Daljeet Kohli has conducted a review of the stocks in his Model Portfolio. The performance is quite impressive. The ‘aggressive’ portfolio has surged ahead with an awesome return of 53.5%. It is followed by the ‘conservative’ portfolio with 46.1% return and the ‘balanced’ portfolio with 44.5%. All three have comfortably beaten the benchmark return of 30.7% by a wide margin.
Daljeet has recommended an addition to the balanced portfolio in the form of the blue chip behemoth Infosys. He has given a detailed explanation of his rationale but the bottom-line is (i) the valuations at 12 times FY16E EPS is very attractive. Historically, whenever, Infosys has breached that level, it has always surged back; (ii) the outlook for the InfoTech industry is positive in the light of growth in the developed markets and (iii) there is a continuous expansion in the margins.
The best part is that Daljeet has foreseen a target price of Rs. 3,952 for Infosys (FY 16.4x FY16 EPS) which means a whopping 32% gain from the CMP of Rs. 2,979.
Personally, I see merit in Daljeet Kohli’s advice. In the last three months, the stock has lost 20% over concerns relating to the exodus of its top brass and the strengthening of the rupee. However, there is no doubting Infosys’ pedigree as a blue chip powerhouse stock. The problems that it is facing presently look temporary in nature. Such problem situations are an opportunity for long-term investors to load up on the stock. Also, the valuations (14.7xFY15E) are at a level from where one can say that the downside is limited. Further, Infosys is the kind of stock where one can put large sums of money without having to look over one’s shoulder for lurking dangers. So, I am quite tempted to add the stock to my portfolio.
I see the merit but a majority of others and hoards of analysts are jumping out like rats out of sinking ship. Question is – do you get the bang for the buck? Agreed, that Infy might recover but if it is going to run 30 odd percent, HCL and TCS might run 10% more. BTW, I wish Daljeet is right since I am struck in Infy and my cost is 3250 and that too after the usual averaging nonsense that continues to happen for me (The old maxim- All I had to do to stop a rally in a stock is to buy it..the day I bought it at 3400, it started sliding about 3-4 months ago. Till then, the Narayanmurthy return swansong was going on !! It has repeated in 10s of stocks, even in Namo rally and hence I am not surprised. One of these days, I am going to test this in Aurobindo and bang guys, you will see the stock sliding from there….Bajaj Elec, Alembic, Supreme, Infy…the saga continues)
While I am not one to question Daljeet’s calls, I’ll have to think a lot before I think of buying Infosys. It’s not the Infosys of old, for starters, and it has largely failed to create good patent products of it’s own, despite having tremendous reserves. I remember the days when Infy used to give bonuses regularly, but that was a long time back. Also, the Rupee is holding on to these levels only because of RBI intervention, what’s going to happen to Infy once it appreciates is anybody’s guess.
Felt happy to be out of Infy today at marginally positive sum. The last 2 days, the cyclicals reversed and I made use of it to book a small profit but investing is not about these nonsensical trades of mine. I get it that one has to hold for long to reap the rewards. I did this because of my lack of conviction about Infy. That said, I might be wrong – I am placing my bets in Thinksoft (also a Daljeet reco), HCL
I too feel TM & Thinksoft offer high growth rates at low valuations.Though its tempting to jump in,in a ‘beaten down large cap’…I won’t venture into Infy.It may rise 20-25% in 1 year.But that’s just about it,growth will stay low & I don’t see any merit in being adventurous.
Sir ,
The links for june portfolio of india nivesh not working .Kindly restore .Thanks .