Monthly Portfolio Review: July 2010

In the month of July, BSE Sensex gained 0.95% and NSE Nifty 1.05%, while my personal portfolio returned just 0.10%! Year to date gain on Sensex is 2.31% and my return stands at 5.80%. As at the end of this month, return on Drops’ Model Portfolio is 4.23% on an average investment period of 1.91 months down from 7.92% at the end of the last week!

In the month, top gainers in my Portfolio were Bharti Airtel (16.58%), HCL Tech (7.51%), Blue Star (7.19%), Crompton Greaves (6.89%) and NIIT Tech (5.24%) and top losers were Hero Honda (11.31%), Dr. Reddy’s (6.86%), GAIL (6.20%), HUL (5.92%) and Dabur India (5.79%).

Good buys in my watch list

Company Sector Current price 3 years Target Expected Return
Mangalam Cement Cement 163.95 400.00 144%
Graphite India Engineering 95.15 200.00 110%
Swaraj Engines Auto Ancillaries 419.05 850.00 103%
KSB Pumps Engineering 569.25 1,072.25 88%
Hindustan Unilever FMCG 251.10 462.00 84%

–          Mangalam Cement Limited incorporated in 1978 is a prominent cement manufacturing company from the house of B.K. Birla group. Its stock price has come down 25% from its 52 week high. Cement industry growth hit 57-month low in June 2010 due to low demand from infrastructure sector and less construction since the monsoon’s spread. The demand and price is expected to rise after monsoon period.

–          Graphite India Limited is the largest producer of graphite electrodes in India and one of the largest globally, by total capacity. Its first plant was commissioned in 1967 and today it has 3 plants in India and one in Germany. GIL exports 65% of its production to over 50 countries. Its stock price has come down 24% from its 52 week high. Graphite India showed strong top line growth during Q1 FY 2011, both in terms of volume and value. The company is expected to grow in future from the increasing number of expansion projects in the steel sector, the main user of graphite electrodes. The graphite electrodes division contributes 78% to the company’s revenue.

–          Swaraj Engines Limited manufactures diesel engines, diesel engine components and spare parts. M&M currently holds 33.2% stake in Swaraj Engines while Kirloskar Oil holds 17.39%.

–          KSB Pumps makes industrial pumps and industrial valves. It is part of The KSB group.

–          Hindustan Unilever saw its quarterly net profit dip 1.8 percent on slow volume growth from a year earlier and higher advertising and promotional expenses aimed at battling competition and protecting its market share. Commenting on the results, HUL Chairman Harish Manwani said: “Despite an intensely competitive environment, we have sustained double digits volume growth. We continue to invest fully to defend our strong leadership position and build competitive growth momentum through bigger and better innovations.”

–          In what could be its biggest acquisition, power equipment maker Crompton Greaves has offered $400 million (Rs 1,860 crore) for the transformer division of the US-based Emerson Electric Company, Business Standard reported.

–          Profit at NTPC Ltd unexpectedly declined 16.1 percent last quarter, the most in two years, after fuel costs rose as the government doubled natural gas prices.

–          NTPC Ltd’s plans to sell electricity in the spot market, under which around 65 per cent power generated from two of its projects is to be offered at a market-based price through short-term sales, is set to get the Centre’s nod shortly. The company — the country’s largest power generator — is in the process of working out a pricing policy for such sales. The merchant power business is risky by virtue of power not being tied-up upfront but offers lucrative returns in light of the electricity shortages across the country – The Hindu Business Line

–          NTPC Ltd seeks 14.5 million metric tons of coal for the year ending March 2012 in its largest annual import, a company official said. NTPC is importing the fuel directly for the first time rather than arranging for supplies through Indian state-owned trading companies such as MMTC Ltd. and the State Trading Corp. of India – Bloomberg Businessweek

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 15 companies. By investing weekly with an amount of Rs. 5,000 per transaction, we are building a portfolio of 15-20 companies! As of end of the month, the average investment period is 1.91 months and gave a return of 4.23%. Download the spreadsheet for more information.

Last week there were 5 companies in good buy list. Since Top Ten holding is 75% of the total value and all except Dr. Reddy’s are already in the top ten holding, only Dr. Reddy’s was taken as bought in the last week.

The top 5 companies:

Company No. of Shares Market Value Return % Weight Rank
Bharti Airtel 36 11,048.40 9.86% 11% 1
Crompton Greave 39 10,764.00 7.08% 11% 2
NIIT Tech 58 10,425.50 5.65% 10% 3
NTPC 50 9,930.00 -0.74% 10% 4
Cadila Healthcare 9 5,704.20 13.38% 8% 5

Top gainers to date:

Company No. of Shares Market Value Return % Weight in Portfolio % Rank in Portfolio
Geometric 80 5,700.00 15.10 6 6
Cadila Health 9 5,704.20 13.38 6 5
Bharti Airtel 36 11,048.40 9.86 11 1
Mahindra & Mahindra 8 5,292.00 9.50 5 9
HUL 21 5,273.10 8.77 5 10

Top losers!

Company No. of Shares Market Value Return % Weight in Portfolio % Rank in Portfolio
Hero Honda 3 5,446.20 -4.70 5 7
Suzlon Energy 85 4,802.50 -3.67 5 15
Tata Communication 18 4,869.00 -2.56 5 13
Dr. Reddy’s 4 5,410.40 -0.90 5 8
Gail 11 4,820.00 -0.80 5 14

Valappil’s Portfolio

Return (%)

Period Valappil’s Portfolio BSE Sensex NSE Nifty
This month 0.10 0.95 1.05
This Year 5.80 2.31 3.20
Since 1-1-2009 116.63 85.22 81.40
Since 1-1-2008 45.60 -11.57 -11.71
Since 1-4-2007 80.89 36.69 40.46

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 14 3 Years 67
Tata Global Beverages FMCG 9 1.75 Years 118
Bharti Airtel Telecom 8 7 months 6
Maharashtra Seamless Metal 6 1 month 1
NTPC Power 6 10 months -1

Shares I bought this month

Company Average Price
Maharashtra Seamless 388.88
NIIT Tech 176.30
NTPC 198.28
GAIL 449.20
Dr. Reddy’s 1,360.00
HUL 262.20

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 144 27 months
Dabur India 148 40 months
Tata Tea 118 21 months
Berger Paints 93 42 months
Infosys 67 36 months

Archive of previous portfolio reviews

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