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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