Weekly Portfolio Review –25 July 2010

With another week of positive closing for Indian market, BSE sensex closed 0.98% and NSE Nifty 1.02% higher. Total return in the Drops Model Portfolio now stands at 7.92% with an average investment period of 1.77 months. Top gainers are Geometric Software, Cadila Healthcare, Bharti Airtel, Crompton Greaves and HUL and no losers!

Good buys in my watch list

Company Sector Current price 3 years Target Expected Return
Maharashtra Seamless Metal 396.55 707.00 80%
Hindustan Unilever FMCG 261.50 456.00 76%
Bharti Airtel Telecom 313.70 531.00 69%
Hero Honda Auto 1957.90 3013.00 55%
Dr. Reddy’s Pharma 1364.90 2,104.00 54%

Reports shows that with the hike in price on detergents by P&G, the pricing power return to the detergent market after a price war in this segment which help Hindustan Unilver to enhance its margin on these product.

Bharti will make a mandatory open offer for 22% stake in Celtel Zambia, the only public entity in the Zain family. Bharti Airtel has revealed its plans to launch iPhone 4, the latest product from Apple Computers’s stable, by October. With the launch of third generation mobile services in the country by the end of this year, the sale of such high end devices are likely to get a boost.

Mahindra & Mahindra Ltd. plans to introduce its first motorcycles in India within the next few months which will create challenges to Hero Honda Motors Ltd. It intends to add motorbikes ranging from low-cost entry models to premium products.

Dr. Reddy’s Laboratories Ltd reported 14% drop in first-quarter consolidated net profit, dragged mainly by lower sales in the North American market. Chief Financial Officer Umang Vohra said a voluntary recall of some products last year and slower-than-expected ramp-up in some recently launched drugs weighed on the U.S. business. But he expects sales in the market to pick up pace in the second half of this fiscal year. Vohra said the company expects regulatory approval in the U.S. for selling generic Arixtra as well as resolution of the legal issues related to generic Allegra-D 24 toward the end of 2010. The company plans to launch 8-10 products in the U.S. this fiscal year, of which three-four drugs are expected to have limited competition, he told Dow Jones Newswires. The company has received the manufacturing approval for Darbepoetin, its third biosimilar product in India, and expects to commercialise it shortly. Company’s share price dropped 6.01% in the month to date.

NIIT Technologies reported two-fold jump in its net profit for the quarter ended June 30, 2010 on account of reduced hedging losses and improved operational efficiency. India accounted for 16 per cent of the company’s total revenues, US and Europe, Middle East and Africa (EMEA) region contributed 36 per cent and 35 per cent, respectively. It said volume growth in Europe remains strong. Although the firm remained optimistic about its business outlook, it said its margins may come under pressure in the coming quarters from currency risks due to the Euro zone crisis.

Crompton Greaves has declared its first quarter results of FY11. It has reported net profit at Rs 191 crore as against Rs 160 crore, a growth of 16.23% (YoY). Net sales rose 4.8% to Rs 2,302 crore versus Rs 2,197 crore, (YoY). The outlook still remains quite reasonable, although less optimistic than that after fourth quarter results and looks more dependent on how the global economy shapes up. Crompton Greaves is witnessing significant cost pressure in its domestic businesses, even though there is no immediate threat to the top line growth. This has weakened its ability to support the international operations, which account for half of the consolidated sales and have been witnessing fluctuating performance in terms of both top line and profits.

On the back of 5.9% volume growth, Geometric reported 7% rise in operating revenues at Rs 135.45 crore for the quarter ended June 2010.

NTPC has added 490 MW, commissioning the second unit of its Dadri plant near here, to power the 2010 Commonwealth Games.

Drops Model Portfolio

Drops Model Portfolio is built up based on the top buy list in my weekly portfolio review.If you have been investing following my Good Buy List as above, now you would have accumulated shares of 14 companies. By investing weekly with an amount of Rs. 5,000 per transaction, we are building a portfolio of 15-20 companies! As on end of the past week, the average investment period is 0.15 year and gave a return of 7.89%. Download the spreadsheet for more information.

The top 5 companies

Company No. of Shares Market Value Return % Weight Rank
Bharti Airtel 36 11,293.20 12.29% 12% 1
NIIT Tech 58 10,996.80 11.34% 11% 3
Crompton Greave 39 11,247.60 11.89% 12% 2
Geometric 80 6,188.00 25.12% 6% 5
NTPC 50 10,090.00 0.86% 10% 4

Latest Buy Transactions

Date Company No. of Shares Buy Price Investment
17 Jul 2010 GAIL 11.00 441.75 4,859.25
17 Jul 2010 Mahindra & Mahindra 8.00 604.10 4,832.80
10 Jul 2010 NTPC 25.00 198.15 4,953.75
02 Jul 2010 Crompton Greave 20.00 252.30 5,046.00
02 Jul 2010 NIIT Tech 30.00 169.25 5,077.50

My Portfolio

In my personal portfolio top 5 holdings are Infosys, Tata Global Beverages (Tata Tea), Bharti Airtel, NTPC and Maharashtra Seamless. These top five stocks are in my hand for an average 1.40 years and have gained 26.39%. Dabur India is oldest in my portfolio with an average holding period of 3.4 years and its gain stands at 166%. Overall gain in my portfolio this year to date is 8.67%

Archive of previous portfolio reviews


Weekly Portfolio Review –17 July 2010

As at the end of the past week, return on the Drops’ suggested portfolio stands at 6.87% with an average investment period of 1.68 months. BSE Sensex gained 0.69% and NSE Nifty 0.77% in the past week while my portfolio returned 0.04%. My year to date return is 7.94% while Sensex gained 2.81%. In the month to date top gainers in my Portfolio are Bharti Airtel (13.47%), Tata Communications (10.60%), Blue Star (9.23%) and NIIT Tech (6.44%) and top losers were Biocon (-3.33%) and Hero Honda (3.13%).

Good buys in my watch list

Company Sector Current price 3 years Target Expected Return
Bharti Airtel Telecom 298.70 531.00 78%
Maharashtra Seamless Metal 402.15 707.00 77%
Hindustan Unilever FMCG 266.05 456.00 73%
GAIL Energy 441.75 684.00 55%
Mahindra & Mahindra Auto 604.10 925.00 53%

GAIL and Mahindra & Mahindra are new entrants in the good buys list.

–  Bharti Airtel, the number one GSM operator, added three million new users in June, taking its total subscriber base to 136.6 million. Bharti is the leader with a 29.92 per cent market share. Indian GSM telecom operators added 12.29 million new subscribers in the month of June, taking the all-India GSM cellular subscriber base to 456.58 million, according to Cellular Operators’ Association COAI report released last week.

– Bharti Airtel announced that the company would do a brand launch in Africa in October and that the capex plan for the first year of operation, ending March 2011, is around $800 million. It will partner with existing players in the continent to share infrastructure to reduce operational costs. Bharti Airtel’s annual debt servicing cost for its African deal has been pegged at $200 million. Bharti Airtel has won a key concession from the government as it prepares to invest Sh12 billion on its network in Kenya, including the construction of its headquarters in Nairobi and the establishment of a call centre that will employ 1,000 people.

– As per a survey by telecom industry journal Voice & Data, the telecom services industry posted a meagre growth rate of 2.5 per cent in revenues at Rs 1,59,510 crore in 2009-10 due to intense domestic tariff war. The industry had seen a robust growth of 20 per cent in revenues at Rs 1,55,683 crore in 2008-09. Despite a near 50 per cent subscriber growth, the mobile services segment grew a meagre 3.6 per cent to Rs 96,860 crore from Rs 93,522 crore. Tariff cuts and introduction of 1 paisa per second calling introduced by new players forced leading players to cut rates.

– A Business Line report last week shows that HUL was planning to intensify its rural push for brands. Speaking to Business Line, Mr Sudhanshu Vats, Vice President, Home Care and Skin Cleansing, HUL, said, “Deep down in India, the frequency of usage of FMCG categories is low. We want to drive consumption reaching out to the top villages in the top states. Our target is to reach out to 50,000-60,000 villages with experiential and educational campaigns for our brands.”

– With a Buy recommendation, The Hindu Business Line reported that GAIL plans to almost double its pipeline network and capacity over the next four-to-five years. The company’s massive expansion plans in the gas market and regulatory upsides are reasons to invest in the stock. They count the company’s strong positioning, good performance and massive expansion plans in the burgeoning Indian gas market, where demand growth outpaces rapid growth in supplies as reasons for upside.

– The Hindu Business Line finds the Mahindra and Mahindra as a good buy due to its presence in almost all segments, promising launches and initiatives on the farm equipment front. With strategically-priced launches like the Xylo, M&M had a dream run in FY-10.

Drops Model Portfolio

If you have been investing following my Good Buy List as above, now you would have accumulated shares of 12 companies. As of end of the past week, the average investment period is 0.14 year and gave a return of 6.87%. Download the spreadsheet for the detailed study. Last week there were 5 companies in good buy list. Since Top Ten holding is 88% of the total value and all except NTPC are already in the top ten holding, only NTPC was taken as bought in the last week.

The top 5 companies:

Company No. of Shares Market Value Return % Weight Rank
Bharti Airtel 36 10,753.20 6.92% 12% 1
Crompton Greave 39 10,590.45 5.35% 12% 2
NIIT Tech 58 10,544.40 6.84% 12% 3
NTPC 50 9,912.50 -0.91% 12% 4
Geometric 80 6,500.00 31.34% 8% 5

Top gainers to date:

Company No. of Shares Market Value Return % Weight in Portfolio Rank in Portfolio
Geometric 80 6,500.00 31.34% 8% 5
HUL 21 5,587.05 13.36% 6% 8
Cadila Health 9 5,706.90 13.22% 7% 7
Bharti Airtel 36 10,753.20 6.92% 12% 1
NIIT Tech 58 10,544.40 6.84% 12% 3

Top losers!

Company No. of Shares Market Value Return % Weight Rank
NTPC 50 9,912.50 -0.91% 12% 4

Valappil’s Portfolio

Return

Period Valappil’s Portfolio BSE Sensex NSE Nifty
This month 2.13% 1.45% 1.54%
This Year 7.94% 2.81% 3.71%
Since 1-1-2009 121.02 86.13 82.29
Since 1-1-2008 48.55 -11.14 -11.28
Since 1-4-2007 84.56 37.36 41.14

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 15 2.9 Years 66
Tata Tea FMCG 10 1.66 Years 125
Bharti Airtel Telecom 9 6 months 3
Dabur India FMCG 6 3.33 Years 168
Maharashtra Seamless Metal 6 0.5 month 1

Shares I bought this month

Company Average Price
Maharashtra Seamless 388.88
NIIT Tech 176.30
NTPC 198.28

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 168 26 months
Dabur India 137 40 months
Tata Tea 125 20 months
Berger Paints 90 41 months
Infosys 66 34 months

Archive of previous portfolio reviews


Weekly Portfolio Review –10 July 2010

Indian market soared more than 2% in the past week. In the month to date top gainers in the Drops Model Portfolio are Bharti Airtel, Geometric, Tata Communications and top losers were Crompton Greaves, Biocon and Hero Honda. Bharti Airtel gained 17% this month!

Good buys in my watch list

Company Sector Current price 3 years Target Expected Return
Maharashtra Seamless Metal 389.80 707.00 82%
Hindustan Unilever FMCG 262.45 456.00 75%
Bharti Airtel Telecom 308.10 531.00 72%
Crompton Greaves Engineering 251.35 394.00 57%
Hero Honda Auto 2010.00 3013.00 50%
NIIT Tech IT 175.40 261.00 49%
NTPC Power 198.15 293.00 48%

– The reports of foreign brokerage firms upgraded the select telecom stocks including Bharti Airtel. Bharti Airtel announced its capital expenditure and expansion plans in various African countries. The Singapore Telecommunications raised its stake in the Bharti Airtel to 32.04% by buying shares in the open market.

-Tata Communications announced that it has been chosen by Hannover Re to deploy and run its telepresence facilities. The German reinsurer’s telepresence facilities serve the group’s internal teams in 18 locations across 16 countries.

-The country’s largest motorcycle maker Hero Honda registered a growth of 14.63 per cent in its sales at 391,716 units in June 2010. Despite a high base, Hero Honda had its fourth straight month of 400,000-plus sales due to strong motorcycle as well scooter (Pleasure) sales.

-NTPC signed production sharing agreements with the government for four oil and gas blocks – one block in the Cambay basin (Gujarat), two in the Krishna-Godavari basin (off the Andhra Pradesh coast) and one in the Andamans.

-Hindustan Unilever will seek shareholders’ approval to revise the remuneration package of its non-executive independent directors to make it commensurate with their enhanced role and involvement in the corporate governance of the company.

Drops Model Portfolio

If you have been investing following my Good Buy List as above, now you would have accumulated shares of 12 companies. As of end of the past week, the average investment period is 0.13 year and gave a return of 4.91%. Download the spreadsheet for more information.

The top 5 companies:

Company No. of Shares Market Value Return % Weight Rank
Bharti Airtel 36 11,091.60 10.29% 14% 1
NIIT Tech 58 10,173.20 1.19% 13% 2
Crompton Greave 39 9,802.65 -2.49% 12% 3
Geometric 80 6,140.00 22.41% 8% 4
Hero Honda 3 6,030.00 5.51% 8% 5

Top gainers to date:

Company No. of Shares Market Value Return % Weight in Portfolio Rank in Portfolio
Geometric 80 6,140.00 22.41% 8% 4
Cadila Health 9 5,864.85 15.44% 7% 6
HUL 21 5,511.45 11.82% 7% 7
Bharti Airtel 36 11,091.60 10.29% 14% 1
Hero Honda 3 6,030.00 5.51% 8% 5

Top losers!

Company No. of Shares Market Value Return % Weight Rank
Crompton Greave 39 9,802.65 -2.49% 12% 3
NTPC 25 4,953.75 -1.91% 6% 12
Tata Comm 18 4,968.90 -0.56% 6% 11

Valappil’s Portfolio

Return

Period Valappil’s Portfolio BSE Sensex NSE Nifty
This month 2.09% 0.75% 0.76%
This Year 7.90% 2.11% 2.91%
Since 1-1-2009 120.94% 84.86% 80.89%
Since 1-1-2008 48.50% -11.75% -11.96%
Since 1-4-2007 84.49% 36.42% 40.06%

Top 5 holding in my equity portfolio

Maharashtra Seamless is now new entrant into top 5 and Gujarat Gas is out. Bharti Airtel turned positive.

Company Sector % of Total Value Average Holding Period Absolute Return
Infosys IT 16% 35 months 72%
Tata Tea FMCG 11% 20 months 127%
Bharti Airtel Telecom 9% 6 months 6%
Dabur India FMCG 7% 40 months 167%
Maharashtra Seamless Metal 6% 0.5 month -2%

Shares I bought this month

Company Average Price
Maharashtra Seamless 388.88

Top 5 most gain (absolute)

Company Return Average Holding Period
Gujarat Gas 139% 26 months
Dabur India 167% 40 months
Tata Tea 127% 20 months
Berger Paints 94% 41 months
Infosys 72% 34 months

Archive of previous portfolio reviews


Monthly Portfolio Review – June 2010

Good buys in my watch list (02/07/2010)

Company Sector Current price 3 years Target Expected Return
Bharti Airtel Telecom 264.85 531.00 100%
Maharashtra Seamless Metal 386.00 707 83%
Hindustan Unilever FMCG 269.20 456.00 69%
Crompton Greaves Engineering 252.30 394.00 56%
NIIT Tech IT 169.25 261.00 54%

If you followed ‘good buys in my watch list’ in my review with discipline, now you would have accumulated shares of 12 companies spread across 7 sectors. For more details, please download the spreadsheet.

Return in my portfolio

In the month of June 2010, Dabur India, HUL, Tata Tea, Berger Paints, L&T and Biocon gained more than 10%. HCL Technology lost 4.61%. Overall return in the month stands at 5.52% while BSE Sensex gained 4.46%.

Period Drops Portfolio BSE Sensex NSE Nifty
This month 5.52% 4.46% 4.44%
This Year 5.69% 1.35% 2.13%
Since 1-1-2009 116.41% 83.48% 79.52%
Since 1-1-2008 45.46% -12.41% -12.63%
Since 1-4-2007 80.71% 35.40% 39.00%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return
Infosys IT 16% 35 months 67%
Tata Tea FMCG 11% 20 months 128%
Bharti Airtel Telecom 8% 6 months -9%
Dabur India FMCG 7% 40 months 164%
Gujarat Gas Energy 6% 26 months 144%

Shares I bought this month

Company Average Price
NTPC 200.90
Maharashtra Seamless 391.25
Kansai Nerolac 819.80

Shares I sold this month

Company Average Price
NIL

Top 5 most gain (absolute)

Company Return Average Holding Period
Gujarat Gas 144% 26 months
Dabur India 164% 40 months
Tata Tea 128% 20 months
Berger Paints 91% 41 months
Infosys 67% 34 months

Archive of previous portfolio reviews