in 2024
Thesis:
- Splitted from Aarti industries, good management should be in place.
- Valuation is cheap with low marketcap.
- Turn around expected in the chemical companies.
- Asset light business model.
Antithesis:
- No earning surprise.
- Need to track the chemicals, volatility in margins.
19. Tata Technologies: bought at 1048rs in 2024
Thesis:
- TATA management should be clean
- parent company will takecare of any bad debts
- In emerging technology, Software defined vehicle, Cloud business & Aerospace.
Antithesis:
- Valuation are expensive
- No change in earnings.
20. EID Parry: bought at 785rs in 2024
Thesis:
- Cholamandalam company, management should be good.
- High cash flow business.
- Going into high margin business.
Antithesis:
- Need to keen look at execution
- Sugar is a cyclical industry.
- Impacted due to ethanol slow down
21. Suyog Telematics: bought at 1697rs in 2024
Thesis:
- Recurring revenues from the existing towers with 10 to 15 year contracts
- ROI is early known before investing, spending only if the customer needs the tower.
- High experience in the business
Antithesis:
- Company with low funds
- Don’t have enough funds to establish new towers going for debt/rights issue.
- Indus tower is acquired by airtel with 50% stake.
22. Arrow Greentech: bought at 866rs in 2024
Thesis:
- BIO plast company with dissolavable soultion
- Earning surprise in recent quarter
- Experience management.
- New projects are signed, asset light model
Antithesis:
- Valuation are expensive.
- Earning surprise could derate the stock
23. HDFC Bank: bought at 1669rs in 2024
Thesis:
- Consistent compounder for a decade.
- Good managements
- Available at cheap valuations
Antithesis:
- HDFC & Hdfc bank merging issues
- RBI Regulation compliance issues.
- FII inflows are missing.
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