Weekly Portfolio Review: 26 September 2010

BSE Sensex closed the week 2.3% higher and NSE Nifty 2.27%. The month to date gain on my portfolio is 6.78% and year to date 13.29%. Gujarat Gas, Tata Tea, Infosys, HUL and Bharti Airtel are the highest gainer in my portfolio so far in this year.  I partly booked profit on Blue Star in the past week with a 47% margin.

Good buys in my watch list

Company Sector Target Current Price Margin
Divis Laboratories Pharma 1,094.75 710.35 54%
BHEL Engineering 3,567.00 2,454.90 45%

News Update

NTPC

–          NTPC is aiming to add capacity at 13% compounded annual growth rate (CAGR) in order to generate 75,000 mw by March 2017 and reduce its carbon footprint by increasing the share of renewable and nuclear power in its energy mix and improving energy efficiency of coal-fired plants. The firm has projects worth 17,340 mw under implementation and has initiated tendering for execution of another 7,092 mw capacity. Projects worth 27,000 mw are under preliminary stages, NTPC has said. – The Financial Express, 27th September 2010

–          The Sri Lankan government has offered a 25-year tax waiver and customs duty concessions to NTPC’s  500 Megawatt (Mw) power project planned at Sampur near Trincomalee in the east coast of the island nation, through a gazette notification earlier this month. The Sri Lanka government said it accorded the special incentive as it was a project under the Strategic Development Projects Act of the country. NTPC and Sri Lanka will finalise the details soon. – Business Standard, September 25, 2010

–          NTPC’s Pakri-Barwadih coal mining project, for which the Union Coal Ministry has allotted coal blocks, has got forest clearance from the union Ministry of Forest and Environment for its stage two work. “With this the stage is cleared for starting Conveyor Corridor, Railway Corridor and starting coal mining production by 2012 as per the revised target fixed by the union government,” Rao, the general manager of NTPC’s coal mining project, told newsmen here on Wednesday. – The Economic Times, September 22, 2010

Suzlon

–          The country’s largest wind turbine manufacturer Suzlon Energy on Friday said it has crossed 5,000 MW (megawatt) of cumulative installations in India, underlining the strong momentum in the country’s fast-growing wind energy market. Suzlon has cum ulatively added over 5,000 MW of wind power capacity for over 1,500 customers in India across 40 sites in eight states. – The Business Line, September 24, 2010

–          Wind power major Suzlon Energy today said it has bagged a Rs. 1,149-crore order from Kolkata-based engineering firm Techno Electric Group. The 202 MW (megawatt)order is a part of Techno Electric Group’s agreement with Suzlon for developing 500 MW of new capacity and is the single largest deal signed by an Independent Power Producer (IPP) in the wind power sector, Suzlon said in a filing to the BSE. – Livemint.com, September 21, 2010

Bharti Airtel

–          Zain Kenya, a unit of Bharti Airtel Ltd., plans to overtake market leader Safaricom Ltd. to become the east African nation’s largest mobile phone operator within three to four years, Managing Director Rene Meza said today. Over the next 18 months, the company plans to spend 28 billion shillings ($345 million) expanding Internet coverage to rural areas and rolling out a third-generation network by year- end, Meza said in an interview in Kenya’s capital, Nairobi. – Bloomberg, September 23, 2010

–          Telecom major Bharti Airtel said on Monday that it has given contracts to Ericsson India, Nokia Siemens Networks (NSN) and Huawei Technologies to set up infrastructure for providing 3G services in the country.  These vendors will plan, design, deploy and maintain 3G-HSPA (third generation, high speed packet access) networks in 13 telecom circles where the company has won 3G licences, Bharti Airtel said in a statement. – The Economic Times, September 20, 2010

–          Bharti Airtel, India’s largest mobile-phone company, forecasts “rapid growth” at its satellite television unit on rising demand in rural areas for Bollywood movies and soap operas. Bharti has signed up 3.8 million customers to gain a 14% market share, said Ajai Puri, chief executive officer of the company’s digital TV services business. Industrywide, as many as 12 million people may take up satellite television this year, Mr Puri said in an interview on September17 in New Delhi. – The Economic Times, September 21, 2010

Dr Reddy’s

–          Promoters of Dr Reddy’s Laboratories have no intention of diluting their stake in the company, its managing director K Satish Reddy said today. “Let me be clear once again. We have no such intention to sell any stake or what so ever. There is no such move (dilution of stake),” Satish Reddy replied when asked on the sidelines of pharma CEOs conclave here. He said they will continue to focus on achieving three billion dollars turnover by 2013. – Business Standard, September 24, 2010

GAIL

–          State-run gas transporter GAIL India will make capital investment of around 400 billion rupees ($8.8 billion) by 2014/15, mainly to expand its pipeline network and boost petrochemicals capacity, its chairman said on Wednesday. B.C. Tripathi also said GAIL was exploring gas sector opportunities in the African market. He was speaking at the company’s annual general meeting of shareholders. – Reuters, September 22, 2010

–          State-run GAIL India on Wednesday imported its first liquefied natural gas (LNG) cargo of the year at around $8.3 per million British thermal unit, about a dollar more than what Petronet LNG paid just four-days ago. GAIL, which bought the cargo from BG Group of UK at around $8.3 per mmBtu, plans to import two more cargoes from the spot market this year. – The Economic Times, September 22, 2010

Hero Honda

–          With arch rival Bajaj Auto gaining ground in the entry level of bike segment, the country’s largest two-wheeler maker Hero Honda has admitted its leadership position will come under pressure. The company, which is currently a subject of speculation over a possible exit of Japanese partner Honda from the joint venture with Munjals, has been witnessing a decline in market share in motorcycles of 75cc and above but less than 125cc category. Its market share declined to 61.62 per cent in the April -August period this fiscal, from 73.85 per cent in the same period of 2009-10. – Business Standard, September 20, 2010

Interesting Reading

Brand Hero eyes life after Honda

With Hero Group’s 25-year old marriage with Japan’s Honda Motor seen drawing to a close, all eyes are on the future of Hero’s brands assiduously built up over the years. Will popular bike brands like Splendor and Passion continue to evoke the same excitement or will the absence of the Honda brand change the fortunes of the company? http://www.indianexpress.com/news/brand-hero-eyes-life-after-honda/686793/

Mahindra & Mahindra’s U.S. Plans Are in Jeopardy

Car buyers expect a degree of haggling when shopping for a new vehicle. Yet the fate of trucks built by India’s Mahindra & Mahindra may be determined in the federal courts and by arbitrators, long before the rugged-looking 4×4s even begin rolling onto dealership lots. Mahindra and its American importer, Atlanta-based Global Vehicles U.S.A., are embroiled in a dispute that could halt plans to bring the first Indian-built vehicles into the American market. http://wheels.blogs.nytimes.com/2010/09/21/mahindra-mahindra-u-s-plans-are-in-jeopardy/

Revving two-wheeler sales to cross 12 m this fiscal

Two-wheeler sales for this fiscal are projected to be in excess of 12 million units, a jump of 20 per cent from around 10 million units in 2009-10. Sources say Hero Honda and Honda Motorcycle & Scooter India will together account for nearly 55 per cent of this number at 6.5 million units, followed by Bajaj Auto with over 3.5 million units and TVS Motor with nearly two million units. Yamaha and Suzuki, which are marginal players in comparison, will add to the overall kitty. http://www.thehindubusinessline.com/2010/09/21/stories/2010092150080300.htm

RIL puts out annual reports of 82 of 96 subsidiaries, still not unravelled many layers

It was big, but secretive. It was clever, but complex. That was Reliance Industries Limited (RIL), India’s largest private sector company, when it came to organising its books of accounts and presenting them to the public. Even as it takes a big leap to become more transparent, all those attributes — in shades of black, white and grey — remain characteristic of RIL. http://economictimes.indiatimes.com/news/news-by-industry/energy/oil–gas/RIL-puts-out-annual-reports-of-82-of-96-subsidiaries-still-not-unravelled-many-layers/articleshow/6617094.cms

Crompton Greaves puts wind in Europe sales

The cold, choppy waters of the North Sea are increasingly playing host to a new creature — the slender-necked, rotor-headed, offshore windmill. Sprouting along the coasts of Germany, Norway, Denmark and more recently Belgium, offshore wind energy farms are the new temples for the 21st century environmentalism sweeping across Europe. They perform the seemingly utopian transformation of a free, non-polluting resource — the wind — into the electricity needed to feed the power-hungry contemporary world. And being offshore, they avoid entanglements in the land-use disputes common in densely populated regions, while enjoying the higher and more consistent wind speeds available over the sea. http://www.business-standard.com/india/news/crompton-greaves-puts-wind-in-europe-sales/408897/

Paint companies: Glossed over

Companies in the paints sector are bracing for the increased demand due to robust economic growth and rising incomes. Berger Paints, the third-largest player, plans to increase its capacity from 250,000 tonnes to 450,000 tonnes in the next two years, while the second-largest Kansai Nerolac will enhance its capacity by 50 per cent to 300,000 tonnes over the next three years. Market leader Asian Paints plans to triple its current capacity of about 600,000 tonnes in the next few years. http://www.business-standard.com/india/news/paint-companies-glossed-over/408755/

Hindustan Unilever’s Bharat Darshan

The new consumers in India’s villages are ambitious and demanding just like their urban counterparts. And Hindustan Unilever is responding to the change with a distribution overhaul. Read more: http://business.in.com/article/boardroom/hindustan-unilevers-bharat-darshan/17462/1#ixzz10fSQE554

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 1.13% 2.30% 2.27%
This month 6.78% 11.54% 11.40%
This Year 13.29% 14.77% 15.71%
Since 1-1-2009 131.97% 107.79% 103.39%
Since 1-1-2008 55.91% -0.80% -1.01%
Since 1-4-2007 93.70% 53.34% 57.48%
Since Beginning 124.31% 54.93% 60.69%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.85 Years 82
Tata Global Beverages FMCG 7 1.80 Years 134
Bharti Airtel Telecom 7 8 months 27
HUL FMCG 7 3 Months 23
Hero Honda Auto 6 4 months 1

Shares I bought this month

Company Average Price
Dr Reddy 1,363.00
KSB Pumps 562.99
Hero Honda 1709.70
Maharashtra Seamless 378.95
Hindustan Zinc 1140.86
HUL 279.15

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 214 2.3 Years
Dabur India 164 4.4 Years
Tata Tea 134 1.8 Years
Berger Paints 172 3.5 Years
Infosys 82 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Mangalam Cement -6 1 month
KSB Pumps -6 1 month
Graphite India -5 2 months
Hindustan Zinc -4 1 month
Tata Communications -4 9 months

Archive of previous portfolio reviews


Weekly Portfolio Review: 18 September 2010

BSE Sensex closed the week 4.2% higher which is the biggest up-move in the last 10 months. Sensex beat me in leaps and bounds this week which brought the gain on Sensex close to the gain on my portfolio on year to date basis. It happened because the major gain in Sensex this week came from Banking and Realty sector in which I do not hold any shares! Now year to date gain on my portfolio and Sensex stands at 12%!

Berger Paints, Gujarat Gas, Suzlon Energy and Reliance were largest contributor of gain in the month so far for me while Hero Honda was in negative. Hero Honda is still in the grave uncertainty and I will be waiting until the cloud is cleared before buying further though I would prefer to hold what I already have. Please read the piece in which I have compiled news reports on Hero Honda.

Good buys in my watch list

Even though there are some companies in my watch list that still have potential and available at good price to buy, I would prefer to hold on for some time. It is in such a speed that stock market soared during the last couple of weeks and the euphoria may not last for so long.

News Update

Suzlon

–          China will make up about a third of Indian wind turbine maker Suzlon Energy Ltd’s total business by 2015, its chief said, helped by Beijing’s strong incentives to promote clean energy. China accounts for about 10 percent of the group’s total revenue. Research by China Wind Energy Association has projected that China would expand its wind power installed base by between 108 GW and 132 GW by 2020. – Reuters

–          Wind turbine-maker Suzlon Energy today said its subsidiary, REpower, will supply three turbines to Sweden’s Klagerup Kraft AB, to be installed by 2011. REpower Systems, in which Suzlon Energy is the majority shareholder with a 90 per cent stake, has signed an agreement with Klagerup Kraft AB for delivery of three wind turbines to Sweden, an official statement said. – Business Standard

Hero Honda

–          The Munjal family-promoted Hero group is likely to purchase the entire stake of Honda Motor Co in their joint venture Hero Honda Motors Ltd through a special purpose vehicle incorporated in Singapore. The group is also in talks with three international funds to offload a part of its stake in the special purpose vehicle, a source said. – DNA

–          KKR & Co., TPG Capital, Carlyle Group and Bain Capital LLC are competing to acquire a part of Honda Motor Co.’s stake in India’s biggest motorcycle maker, according to five people with direct knowledge of the situation. – Bloomberg

Bharti Airtel

–          India’s top mobile phone firm Bharti Airtel took the initial steps to replicate its hugely successful outsourcing model in Africa by awarding a $1.5-billion contract to IBM for managing its IT requirements across 16 countries in the continent. – The Economic Times

–          Bharti Airtel is in talks with other mobile operators, including Vodafone Essar and Idea Cellular, to form a strategic alliance to offer third generation services on a pan-India level. The alliance has been made necessary because none of the operators has won 3G spectrum in all the circles. While Bharti has won spectrum in 13 circles, Vodafone has 3G airwaves in nine and Idea in 11 circles. – Business Line

–          India added over 13.5 million new GSM mobile subscribers in August, with Bharti Airtel adding a little over two million users to achieve close to 30 per cent market share. The total GSM subscriber base stood at over 481 million in August this year, a growth of 2.89 per cent over the month of July, Cellular Operators Association of India ( CAOI) said in its latest figures. Country’s largest private telecom firm Bharti Airtel added a little over two million subscribers to take its total user base to 141.25 million and market share to 29.33 per cent. – Times of India

–          Bharti Airtel has become the first mobile operator in the country to get a licence from the Reserve Bank of India to start mobile payment services. This service will allow Airtel subscribers to exchange physical cash for virtual money which can be stored on mobile phones to pay for goods and services for transaction value less than Rs 5,000. Once the user loads up his phone with prepaid cash he can walk into specified merchant locations and purchase goods and services.

–          Bharti Airtel will sell the mobile phone towers of its African operations to arm Bharti Infratel, raising badly-needed cash and taking a big step towards replicating the outsourced business model that has underpinned its growth in India. The deal is expected to be sealed for Rs 12,000-15,000 crore by December 2010, two persons with direct knowledge of the proposed transaction said, adding that Bharti Infratel will in turn raise money by selling stakes to sovereign and private equity funds. Bharti Infratel is owned 90% by India’s largest cellphone service provider. – The Economic Times

NTPC

–          NTPC Ltd plans to produce coal from its captive mine in Jharkhand by the next financial year. “We have just got the environment clearance and we hope to produce coal from Pakri Barwadhi mine in 2011-12,” said the new Chairman and Managing Director, Mr Arup Roy Choudhury. – Business Line

–          NTPC plans to add 9,500 mega watt of gas-based power generation capacity in the 12th Five Year Plan beginning Apr 2012, chairman and managing director Arup Roy Choudhury said on Friday. “We are talking to the government for gas linkages and are in advanced stage,” Roy Choudhury told reporters. NTPC has capacity to generate 32,000 mw power currently out of which 18% is gas-based and the remaining is coal-based. – The Financial Express

Interesting Reading

HUL’s steady ride may upset co’s buyback plans

Shares of Hindustan Unilever (HUL) have been trading within kissing distance of the maximum buyback price at Rs 280 announced by the company in June this year. This has triggered speculation in the market that the company could revise the buyback price upwards, if the stock stayed above Rs 280. But the company has made it clear that it will not buy back shares, if the price exceeds that limit. http://economictimes.indiatimes.com/markets/stocks/stocks-in-news/HULs-steady-ride-may-upset-cos-buyback-plans/articleshow/6556347.cms

European wind power, Indian technology

A century and a half ago, Siemens, Europe’s largest engineering company, changed the face of global communication by laying a telegraphic cable from London across the North Sea and onwards to Calcutta, then the capital of India. Next week, an Indian engineering company will proclaim its own feat of electrical engineering beneath the choppy waters of the North Sea in one of the marvels of the new age: renewable energy. Crompton Greaves, one of India’s largest electrical engineering companies, is building, as part of a wider consortium, one of Europe’s largest and deepest offshore wind farm projects, 50 kilometres off the coast of Belgium. http://blogs.ft.com/beyond-brics/2010/09/10/european-wind-power-indian-technology/

My Portfolio

Return (%)

Return
My Portfolio BSE Sensex NSE Nifty
This Week 0.93% 4.23% 4.34%
This month 5.59% 9.03% 8.93%
This Year 12.03% 12.20% 13.15%
Since 1-1-2009 129.38% 103.12% 98.88%
Since 1-1-2008 54.17% -3.03% -3.20%
Since 1-4-2007 91.54% 49.90% 53.99%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.85 Years 78
Tata Global Beverages FMCG 7 1.80 Years 130
Bharti Airtel Telecom 7 8 months 23
HUL FMCG 6 3 Months 10
KSB Pumps Engineering 6 1 month -2

Shares I bought this month

Company Average Price
Dr Reddy 1,363.00
KSB Pumps 562.99
Hero Honda 1709.70
Maharashtra Seamless 378.95
Hindustan Zinc 1140.86
HUL 279.15

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 225 2.3 Years
Dabur India 176 4.4 Years
Tata Tea 130 1.8 Years
Berger Paints 184 3.5 Years
Infosys 78 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Hero Honda -5 3 months
Hindustan Zinc -5 1 month
Mangalam Cement -4 1 month
Swaraj Engines -3 1 month
Maharashtra Seamless -3 2 months

Archive of previous portfolio reviews


Fate of Hero Honda

It was all bad news for Hero Honda for the last few months. It has been struggling with the situation of increasing competition from its peers and interest rate hike that may hurt its sales while the rumours of stake sale by Honda added fuel to fire.

I have been buying Hero Honda since March 2010 and my average cost is 1,852.22. I bought 4 lots of equal value since March and have paid as high as 1,967.65 in April and 1,709.70 this month. The rumour of Honda leaving the joint venture hit the stock hard. However both the parties – Honda and Hero Group – have denied the news. Though the effect of interest rate hike on the sales will be short lived, the intense competition from existing players like Bajaj and TVS and new entrants like Mahindra and Mahindra will be a real concern going forward. I will continue to hold what I already have for the time being, but will not be buying more until the cloud is cleared.

Honda leaving the Joint Venture

News of Honda offloading its 26 per cent stake in the joint venture Hero Honda Motors Ltd has been in the air for some time now. However the management of both the companies have denied it. Market analysts said Honda’s exit from the company is likely to drive down the valuation of the Hero Honda script on concerns that the company may not have access to the latest two-wheeler technology.

Hero Honda: Going it alone
Business Standard, Sep 4, 2010
The implications of Honda pulling out of the company are still being worked out and a possible re-rating is expected. Concerns exist over the fate of Hero Honda, especially with regard to Honda possibly selling its 26 per cent stake to the promoters and exiting the company. In fact, even as any such deal is yet to be announced, analysts have started to work out the implications.

Uncertainty over JV clouds Hero Honda
Livemint, Sep 6, 2010
Analysts say that despite its large vendor base and indigenization, HHML almost entirely depends on Honda for engine technology. Its power-packed brands—Splendor and Passion— that have catapulted the firm’s brand equity, have Honda’s engine technology. If HHML goes on its own, it would have to invest significant amounts into research and development (R&D) to keep pace in the marketplace. Another option will be to scout for a new technology partner. But this would warrant a brand relaunch, which, in turn, could mean marketing costs and risk of product acceptance.

JV break-up a near-term pain for both
Business Standard, Sep 9, 2010
Analysts say, given that the high growth phase in the motorcycles business is past us and with key urban markets saturated, both parties will have to think hard about going separate ways. If Honda decides to exit Hero Honda, the latter’s scrip is likely to tank and shareholders might be looking at large losses. However, if Honda were to buy Hero’s stake, it could see a major rerating, especially if HMSI is then integrated into the company, believes Umesh Karne of BRICS Securities.

Impact of Interest Rate Hike

Hero Honda Expects India Motorcycle Sales to Slow on Rising Interest Rates
Bloomberg, August 24, 2010
Hero Honda Motors Ltd., maker of about half the motorcycles sold in India, said demand will grow more slowly this year as the central bank raises interest rates to pare inflation. India may take further steps to damp rising prices, Sud said, after four interest-rate increases since March failed to bring inflation down from near 10 percent. Rising prices have stoked public protests and sap demand for motorcycles in India, the world’s second-biggest two-wheeler market. State Bank of India, the country’s biggest bank, raised its benchmark lending rate to 12.25 percent from 11.75 percent last week. ICICI Bank Ltd., the second largest, increased its prime lending rate to 16.25 percent from 15.75 percent.

Competition and Sales Growth

Hero Honda reported a slow 2% YoY increase in sales during the month of August 2010. This seems to be particularly low when compared to the sales volumes of other two-wheeler majors in the country. For instance, TVS Motor reported a 34% YoY rise in volumes, while Suzuki Motorcycle reported a 51% YoY increase in volumes during the month. India Yamaha Motor on the other hand reported a 30% YoY rise in volume sales during the month. Bajaj Auto saw its sales volumes improve by 55% YoY during the month. – Equity Master

Hero Honda on 2nd September launched the new model of Super Splendor that comes with ‘Honda intelligent ignition system’ (HIIS). Priced at Rs.45,950, the new bike features a newly designed carburettor for improved engine performance and five-step adjustable rear shock-absorber for smoother drive and comfort. – The Hindu


Weekly Portfolio Review: 11 September 2010

How do you track your investment in shares? Most of the brokers provide a portfolio tracker integrated to its online trading platform. It is enough for an average retail investor. The transaction and current market price will be automatically updated in the system. If you are so enthusiastic that you don’t mind spending some extra time in updating your transaction on another system, there are many paid and free online service to track and manage your investments. Those provide tools to analyse your investment with real time data including news related to shares in your portfolio. One such comprehensive and free portfolio tracker is provided by www.moneycontrol.com. You can also manage your portfolio with your own spreadsheet or download one here.

Indian benchmark indexes BSE Sensex and NSE Nifty surged over 3% this week. My portfolio gained 4.62% in the month to date and 11% year to date. Gujarat Gas, Suzlon Energy and Blue Star were largest contributor of gain in the month so far for me while Hero Honda was in negative. I bought Hero Honda, KSB Pumps and Maharashtra Seamless this week. This made Hero Honda and Maharashtra Seamless into my top 5 holding. Uncertainty about the parting of joint venture of Hero group and Honda still remain, though both parties have denied it. In case the Honda leaves the JV, the stock price may tumble!

Good buys in my watch list

Script Sector Target CMP Margin
KSB Pumps Engineering 1,072.25 572.45 87%
HUL FMCG 470.00 277.85 69%
Hindustan Zinc Metal 1,730.00 1,086.90 59%
Reliance Petro 1,450.00 957.95 51%
Dr. Reddy Pharma 2,106.00 1,401.50 50%

News Update

–          Mahindra & Mahindra (M&M), the country’s biggest sport utility vehicle (SUV) maker, is working on smaller fuel-efficient petrol engines to power its future growth, likely to be driven by overseas markets – Business Standard

–          Drug maker Dr Reddy’s Laboratories (DRL) has lined up investments worth around Rs 1,600 crore over the next two years for capacity expansion and building new capabilities. The company feels these investments will help it meet future growth requirements and become a $3-billion company by 2013. – Business Standard

–          Crompton Greaves Ltd said on Friday that it entered into pact with Spain-based ZIV Aplicaciones y Tecnologia, S. L (ZIV), for establishing a joint venture company in India, for the manufacture of sub-station automation systems. It is estimated that the total equity capital of the joint venture will be Rs. 10 crore, out of which the company will contribute Rs. 7 crore, for a 70 per cent shareholding. – Business Line

–          The Hero Honda stock is down six per cent over the last one week and over 15 per cent down over the last one month. The Street is worried about reports that Honda, the Japanese joint venture (JV) partner, may sell its stake in the company and exit to focus on its 100 per cent owned Indian subsidiary, Honda Motorcycles and Scooters India (HMSI). – Business Standard

–          FMCG major Hindustan Unilever (HUL), owner of well-known tea brand Brooke Bond, today launched a body to spread awareness, dispel “myths and misconceptions” existing around tea and educate people on its health benefits.

–          The number of mobile subscribers in the country crossed the 652.42 million mark in July, with the addition of 16.92 million connections, official data show. The growth in this category was led by Bharti Airtel, which added 2.6 million users to take its subscriber base to 139.2 million users. – The Times of India

–          Leading paint manufacturer Kansai Nerolac Paints (KNPL) on Tuesday said it plans to invest Rs 600 crore to enhance its production capacity by 50 per cent over the next three years.  The company has also appointed Bollywood superstar Shah Rukh Khan as brand ambassador for promoting its eco-friendly paints. – The Economic Times

–          India’s second largest paints maker Kansai Nerolac Paints is looking at an 18-20% sales growth for the 2010-11 fiscal. It had recorded a similar growth in 2009-10 when the company clocked a turnover of Rs 1,970 crore. The company, which holds a 12% market share in the decorative paints segment after Asian Paints, might go for a price hike post October. – The Financial Express

Interesting Reading

NTPC blues: Financial Express

NTPC, the other large PSE operating in the power segment, seems to be caught in a downward spiral. The company that was identified as a prize jewel and conferred the Maharatna status only recently has seen its fortunes dip sharply, mainly on account of growing competition from private sector units. Although NTPC was to commission an additional capacity of 9,220 mw by the middle of the Eleventh Plan, it was able to set up only 3,730 mw during the period.

Bharti Airtel: The making of a media conglomerate – Business Standard

Is Bharti Airtel India’s fourth-largest media company? If estimates are right, then its revenues from selling music downloads, DTH services, IPTV and digital media outsourcing were upwards of Rs 2,900 crore in March 2010. That is about 7 per cent of its Rs 41,829 crore revenues that year. This number puts India’s largest telecom operator right at the top of the media big league. The interesting part is not just the size of its media play, but the products and services that have taken Bharti Airtel to this position. Unlike other media biggies, its fortunes come not from selling newspapers or broadcasting TV channels, but from redistributing music, selling television signals and being the back-end for a host of media companies.

My Portfolio

Return (%)

Return
My Portfolio BSE Sensex NSE Nifty
This Week 2.49% 3.26% 3.01%
This month 4.62% 4.61% 4.40%
This Year 11.00% 7.64% 8.44%
Since 1-1-2009 127.27% 94.88% 90.61%
Since 1-1-2008 52.76% -6.96% -7.23%
Since 1-4-2007 89.78% 43.82% 47.59%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.85 Years 73
Tata Global Beverages FMCG 7 1.80 Years 139
Bharti Airtel Telecom 7 8 months 20
Hero Honda Auto 6 3 Months -6
Maharashtra Seamless Metal 5 2 months -3

Shares I bought this month

Company Average Price
Dr Reddy 1,363.00
KSB Pumps 561.38
Hero Honda 1709.70
Maharashtra Seamless 378.95

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 221 2.3 Years
Dabur India 173 4.4 Years
Tata Tea 139 1.8 Years
Berger Paints 130 3.5 Years
Infosys 73 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Hero Honda -6 3 months
Graphite India -4 1 month
Hindustan Zinc -4 1 month
Mangalam Cement -3 1 month
Maharashtra Seamless -3 2 months

Archive of previous portfolio reviews


Weekly Portfolio Review: 04 September 2010

162% return! Anybody will be tempted with such a recommendation to buy more and more shares of those companies. I have got a couple of recommendations that anticipate more than 100% return in 2-3 years. These recommendations are from reliable and professional equity researchers and I have good faith on them. However these reports and recommendations are based on various assumptions and estimates (not rumours and speculation of course). So things can go wrong. So I decided to have some control and limit on how much exposure I can have based on a single research product. Anyway, I have set limits to avoid concentration on a few companies or sectors. So, I would strongly suggest you to avoid over exposure to few companies or sectors. Diversify into a reasonable number of companies and sectors. Once you have built the base, you can add more of those which are already in your portfolio. You may miss out opportunities, but you can substantially reduce the risk. Some people may rubbish the idea of investing small amount in a company! Many drops make an ocean.

Past week ended with a gain of 1.31% in BSE Sensex and 1.34% NSE Nifty and 2.08% in my portfolio. My year to date gain is 8.30% while that of BSE Sensex is 4.24% and NSE Nifty 5.27%. In my last review, I mentioned it was Suzlon who stole a major chunk of my gain during the year. Afterward in the last two days, Suzlon gained 7.99%! Yes, it was on a rumour that Reliance would buy a stake in Suzlon which has been denied by Reliance later.  In the year largest contributors of gain for me remain Tata Global Beverages, Gujarat Gas and Dabur India.

Good buys in my watch list

Scipt Sector Target CMP Margin
Mangalam Cement Cement 400.00 152.90 162%
Graphite India Engineering 200.00 94.10 113%
Swaraj Engines Auto Ancil 850.00 408.85 108%
Maharashtra Seamless Metal 727.00 378.50 92%
KSB Pumps Engineering 1,072.25 573.50 87%
Hero Honda Auto 3,069.00 1,736.15 77%
HLL FMCG 469.00 272.05 72%
Hindustan Zinc Metal 1,730.00 1,081.55 60%
Reliance Petro 1,450.00 925.60 57%
Dr. Reddy Pharma 2,106.00 1,387.80 52%

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 2.08% 1.31% 1.34%
This month 2.08% 1.31% 1.34%
This Year 8.30% 4.24% 5.27%
Since 1-1-2009 121.76% 88.72% 85.03%
Since 1-1-2008 49.05% -9.90% -9.95%
Since 1-4-2007 85.18% 39.27% 43.27%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 11 2.80 Years 66
Tata Global Beverages FMCG 8 1.80 Years 129
Bharti Airtel Telecom 7 8 months 17
Gujarat Gas Energy 5 2.30 Years 181
HUL FMCG 5 3 months 10

Shares I bought this month

Company Average Price
Dr Reddy 1,363.00
KSB Pumps 547.75

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 181 28 months
Dabur India 166 53 months
Tata Tea 129 22 months
Berger Paints 125 42 months
Infosys 66 34 months

Top 5 most loss (absolute)

Company Return % Average Holding Period
Hero Honda – 8 4 months
Mangalam Cement – 6 1 month
Graphite India – 6 1 month
Swaraj Engines – 5 1 month
Hindustan Zinc – 5 2 weeks

Note that all those which are in loss are less than one year in my holding.

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Monthly Portfolio Review: August 2010

2010 continues to be a lackluster year for the stock markets with Sensex gaining just 2.90% year to date. My portfolio gained 6.09% during the same period. Five companies namely Tata Global Beverages, Gujarat Gas, Dabur India, Piramal Healthcare and Crompton Greaves contributed 72% of my total gain in the year to date, while Suzlon Energy took me down sucking 23% of my overall gain. It was a terrible mistake that I missed to offload Suzlon at right time. Huge debts on its balance sheet and poor performance of the wind power sector in America and Europe due to downturn put Suzlon in a mess. Almost all of shares that I bought during last three months are in negative. Q2 of 2010 was the best quarter as all my gain was registered during this quarter.

My Portfolio

In the month of August I invested in some small-mid cap stocks like KSB Pumps, Swaraj Engines, Mangalm Cements and Hindustan Zinc. I also added more on Dr. Reddy’s Lab, Hero Honda and Reliance Industries. During the coming weeks, I may consider adding some more of these stocks. There is no major change in my top 5 holding and top 10 holding is below 60% of total value. Average holding period is about 11 months and Dabur India being the highest with 4.38 years in my holding.

News Updates

Major news on companies during the last week

The stock of Reliance Industries has taken a beating as the company’s motive behind the stake purchase in EIH is not clear. The jury is still out over the decision of Reliance Industries (RIL) to buy a 14.12 per cent stake in East India Hotels (EIH). Reactions are mixed, as RIL’s intention behind the purchase is not clear. The markets did not seem happy with the Rs 1,021-crore outflow in an unrelated investment. Hence, the share price tanked. – Business Standard

NTPC and Bhel are jointly setting up a project to manufacture power plant equipment with an outlay of Rs6,000 crore at Mannavaram in Chittoor district. Government estimates claim that about 6,000 direct jobs would be created in the project in addition to about indirect employment to about 25,000 people. Prime Minister Singh would lay the foundation stone, after repeated postponements, for the project on September 1. – DNA

Telecom major, Bharti Airtel, today announced the launch of data services in Thailand and Malaysian markets.  “The launch…enables us to cater to two of the fastest-growing international bandwidth markets,” Bharti Airtel’s Chief Executive Officer for global data business, Ajay Chitkara, said. – The Economics Times

Maharashtra Seamless has reported a 9.5 per cent hike in the net profit for the year ended March 31, 2010 over the previous financial year ended March 31, 2009. The net profit has increased from Rs 259.91 crore for FY09 to Rs 284.60 crore for FY10. However net sales fell by 21 per cent, from Rs 2038.87 crore for the financial ended March 31, 2009 to Rs 1593.17 crore for FY10. – Business Standard

Glenmark Pharmaceuticals on Monday said it has discovered a new drug molecule, which could be used for treating pain and respiratory disorders. The new drug molecule, codenamed ‘GRC 17536′ has completed pre-clinical trials (animal tests) and will move into clinical trials (tests on humans) in the first quarter of 2011, the company said in a statement. – The Economic Times

State-run utility NTPC Ltd on Monday signed a preliminary agreement with Bangladesh Power Development Board (BPDB) for developing the power sector in the neighbouring country. NTPC may consider setting up a 1,320 megawatts coal-based power plant in Bangladesh in a joint venture with BPDB, subject to techno-economic viability, NTPC said in a statement. – The Economic Times

In a strategic move, FMCG major Hindustan Unilever Ltd (HUL) is consolidating its brand building strategy for its entire packaged foods business under the master brand ‘Knorr’. With the proposed foray of Tata Global Beverages into the packaged foods sector, competition will hot up soon. The Rs 50,000 crore packaged foods industry is currently growing at the rate of 15%. – The Financial Express

The stock markets cheered the price hikes by Hindustan Unilever (HUL) and Marico, with a majority of stocks in the FMCG (fast moving consumer goods) Index rising one-four per cent on Wednesday. While the move to raise prices is a positive, it will only be able to cover the increase in input costs. – Business Standard

Mahindra & Mahindra Wednesday said it will set up a new tractor facility by 2012-13 fiscal with a production capacity of up to one lakh units per annum, for which it is looking at South India, including Tamil Nadu. The company currently has four facilities in Nagpur, Mumbai, Jaipur and Chandigarh with a total production capacity of two lakh units annually. – The Economic Times

B K Birla Group company Mangalam Cement on Tuesday (24th August) said its board has given in-principle nod for the merger of sister firm Mangalam Timber Products with itself. Mangalam Timber Products went into the red last fiscal with a net loss of Rs 1.23 crore against a Rs 1.5 crore net profit in the previous fiscal. Mangalam Cement, which has a two million tonnes per annum facility at Kota in Rajasthan, had recorded net profit in the last fiscal Rs 118.81 crore against Rs 97.16 crore in the previous fiscal. – The Economic Times

Bharti Airtel, which acquired the African assets of Zain Telecom in February, has started the process of giving orders for setting up new telecom towers there. The company had already sought bids to set up towers in countries like Nigeria, Kenya and Tanzania, said sources. Bharti is giving these orders market wise, instead of one bulk order. They said the contracts for passive infrastructure equipment and turnkey projects to build towers were likely to be awarded next month. – Business Standard

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