Stock Portfolio Review-Open Journal

11 min readFeb 11, 2023

I’ve been investing our family’s wealth by investing in public markets.

At a particular period, I review our portfolio. In the past, all my comments and remarks have been at multiple places. Through this blog, I’ll review my thesis, add comments & update the record of my position in one place. Over time, this blog may become very long with multiple stocks & multiple commentary points but I think I’ll solve that problem when it arises.

For public viewers, I’ll briefly highlight my investing philosophy:

Return expectations > 20% per annum compounded annually
Time horizon, Long term 3+ yrs
Replicate top investors to avoid the risk of misgovernance & fraud [Most imp]. I follow Marcellus, Nalanda Capital, Mohnish Pabrai, WestBridge Capital, SOIC Coverage, Shashank’s Value Investor YT Channel, and Malabar Investments. I also see the consensus of the analyst if it is being done by a lot of houses & it is readily available.

Inspired by Mohnish Pabrai’s approach to replicating the best ideas from the best people

Sharks in the oceans OR dominating franchises with huge growth runways OR betting on the leading franchise in an industry with decadal growth tailwinds. It helps in avoiding the need to review the business on a weekly or monthly basis (70%+ portfolio invested in these categories of the firms)
Well moated business
Able to justify the valuation at the time of entry or to hold in the context of investment time horizon
I should be able to understand and articulate everything about my thesis in simple terms i.e. the business, why it is likely to grow, and its moat, valuation rationale, etc
Well-diversified portfolio across company sizes i.e. micro-caps, small caps, mid-caps, and large caps
Avoid large firms with Mcap > INR 2.5 lakh crore unless a too-reasonable valuation

Inspired by the Nalanda Capital’s Investing Philosophy for holding stocks for very long term

Inspired by the Coffee Can Investing style advocated by Saurabh Mukherjea & Marcellus Team

P.S. During my time at IIM Ahmedabad, with my friends, I had also done an experiment in the Indian market i.e. how much money one could have made by replicating the portfolio of Mr. Rakesh Jhunjhunwala by copying it after a delay of min 3 months and up to 6 months (2 Qtr) based on publicly available information. Results were stunning, you can check out my report below

https://p17abhishekr.medium.com/beat-sensex-by-3310-by-cloning-the-portfolio-of-mr-rakesh-jhunjhunwala-4805550addc6

P.S. None of this in this document is a recommendation to buy or sell. I am not SEBI registered advisor. It is an individual pursuit to document my personal investing journey. (I know, you don’t care about my recommendations but still need to put a standard disclaimer to avoid unforeseen challenges)

Companies covered so far:

Investments:

(Table Last updated on May 25, 2024; Allocation % keeps on changing based on share prices and new purchases; Individual reviews that are added below may be updated on different dates;

✅ —Thesis & Napkin math added

🌟 — Consistent compounders from earning growth POV AND stable, high-quality operations, governance, and institutionalized companies

Major changes done recently based on last year’s learning i.e. buy at the right valuation + have fewer bets.

Large Cap (~16.5%)

HDFC Bank 11%✅ 🌟
Kotak Mahindra Bank 5.4% ✅ 🌟

Mid Cap (~38.5%)

Pi Industries 3.6%✅ 🌟 — market leader in agro-chemical API/ Drug
Amar Raja Batteries 10.5%✅ — market leader in lead battery
Narayana Hrudayalaya Ltd 7.7% ✅ 🌟
Polycab 7.5% ✅ 🌟 — market-leading franchise
Prestige Prop 5.4% ✅ — dominating firm
Glenmark Pharma 4% ✅

Small Cap (~45%)

Advanced Enzyme 2% ✅ — market leader in enzyme R&D; green chemistry
Senco Gold 7% ✅
Caplin Point 7% ✅ 🌟
Equitas Bank 7.2% ✅
Kaveri Seeds 4% ✅
JK Paper 5% ✅
GPCL: 4.4% —✅ locally dominating firm
Tejas Network: 3.8% ✅
Pennar Industries: 4.3% ✅

Exited → Stock Portfolio Review-Open Journal [Exited]

Investments Review Commentary

🏛 LargeCap Inv#1 HDFC Bank🏛

Source: Multiple sources
First Entry: 2024-03-01
Last Entry: 2024-04-08
Ave Purchase Price: 1,503.33
Status: Buying on dips
Last Review: May 25, 2024
Exit Plan: Not at the moment

🏛 LargeCap Inv#2 Kotak Mahindra Bank 🏛

Source: Marcellus
First Entry: 2020-03-18
Last Entry: 2024-04-25
Ave Purchase Price: 1,713.18
Status: Buying on dips
Last Review: May 25, 2023
Exit Plan: Not at the moment; expectation 20%-22% earnings CAGR over next decade
i.e. 7x in earnings

📗Brief Thesis Blog 1 Blog 2 Blog 3 Blog 4 Blog 5

📝 Napkin Math: Kotak doubles market share while the credit growth in India continues to happen at 14% and it results in a 22% CAGR in earnings over the next 10 years. Public sector banks continue to lose market share. Currently, only 37% of credit demand for MSME is met and the size of unmet demand is 23 lakh crore. Kotak has expertise in lending to quality businesses while also improving its retail presence.

Lending Opportunity Size; Taken from Marcellus KCP Webinar Date Jan 31, 2023, at Video Time Stamp 5:32

🙊Commentary during review on March 18, 2023

Marcellus's commentary on Kotak on Jan 31, 2023

🏠 MidCap Inv#1 PI INDUSTRIES🏠

Source: SOIC 
First Entry: 2022-02-22
Last Entry: 2024-04-08
Ave Purchase Price: 3,407.96
Status: Holding
Last Review: May 25, 2024
Exit Plan: Not at the moment

Brief Thesis Commentary on Acquisition

The Context for Growth from Management Commentary

PI Industries expects to deliver an 18% to 20% growth momentum with better margins in FY24 and to continue commercializing new molecules at a pace of 4 to 5 yearly
The growth projection of 18–20% for the current year is driven by volume, and the growth is widespread, not from a single product.
Margins in Q4 were affected by the product mix, but the company expects to improve overall FY23 margins going into FY24 through operating leverage benefits and improvements in the product mix.
FY24 is expected to be driven by volume growth rather than price increase
CAPEX for next year is around Rs. 900 crore on fixed assets of 2600 cr
Step jump in CAPEX is partly due to deferred CAPEX from FY23 and benefits will be realized in FY25 onwards.
PI Industries acquired two companies in the pharma CDMO and CRO space, marking a solid and accelerated beginning of the PI journey in the pharma space. Company projects revenue of Rs. 550–600 crore and EBITDA margin of 15–18% for pharma acquisitions, but development spend and consolidation will impact these numbers.

📝 Napkin Math for the next 4years:

18-20% growth in sales while improving margins will result in 20%+ CAGR in Profits. It is a compounding machine.

🏠 MidCap Inv#2 AMAR RAJA BATTERIES🏠

Source: Nalanda Capital
First Entry: 2023-08-14
Last Entry: 2023-12-28 
Ave Purchase Price: 727.54
Status: Holding
Last Review: May 25, 2023
Exit Plan: Sometime in next 10 years
Track earnings growth and execution of mega Li-on battery plants

Business Outlook: Operates in the duopolistic market of Lead Acid. Top performer, with a great execution track record.

Napkin Math

Assuming earnings growth will continue at ~10%–11% for the next 10 years. The company is planning aggressive investments of ~10k crores in setting up plants, and R&D for Li-ion batteries.

Last 10 years Sales & Profit growth of Amar Raja Batteries, Screener

The company generates high cashflows. From 2020–2023, over 4 years, it generated ~900 cr in CFO. Most of it is reinvested at ROCE of over 20%.

ROCE of Amar Raja Batteries

Thesis pointer 1: The company can continue to grow its earnings at 10%–12% for the next 10 years.
Current stock P/E 13.3 (vs 27 for Exide)
If over the next 10 years with 10–12% earnings growth, PE reverses to
27 then it is a tailwind of 7%
40 then it is a tailwind of 12%
Thesis pointer 2: As the company does well, sometime in the next 10 years, the multiple will get re-rated. Re-rating will generate [7%-12%] additional returns.
Thesis pointer 3: The company has a dividend payout of ~20% which at current price levels provides a Div Yield of 1%. If the stock price does not move then Div Yield will rise, making it an attractive buy for investors.

Return Expectations: [17%, 24%] over 10 years

The reason to move Dr. Lal Path to Amar Raja was the margin of safety appears higher in Amar Raja. Amar Rajaseem to have bottemed out. The estimates of Dr Lal were still on the high valuation base like P/E of 55 etc.

🏗 MidCap Inv3 Narayana Hospital🏗

Source: SOIC
First Entry: 2023-11-16
Last Entry: 2024-05-03
Ave Purchase Price: 1,270.88
Status: Buying
Last Review: May 25, 2024
Exit Plan: Not at the moment
Key results to monitor: Earnings Growth

📗 Brief Thesis → TBD

📗 Napkin Math →

🏗 MidCap Inv 4 Polycab🏗

Source: SOIC Channel, Was convinced of thesis as have ivnested in KEI earlier
First Entry: 2024-04-08
Last Entry: 2024-05-14
Ave Purchase Price: 5,647.77
Status: Buying at right opportunity
Last Review: May 25, 2024
Exit Plan: Not at the moment
Key results to monitor: Earnings Growth for next 4-5 years; 
proxy to infra spending

🏗 SmallCap Inv 5 Prestige 🏗

Source: SOIC
First Entry: 2024-03-11
Last Entry: 2024-03-11
Ave Purchase Price: 1,189.30
Status: Holding
Last Review: May 25, 2024
Exit Plan: Not at the moment
Key results to monitor: Earnings Growth

🏗 MidCap Inv 6 Glenmark Pharma 🏗

Source: SOIC
First Entry: 2024-05-03
Last Entry: 2024-05-03
Ave Purchase Price: 1,063.26
Status: Buying at right price
Last Review: May 25, 2024
Exit Plan: Not at the moment
Key results to monitor: Execution, deleveraging; 
valuation reverting to mean

🏗 SmallCap Inv #1 Advanced Enzyme 🏗

Source: Nalanda Capital
First Entry: 2020-12-24
Last Entry: 2021-03-02
Ave Purchase Price: 338.14
Status: Holding
Last Review: Nov 25, 2023
Exit Plan: Not at the moment; 
Leader in small pond but with long term tailwinds creating foundations for growth
Key results to monitor: 2x Sales from 2021 to 2026; 
~1000 cr sales in FY2025-26; margins ~40%; Growth in Prebiotics segments

📗Brief commentary on nutraceutical Link 1 Link 2

🙊Commentary during review on March 05, 2023

As per last year’s video, the promoter is on a plan to double revenue and return to margin normalcy.

📝 Napkin math for next four years: revenue 2x to ~1000cr; EBITA 40%; PAT: 27% to 270cr;
Current TTM PAT: ~125 cr; i.e. 2.2x in 3.5 years from here i.e. FY 2023-24 to FY FY2026–27 i.e. ~25% CAGR

Assuming P/E remains the same i.e. ~30 😶

Risks: Client concentration and they did lose one big customer; promoter selling the stakes but they are different people, not the promoter running biz

🏗 SmallCap Inv 2 Senco Gold🏗

Source: SOIC
First Entry: 2023-11-21
Last Entry: 2024-03-05
Ave Purchase Price: 697
Status: 
Last Review: Nov 21, 2023
Exit Plan:

📗 Brief Thesis → TBD

📗 Napkin Math →

🏗 SmallCap Inv 3 Caplin Point 🏗

Source: Self 
First Entry: 2020-06-29
Last Entry: 2023-06-26
Ave Purchase Price: 546.22
Status: Holding
Last Review: Nov 18, 2023
Exit Plan: Not at the moment; 

company wants to take PAT to 1500 cr (3x) from here in next 5-7 years; 
expect consistent growth to continue but 
expect growth may pick up after 3-4 years due to investments that are 
being done currently

📗Thesis →

Have been growing EBITDA for the last 2 decades! high ROCE, No Debt, high OCF/Earning conversion
Growing LATM markets; Entering into niche markets in the US
Promoter bought 2% shares in March 2023
Healthy balance sheet i.e. about ~9% of market cap (9k) liquid assets
Revenue Breakup[2]
Geography-wise:
a.Latin America — 83%
b. USA — 14%
c. Africa — 3%
Channel wise:
a. Distributors — 65%
b. Direct Sales — 20%
c. Tender business — 15%
Segment-wise:
a. Generics — 75%
b. Branded Generics — 25%
Fairly valued

📗Napkin Math →

The company expects strong growth in the next few years with multiple growth drivers.
Earnings CAGR expectations: 3x in 5–6 years i.e. 20%-25%
There is scope for P/E re-rating as success in the US market + PAT of 1500 cr may be seen favorably by the market. P/E may go from 23 to 30; contributing an additional 4%–5% to Price CAGR.

🏗 SmallCap Inv 4 Equitas Small Finance Bank 🏗

Source: SOIC, 2point2, Ashish Dhawan
First Entry: 2023-11-15
Last Entry: 2023-11-15
Ave Purchase Price: 97.99
Status: Holding
Last Review: Nov 18 2023
Exit Plan:

📗Thesis → TBD