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!

ABB is a technology leader in electrification and automation, enabling a more sustainable and resource-efficient future. The company’s solutions connect engineering know-how and software to optimize how things are manufactured, moved, powered and operated.

Some of my assumptions are

1. Auto ancillary capex will remain high for next year as we are seeing a lot of supply chain shifts out of China, plus the demand in Indian markets are picking up drastically.

2. EMS capex will also remain high ( we import 5% of global EMS production and manufacture only 3% )

3. Infra / railways already have the tailwind

4. Renewables and datacenter capex is going on as usual. Renewables apparently take 7-8 times more electrical components compared to coal /gas based plants

I think ABB is best suited to benefit from some of the tailwinds ( but I am not able to gauge the upside. Chart was strong during the sell off days in march 2024 ). Their presence is across the segment and is winning orders in the datacenter, railways and electronics automation space. The float is also very low.

The 4 main verticals of the industry.

as per management 50% of the new orders are from the high growth segments, Moderate growth segments have lumpy orders and Low growth segments if order comes can be very large as they belong to heavy capex industry.
ABB benefits from India’s large shift to renewables which is probably a decadal tailwind.

Their revenue comes from projects, services and products, product orders are executed within 6 to 9 months and project orders can get executed anywhere between 12-18 months. As the execution of large orderbooks go, the demand for services might increase as a % of the overall revenue. Also exports as a % might also pick up as ABB India becomes more competitive vs global peers and the demand for grid rewiring / renewables pick up across the globe. However these will take anywhere between 3-5 years in my view.

This is one of my most favorite slide form their presentation where they show their products in high growth sunshine sectors such as datacenters and EMS manufacturing companies. We will see them get significant orders from these industries soon.

I think this slide shows their Order book and the backlog, expecting that orders too keep coming for FY 25 , as it takes them 12-18 months to execute their projects and 6-9 months to execute their products., I see their revenue almost doubling by FY25-26. A second optionality may occur if large orders come from the low growth but high capex intensive businesses like cements / mining etc. we will see a substantial jump.

Disclaimer – No holding in the stock, studying it.

Yes. pretty much same portfolio still current holding is as below. havent sold even single share in last 5 years and I keep adding stocks whichever I feel are out of focus. XIRR is 17% so not entirely bad with low volatility and some dividends

AVENUE SUPERMARTS LTD DMART 22-Mar-2024 20.50
ITC LIMITED 22-Mar-2024 12.45
RELIANCE INDUSTRIES 22-Mar-2024 11.30
INDIAN RAIL CAT AND TOUR IRCTC 22-Mar-2024 8.71
HDFC LIFE INSURANCE COM LTD 22-Mar-2024 7.59
MAHANAGAR GAS LIMITED 22-Mar-2024 6.39
TITAN COMPANY LIMITED 22-Mar-2024 6.10
NESTLE INDIA LIMITED 22-Mar-2024 5.08
BAJAJ FINANCE LIMITED 22-Mar-2024 4.67
HDFC BANK LIMITED 22-Mar-2024 2.85
PIDILITE INDUSTRIES LTD 22-Mar-2024 3.89
SBI CARDS AND PAYMENT SERV LTD 22-Mar-2024 2.80
JUBILANT FOODWORKS LIMITED 22-Mar-2024 2.23
ASIAN PAINTS INDIA LTD 22-Mar-2024 2.06
RELAXO FOOTWEARS LIMITED 22-Mar-2024 1.91
JIO FINANCIAL SERVICES LIMITED 22-Mar-2024 1.47
Total 100%