A quarterly update for my India portfolio
Few stocks in my India portfolio have again started moving after 1.5 years of hiatus. Though Revenue/Earning for these companies were growing at above average rate but markets were ignoring these stocks due to abundance of other growth opportunities in the India market. Now being a long term investor I am naturally averse to chasing growth in unfamiliar sectors like PSU/Capital goods etc. and that is too after ditching long term winners (specially those who are going through temporary slowdown/time correction) in my portfolio. I define stock investment winners which consistently grow revenue and cash flow at above average rate year over year irrespective of market conditions.
Investors like me (who hate selling winners) have two choices in such a scenario, 1) buy more into weakness or 2) just hold tight with the original position hoping that market will shower its blessing at an appropriate time. With strictly following these approaches I have more or less settled with the below portfolio with a 7 year CAGR outperforming indices big time.
Stock Allocation Holding Period Comment
Granules India 13% 7 Yrs Bought when the Pharma sector as a whole crashed due to US FDA inspection – which resulted in severe observation and temporary closure of facilities. Somehow held onto it as it was generating above average earnings even in such adverse conditions. Price did not move for couple of years after buying the stock, bulk of the return came in last 1.5 years
Trent 12% 1 Yr As I wrote earlier sold Polycab with 5X return and bought Trent with the entire proceeding. I could have bought it earlier had I known Star Bazaar was part of the Trent franchise. I can clearly observe the crowd pulling capability of Star Bazaar and its nearest competitor from my Balcony:)
Pidilite 10% 8 Yrs Again did not think twice about buying this company after knowing that Fevicol was part of this Franchise. I heard about and used their product while constructing my own home, This is truly a forever stock for me.
Bajaj Finance 8% 4 Yrs Exceptional management with a track record of generating mega multibaggers. I bought this stock just before Pandemic, bought more when it fell more than 50% during pandemic, again bought more during recent underperformance. This is a clear winner in the Indian consumer lending space and I have enough confidence that it will remain so in the foreseeable future. Will be surprised if it does not hit the $500BN market cap in the next 10 years as Visa, which commands a similar market cap in the US market as of now. This is another forever stock for me and bet on exceptional management.
TCS 8.5% 8 Yrs Being a techie this was a no brainer to me . In fact , I was personally involved in deciding to use tech services from TCS for my employer on a few occasions. This is another forever stock for my portfolio.
Zomato 6.5% 2 yrs Bought Paytm and Zomato from a raft of new age stock listings as I am the heavy user of these two apps and I see value it adds to my daily life. Paytm did not work as it’s unable to figure out how to monetize their services, Zomato has become a big hit. Started averaging as soon as it started hinting about making profit. I would like to hold this stock as long as the food aggregator market remains a duopoly business. Also this business model seems to be working all over the world (China/US/India etc…)
Ethos 6% 2 yrs It came out with an IPO a couple of years back. Somewhere I read that Indian Men like to collect and flaunt luxury watches as women do it with Jewellery:) So need to see if it could do the wonder with the Luxury watch business as Titan is doing with the Jewellery business. Till now the story plays out as I was hoping for.
PI industries 5% 6 yrs I need to admit that I don’t have a full grasp of its business model yet, but I am holding it as it delivers above average earnings year after year.
Mold-Tek Pack 5.5% 3 Yrs It’s already a multibagger from my initial buy price, right now I am averaging it as I believe this will come back to life as consumption increases in the Indian economy. Also it has moats as its products/trade secrets are protected by several patents.
Asian Paint 3.5% 4 yrs East or West Asian Paint is the best:) tomorrow if I have to paint my house then I will blindly choose Asian Paint, It’s the true leader in its segment. I keep on averaging this one. It should come to life as and when global crude price falls and consumption goes up. This also belongs to the forever stock bucket.
Varun Beverage 3% 2 yrs Duopoly in its segment, bought when it was going through temporary slow down. Will hold this stock forever.
Vaibhav Global 3% 6 yrs Again It’s a vertically integrated Jewellery product company which operates mainly in western world. Bought it when it wes going through slowdown due to severe competition in its segment. made 10X from this stock post pandemic recovery, Sold a few shares 1 year back. it’s again going through a temporary slowdown, I keep on averaging it. In my opinion these sort of the stocks are prime candidate for “buy into weakness” and hold it for long term
Titan 3% 2 yrs Bought during temporary slow down post pandemic. I intend to hold it forever:)
Kajaria Ceramic 3% 5 yrs if I have to lay tiles on my floor then I will choose Kajaria Ceramic any time among the desi brands. This is the leader in its segment. This is also a forever stock for me.
Bajaj Finserv 2% 4 Yrs Bought Bajaj twins together, managed by same group, it’s also a forever stock for me
Indiamart Intermesh 2% 3 yrs Management is great, huge multi year tailwind is visible, reporting above average earning growth year after year, but stock does not move. Granules India stock used to behave like this 3-4 yrs back. This is another prime “buy the dip” candidate for me, so I keep on buying it.
Jubilant Foodworks 2% 4 yrs DPZ (Dominos Pizza) is a big hit in the US market, I am sure the same story will repeat in the India market as well . Moreover, my family likes this Pizza a lot. I will hold this stock forever.
Mas Financial 1% 2 yrs I must say I don’t understand what’s wrong with this stock as it does not move even after reporting excellent numbers in each quarter. As I am not much familiar with this business so I refrain from adding more into weakness.
Route 1% 1 Yr Twilio of India, I intend to increase allocation in due course
CCL Products 1% 1 Yr Typical compounder, increased allocation gradually when it was an underperforming market in recent months. Will hold it forever.
APL Apollo 1% 3 yrs Again dunno much about this business, seems to have moat around pipe business, heard about and used their product while constructing my own home, will keep allocation intact.
I am fully aware that we are in a raging bull market in India from the year 2020. It’s the very time when the rising tide is lifting all boats. It won’t take much time to take today’s winner down to tomorrow’s loser when the bear strikes. I had a somewhat similar experience in the US market during the 2022 bear market. But I also know good companies recover fast and make up the losses (and more) as the market recovers.
As evident, few of my portfolio stocks have time-tested and came out as big winners on the other side. I have got a few multibaggers stocks holding (and adding into weakness) with a “no matter what” attitude and will continue to do so in the foreseeable future irrespective of market conditions.
My portfolio is proof that long term investment (disciplined buy and hold) works in the India market as well. One can buy/keep on averaging widely familiar/known companies (within a circle of competence) at a reasonable price or price range (specially when they are going through temporary slowdown). After that all it requires just three qualities to generate life changing wealth, patience, patience and lots of patience:).
Of course there are many strategies to make money from the market but this one seems to be the most boring and laziest strategy out there in the market. Only drawback with this approach is that one has to be ready to get hit with a minimum 50% paper loss when the market goes crazy. On top of that sometimes price may not recover as moats get diluted permanently due to competition (this can be mitigated by operating within a circle of competence). That’s why it’s said that investment is simple but not easy:) It’s worked for me both in the US and India market since the last 7-8 years without fail. Will stick to this strategy as long as it works.
Disc. This is not a buy/sell recommendation. Biased as invested in all stocks discussed above. Not a SEBI registered advisor.
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