Tag Archives: Hindustan Zinc

Another Fruitful Year for Share Market

For stock market in India, 2012 was a fruitful year posting biggest gain after 2009. BSE Sensex gained 26%, NSE Nifty 28% while my portfolio gained 30%. H

As at the end of the year, my most successful investments are in Wim Plast, Mayur Uniquoter, Astral Poly Technik, Hawkins Cooker and National Peroxide. These five stocks account for 95% of my total net gain (Unrealised gain/loss till date and realised gain/loss of 2012). All of them are in my top 10 holding in terms of current value as on 31st December 2012.

My worst Investments are in Opto Circuits, Ess Dee Aluminium, BHEL, Technofab Engg and TIL. These five stocks together swallowed 23% of my total gain (Unrealised gain till date and realised gain of 2012). Out of these, I sold Ess Dee Aluminium completely while I have considerable holding in BHEL and Technofab Engg. Loss on BHEL largely comes from shares I bought in 2010-11 and I have been buying it during 2012 which fared better. I have been buying Technofab last two years, but still at loss. I remain hopeful about the future of Technofab Engg.

In the year, my top 5 buys were BHEL, eClerx, Clariant Chemicals, Titan Industries and National Peroxide. Investments in some companies in which I had very marginal holding were completely offloaded. Top 5 in value sold are Mayur Uniquoter, Hindustan Zinc, NESCO, Tata Sponge Iron and HUL. All of them were partial profit booking and I currently hold a considerable number in some of these stocks.

As on 31st December 2012, my top ten holdings are Wim Plast, BHEL, Page Industries, Clariant Chemicals, National Peroxide, eClerx Services, Mayur Uniquoters, Astral Poly Technik, Hawkins Cooker and Titan Industries. These account for 49% of my total investments.

As the quarterly results will be coming out in coming months, a review of the investments becomes imminent.

What’s your best and worst?


11 companies for my portfolio!

For the last couple of months, I have been working to filter out companies in my portfolio to reduce the number of companies from the 54 to 20 or 30.  To find out the ones that I want to keep, I put all my companies to a quantitative test with investment criteria of Benjamin Graham, Kenneth Fisher and Martin Zweig as I mentioned in one of my recent posts.  I decided to keep those companies that pass any one of these three filters – and I got just 11! As usual, I am sharing with you what I found.

1. Opto Circuits

It is a technology company catering to healthcare industry. A multinational medical device company head-quartered in India and its products are used in about 150 countries.

Its revenue have been growing consistently every year for the last 10 years. Last four quarters also have shown impressive growth. Its EPS have grown at an impressive compound annual growth rate of 33% over the last five years.

Its debt equity ratio at 65% and not so healthy cash flows are points to be cautious!

2. Astral Poly Technik

Astral Poly Technik is a manufacturer of PVC plumbing systems. It has the license of Lubrizol of USA, equity joint venture with Speciality Process of USA and tie-up with many international names.  Its corporate clients include big names across various industries! Its products cater to the domestic and industrial applications.

Its revenue have been growing consistently every year for the last 10 years. Last four quarters have shown impressive growth. Its EPS has grown at an impressive compound annual growth rate of 32% over the last five years.

Its debt equity ratio is moderate at 27% but its cash flow is not very healthy.

3. Page Industries

Page Industries Ltd. is the exclusive licensees of JOCKEY International Inc. (USA) for manufacture and distribution of the JOCKEY® brand Inner-wear/Leisurewear for Men and Women in India, Sri Lanka, Bangladesh, Nepal and UAE.

Its revenue has been growing consistently every year for the last 10 years. Last four quarters have shown impressive growth. Its EPS has grown at an impressive compound annual growth rate of 36% over the last five years.

Its debt is huge at a debt-equity ratio of 93%  and its cash flow is also not very healthy.

4. Technofab Engineering

A 40 year old engineering and construction company, serving the Power, Industrial and Infrastructure Sectors, by executing comprehensive balance of plant (BOP) and auxiliary systems on a complete Turnkey EPC basis.

It is clearly a cyclical play which is affected by economic cycle and government policies due to its dependence on power and infrastructure sectors.

Its revenue have been growing consistently every year for the last 6 years. Last four quarters also have shown impressive growth. Its EPS has grown at an impressive compound annual growth rate of 91% over the last five years.

Its debt is moderate at a debt-equity ratio of 11%  and its cash flow is not very bad.

5. Clariant Chemicals

Clariant Chemicals (India) Limited is one of India’s leading specialty chemicals companies and is the No. 1 player in Pigments, Textile Chemicals, Leather Chemicals, Biocides for Paints. Its products cater to the wide range of industries.

Its revenue growth in the last few years are not very impressive and  last four quarters also have shown muted or negative growth. Its EPS grown at an impressive compounded annual growth rate of 31% over the last five years.

Its is a zero debt company. Its cash flow is not very impressive and cash and cash equivalent in the balance sheet has been coming down in recent years.

6. Hinudstan Zinc

Hinustan Zinc is India’s largest and world’s second largest integrated producer of zinc & lead, with a global share of approximately 6.0% in zinc. Hindustan Zinc is a subsidiary of the NYSE listed – Sterlite Industries (India) Limited  and London listed FTSE 100 diversified metals and mining major – Vedanta Resources plc. Its core business comprises of mining and smelting of zinc and lead along with captive power generation. It has four mines and four smelting operations in India.

Its revenue have been growing consistently every year for the last 10 years except a dip in two years – 2008 and 2009.  Last four quarters have shown impressive growth. Its EPS has grown at an impressive compound annual growth rate of 35% over last 10 years.

It is a zero debt company and its current ratio is 3.01! It has been paying dividend in all of the last 10 years.

7. Mayur Uniquoters

Mayur Uniquoters is manufacturer of PVC Vinyl. Its major clients are from Auto-mobile and footwear industries.

Its revenue have been growing consistently every year in the last 10 years. Last four quarters also have shown impressive growth. Its EPS grown at an impressive compounded annual growth rate of 65% over the last five years.

Its debt is moderate with a debt-equity ratio of 13%  and its cash flow is not very bad.

8. Wim Plast

Wim Plast manufacture plastic moulded furniture and bubble guard extrusion sheets in the brand name of Cello.

Its revenue have been growing consistently in the last 5 years.  Its EPS grown at an impressive compounded annual growth rate of 74% over the last five years.

It is a zero debt company and its cash flow is also healthy.

9. Mphasis

An IT company delivering Applications services, Infrastructure services, and Business Process Outsourcing (BPO) services globally serving clients across a wide range of industries.

Its revenue have been growing consistently every year in the last 7 years. However its last four quarters results were disappointing. Its EPS grown at an impressive compounded annual growth rate of 60% over the last five years.

It is a zero debt company and its cash flow is healthy.

10. National Peroxide

National Peroxide Limited manufactures Chemicals “Hydrogen Peroxide”, “Sodium Perborate” and “Per Acetic Acid”. NPL, a pioneer in India for peroxygen chemicals, is the largest manufacturer of Hydrogen Peroxide in India. Hydrogen Peroxide is a highly versatile chemical used in various industries for bleaching, chemical synthesis, environmental control/effluent treatment, sterilisation etc.

Its revenue have been growing consistently every year in the last 5 years except a dip in 2010. However the sales were down in the June 2011 quarter. Its EPS grown at an impressive compounded annual growth rate of 62% over the last five years.

It has no significant debt with a debt equity ratio of 7% and has an healthy cash flow.

11. Voltas

Voltas Limited offers engineering solutions for a wide spectrum of industries in areas such as heating, ventilation and air conditioning, refrigeration, electro-mechanical projects, textile machinery, mining and construction equipment, materials handling equipment, water management & treatment, cold chain solutions, building management systems, and indoor air quality.

Its revenue have been growing consistently every year in the last 10 years. However growth in last four quarters were not consistent and was low. Its EPS grown at a compounded annual growth rate of 25% over the last five years at 31% over 10 years.

Its debt position is low with a debt equity ration of just 7% and has a healthy cash flow.

 

Weekly Portfolio Review: 11 December 2010

Concern of interest rate hike amid rise in food inflation and intensified probe into the 2G scam affected stock market negatively in the last week. Report of strong industrial production growth published on Friday helped to regain some of the loss of preceding three days. During the last week, Sensex lost 2.29% to 19,509 and Nifty 2.26% to 5,857. My portfolio lost 1.64% in the month to date.

Good buys in my watch list

Script Sector 3 Years Target Current Price Expected Margin
Graphite India Engineering 200.00 97.15 106%
Swaraj Engines Auto Ancil 850.00 474.65 79%
Tractors India Ltd Construction 1,150.00 664.75 73%
HUL FMCG 445.00 295.45 51%
BHEL Engineering 3,567.00 2,278.00 57%
NTPC Power 293.00 192.20 52%
Hindustan Zinc Metal 1,730.00 1,150.80 50%

I will be buying Swaraj Engines, Tractors India, HUL and Bhel in the coming week. Graphite India is in my top 5 holding.

News Update

Public sector undertaking NTPC today signed a power purchase agreement with Punjab State Power Corporation Ltd (PSPCL) for 2,640 MW coal-based thermal power project at Gidderbaha for Rs 15,000 crore. The plant consists of four units of 660 MW each, which would be entirely funded by NTPC. – The Economic Times, 11 DEC 2010

Country’s largest power producer NTPC has earmarked a whopping Rs 1,50,000 crore investment for sourcing equipment for its power projects in the next fiscal, the deliveries of which will be made over five years – The Economic Times, Dec 8, 2010

The board of state-run Bharat Heavy Electricals Ltd (Bhel) board has approved the company’s plan of starting a non-banking financial company (NBFC) to finance power projects, said B.S. Meena, secretary, department of heavy industries (DHI). Bhel plans to apply for a licence from the Reserve Bank of India. – Livemint, 10 DEC 2010

The Munjals of Hero Group have initiated talks with lenders to secure bridge financing for the buyout of its Japanese joint venture partner’s equity in Hero Honda. – Times of India, Dec 10, 2010

B.M Munjal promoted Hero group will buyout the Japanese partner Honda from the world’s largest two wheeler producing venture, a deal for which would signed this month. After months of negotiations, Hero group is believed to have reached an agreeemnt to acquire 26 per cent stake of Honda in the 26 year old joint venure but it is not clear at what price. – Economic Times, Dec 8, 2010

The country”s largest two-wheeler maker Hero Honda today said it has hiked the prices of its models in the range of Rs 500- Rs 1500 to offset the rising input costs. – The Economic Times, Dec 8, 2010

The Hero Group is in the process of scouting for technology partners in Europe and South East Asia given that the company has reached an agreement with Honda Motor Co to end its partnership in producing motorcycles. The technology agreement between Hero and Honda for bikes expires in 2014.  – NDTV, Dec 7, 2010

Opto Circuits India has announced that Cardiac Science Corporation, the wholly owned subsidiary of the company and a global leader in automated external defibrillator (AED) and diagnostic cardiac monitoring devices, added two electrocardiographs (ECGs) under its Burdick brand, known for its accuracy, reliability, and ease of use. The ECGs, available only in the US, deliver built-in, bi-directional communication so customers can connect to leading EMRs. – India Infoline, Dec 10, 2010

Andhra Pradesh-based Amara Raja Batteries on Friday said that it is scouting for locations to set up a new manufacturing unit in the Northern part of the country which is likely to be operational by 2012.

Amara Raja Batteries Ltd, the technology leader and one of the largest manufacturers of lead acid batteries in India, today unveiled Amaron Volt TM, a specialized storage battery for the Indian telecom industry in the era of 3G & BWA enabled Data driven market and Mobile Internet.  Availability of assured source of Green Energy even in rural and harsh outdoor conditions is what Amaron Volt TM offers. Amaron Volt TM, a 2V high integrity series product is the latest VRLA offering from Amaron Hi Life range to meet the emerging demanding applications requirement of reliable backup power in Indian telecom market. – Business Standard, Dec 10, 2010

Electric vehicle-maker, Mahindra Reva Electric Vehicles , today launched its Revai priced at Rs 3.10-lakh (ex-showroom Pune) and is targeting tripling its sales in the next 12-18-months. – Economic Times, Dec 10, 2010

GAIL India has proposed to set up 5,500 km of gas connectivity over the next two-three years investing USD 4 billion, a senior company official said today. Economic Times, Dec 10, 2010

State-owned Gas Authority of India (Gail), the country’s largest gas transmission and marketing company, has launched 10-year bond issue to raise funds at an upper cap of 8.9% per annum. The issue, which opened on Tuesday, has got close to Rs 1,000 crore bids between 8.85 and 8.89%. According to distributors, the firm has been negotiating with arrangers for the past few days to raise funds at not more than 8.8%. However, with the cost of funds inching up, it could not get commitment from the arrangers. Interestingly, even at this rate, arrangers were not willing to underwrite the issue on their books. – The Economic Times, Dec 8, 2010

Telecom giant Bharti Airtel Friday launched its IMEWE (India-Middle East-Western Europe) cable system, an ultra high capacity fiber optic submarine cable system to deliver better connectivity requirements of Middle East and European countries to Asia transiting through India. ‘IMEWE will open a second gateway for Airtel’s customers to the European market from Asia via Mumbai,’ the company said in a statement. – Economic Times, Dec 10, 2010

Developing a technology that may change the way the world approaches cancer, Biocon Limited, in collaboration with a US-based research company, is working on creating a “therapeutic vaccine” that will help the body activate the immune system to fight cancer on its own. – DNA, Dec 7, 2010

Agri machinery maker Mahindra & Mahindra today announced a tie-up with Italy based farm equipment company Maschio-Gaspardo S.p.A for getting supply of a complete range of rotary tillage equipment. As part of this agreement between Maschio and Mahindra AppliTrac (part of Mahindra & Mahindra’s farm equipment sector) the Italian company will manufacture rotovators. This will be bearing the Mahindra brand name which will be available through both Mahindra and Swaraj dealerships. Maschio will also manufacture other kinds of rotary tillage equipment for planting, seeding, crop care and crop residue management for Mahindra AppliTrac – The Economic Times, Dec 4, 2010

Interesting Read

Pharma companies line up for clinical trials

Signalling a growing interest in new drug discovery research, some major Indian pharmaceutical firms had applied for conducting clinical trials on at least 12 new drugs in 2010. The most sought therapeutic area is cancer. The numbers are the highest ever in the history of domestic drug discovery initiatives triggered by companies such as Dr Reddy’s and Ranbaxy over a decade ago. http://www.business-standard.com/india/news/pharma-companies-linefor-clinical-trials/417751/

Input, ad costs put pressure on FMCG cos

Several mid-sized fast moving consumer goods (FMCG) companies such as Godrej Consumer Products , Dabur India , Marico and Emami have outperformed their larger multi-national peers over several quarters during the year. Acquisitions abroad and consumers’ shift from high-priced premium products to low-priced mass-market products have helped the companies post good performances. But results of the quarter to September indicate that this stand-out performance could be difficult to sustain. http://economictimes.indiatimes.com/news/news-by-industry/cons-products/fmcg/Input-ad-costs-put-pressure-on-FMCG-cos/articleshow/7068767.cms

Labour shortage in the fields drives farmers to tractors

Pawan Goenka noticed something unusual last year—tractor sales were climbing even though India had its worst monsoon in more than three decades and farm output dropped 2.8% in the three months to December last fiscal. The umbilical cord that tied rainfall patterns and tractor sales seemed to have been ruptured. The president of auto and tractor maker Mahindra and Mahindra Ltd offers an interesting explanation to this puzzle: growing labour shortages in rural India are encouraging farmers to mechanize operations. “The traditional model of predicting growth in the tractor market was only linked to the monsoon and didn’t factor in labour shortages,” says Goenka. http://www.livemint.com/2010/12/06233536/Labour-shortage-in-the-fields.html?atype=tp

Cement loosens grip again

With a meaningful demand recovery expected only around mid-CY11, analysts expect the demand-supply mismatch to prevail and stocks to underperform broader markets in the near term. After a superlative performance in October, when the overall dispatches of the cement industry grew over 18 per cent, the sector has taken a beating in November. In fact, on a sequential basis, the top five cement players have reported a 19.8 per cent drop in combined dispatches, indicating that demand is yet to pick up sufficiently to support prices. While analysts expect a demand recovery by mid-CY2011, most of them currently have a neutral to bearish view on the sector, as the valuations are not cheap. http://www.business-standard.com/india/news/cement-loosens-grip-again/417364/

What next for cement stocks?

The July-September quarter was the worst for the cement industry in the recent down cycle. Sales were unimpressive. Profits fell sharply. Every variable played spoil-sport. The extended monsoons dampened demand as construction activity remained poor. Despatches were further curtailed by unavailability of wagons and shortage of labour. Overhang of excess capacity reduced realizations. Correspondingly, an upsurge in raw material prices hindered profitability. The October-December quarter is expected to bring some relief. The month of October witnessed a sharp rebound in production and despatches. This is a normal trend after a dull monsoon season. Cement realizations also improved significantly. Fear of price hikes led dealers to build-up their inventory. http://www.equitymaster.com/detail.asp?date=12/7/2010&story=4&title=What-next-for-cement-stocks

BHEL adopts strategy to venture into newer areas

Bharat Heavy Electricals Ltd (BHEL), the country’s biggest power equipment company, has adopted a policy of forming joint ventures and concluding technical tie-ups for venturing into newer areas of business. While parking of surplus funds in productive activities is one driver for the approach, attention on diversification and risk sharing seems to be the theme behind all such collaborations. The company has a cash surplus of Rs 10,000 crore. It has floated joint ventures (JVs) and technical tie-ups or started preliminary exercises for entry into nuclear equipment, wind energy, specialised grade steel, transmission, transportation and water treatment businesses. http://www.business-standard.com/india/news/bhel-adopts-strategy-to-venture-into-newer-areas/417525/

Hero may have to play on Honda terms after break-up

Hero Group is believed to have won rights to use the Honda brand till 2014-end. As the final draft of separation between the Hero Group and Honda Motor Company gets readied, concerns are being raised on the Indian company’s ability to promote and sell its indigenous products in the long term, while managing the added burden of royalty payouts to the Japanese company. http://www.business-standard.com/india/news/hero-may-have-to-playhonda-terms-after-break-up/417263/

My Portfolio

Return

My Portfolio BSE Sensex NSE Nifty
This Week -2.35% -2.29% -2.26%
This month -1.64% -0.08% -0.10%
This Year 7.24% 11.70% 12.62%
Since 1-1-2009 119.59% 102.23% 97.95%
Since 1-1-2008 47.59% -3.45% -3.66%
Since 1-4-2007 83.36% 49.24% 53.27%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 8 3 Years 89
Graphite India Telecom 6 2 Months 1
KSB Pumps Engineering 5 3 Months -13
Mangalam Cements Cements 5 3 Months -17
Maharashtra Seamless Metal 5 4 Months -5

Shares I bought this month

Company Average Cost
Tata Sponge Iron 368.41
Graphite India 95.62

Shares I sold this month

Company Average Price

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 208 2.6 Years
Dabur India 143 4.6 Years
Tata Global Beverages 107 2.0 Years
Berger Paints 127 3.8 Years
Infosys 89 3.0 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
KSB Pumps -12 3 months
Honeywell Automation -14 1 month
Tata Communication -26 11 months
Mangalam Cement -17 2 months
Divi’s Laboratories -14 1 month

Archive of previous portfolio reviews


Weekly Portfolio Review: 3 October 2010

BSE Sensex closed the week 1.87% higher and NSE Nifty 1.88% and my portfolio gained 1.58%. When the three quarters of 2010 passed, return on my portfolio stands at 14.73%. In the year 2010, the 68% of my gain came from the 5 companies – Gujarat Gas, Infosys, Tata Global Beverages, HUL and Dabur India. Top 5 companies in my holding are Infosys, Tata Global Beverages, Bharti Airtel, HUL and Hero Honda.

Good buys in my watch list

Script Sector Target PoR CMP Margin
Mangalam Cement Cement 400.00 204.00 160.25 150%
Graphite India Engineering 200.00 79.00 92.65 116%
Swaraj Engines Auto Ancil 850.00 428.00 423.40 101%
Ess Dee Aluminium Packaging 942.00 490.00 492.45 91%
Divis Laboratories Pharma 1,094.75 755.00 702.30 56%
Hindustan Zinc Metal 1,730.00 1,203.00 1,110.70 56%
Opto Circuits Healthcare 450.00 316.00 301.00 50%

News Update

Mahindra and Mahindra

Mahindra and Mahindra Ltd (M&M), India’s largest utility vehicle maker by unit sales, on Thursday made its entry into the competitive motorcycle market by unveiling two models—the 106cc Stallio and the 300cc Mojo. The entry-level Stallio, priced at Rs. 41,199 (ex-showroom, Pune), will compete with Hero Honda Motors Ltd’s Splendor and Bajaj Auto Ltd’s Discover, among others. The Mojo, aimed at the premium luxury segment, will cost Rs. 1.75 lakh, (ex-showroom, Pune). M&M has 370 sales outlets for two-wheelers, and is expected to increase the network to 400 by October. –  Livemint.com 30 September 2010

Auto-maker Mahindra & Mahindra reported its highest ever sales in a month at 35,177 units in September, an increase of 23.71 per cent over the same period last year. Total sales of M&M utility vehicles, including Scorpio, Xylo, Bolero and Pick-Ups, stood at 16,537 units as against sales of 15,296 units in September 2009, up 8.11 per cent. Sales of the Logan sedan went up by 96.08 per cent to 1,000 units during the month, compared to 510 units in the same month a year ago. The company said sales of three-wheelers and Gio and Maxximo mini-trucks during September jumped by 40.90 per cent to 6,005 units from 4,262 units during the same month last year. – The Indian Express, 01 October 2010

Auto major Mahindra & Mahindra on Monday said it will raise prices of its all products by up to Rs 8,000 with effect from October 1 due to higher raw material costs and implementation of new emission norms. “This increase would be in the range of Rs 3,000 to Rs 8,000 depending on the model and will be effective from October 1, 2010,” Mahindra & Mahindra said in a statement. – The Times of India, 27 September 2010

Hero Honda

The country’s largest two-wheeler maker Hero Honda today reported a jump of 8.06 per cent in sales in September at 4,33,641 units. Besides, for the 5th consecutive time, the company has recorded more than 4 lakh dispatch sales in a single month. – Business Standard, 01 October 2010

The country’s largest two-wheeler maker, Hero Honda Motors Ltd, today launched a new version of its biggest selling motorcycle, Splendor, priced at Rs 39,950 and Rs 41,950 (ex-showroom Delhi). The new bike, Splendor Pro, has features such as a power start and a new engine and comes in two variants, the company said in a statement. – The Hindu, 27 September 2010

Dr Reddy’s Laboratories

Dr Reddy’s Laboratories expects U.S. revenue to more than double to about $1 billion by fiscal 2013 and is planning to expand its presence in emerging markets like Russia. Dr Reddy’s, India’s No. 2 drug maker by sales, plans to consolidate in Russia by acquiring more prescription generic drugs. – Reuters, 29 September 2010

Hindustan Unilever

Hindustan Unilever (HUL) has forayed into the retail cafes segment to promote its beverages and food brands, in a significant brand extension to capitalise on the increasing trend of eating out. The FMCG major is test-marketing ‘Lipton Cafes’ and kiosks across the education, travel, corporate and leisure channels in key cities. While it is principally a beverages business, the cafés also sell other HUL products like soups. They also offer food items like pastries and cakes at locations in airports and malls. Currently, HUL has over 40 Lipton Cafes (with seating arrangement) and kiosks as pilot models in India. – The Financial Express, 29 September 2010

Suzlon Energy

Suzlon Group Company, REpower Systems, wind turbine manufacturer, said on Wednesday it signed a contract with German wind farm project developer Denker and Wulf AG, to set up, operate and maintain wind power plants with the capacity of generating 74.8 megawatts of power. The 74.8 megawatt (MW) project will be constructed by 2012. The contract includes a 15-year integrated service package, which covers project servicing and maintenance, in addition to delivery and installation of the turbines. – International Business Times, 29 September 2010

Indian wind turbine maker Suzlon Energy is in talks to buy the remaining nine percent stake in German unit REpower Systems AG, its chief financial officer said on Monday. – Reuters, 27 September 2010

Opto Circuits India Ltd

Opto Circuits India Ltd. plans to spend 7.5 billion rupees ($167 million) over three years to set up two medical equipment factories in India and Malaysia as the global incidence of diabetes and heart disease rises. People are becoming more aware of lifestyle diseases, said Vinod Ramnani, managing director at Opto Circuits, India’s largest domestic medical equipment maker. “That is the main driver” for growth, he said. – Bloomberg, 30 September 2010

Interesting Reading

M&M is not a conglomerate; it’s a federation

In an interview, Mahindra answers critics who say M&M is spreading itself too thin by entering too many areas—two- and three-wheelers, tractors, utility vehicles, cars, light commercial vehicles, trucks and even aeroplanes, and offers insights into his leadership style. http://www.livemint.com/2010/09/29205723/MampM-is-not-a-conglomerate.html?atype=tp

Mahindra & Mahindra: The Italian job

Mahindra & Mahindra is set to launch its range of motorbikes by this month-end. It had launched scooters last year, leveraging its Kinetic purchase. With incumbents well-entrenched in the market, Mahindra & Mahindra has started on an offensive even before the launch. “It had to go aggressive with a bevy of bikes because it has to break the clutter,” says PricewaterhouseCoopers Leader (automotive practice) Abdul Majeed. http://www.business-standard.com/india/news/mahindramahindraitalian-job/409208/

Ess Dee set to take on Hindalco in household aluminium foils market

Ess Dee Aluminium, which acquired India Foils from Sterlite Industries in 2008, is poised to mark its maiden entry into the retail market for household aluminium foils, pitching it against the industry leader Hindalco Industries . Ess Dee’s foray into foils comes at a time when global aluminium giants, like Novelis, have decided to shut their foils unit in the UK and consolidate operations across Europe. Earlier, Alcoa too had divested Reynolds, its packaging and consumer business best known for the ‘Reynolds’ foil wrap. http://economictimes.indiatimes.com/news/news-by-industry/indl-goods-/-svs/metals–mining/Ess-Dee-set-to-take-on-Hindalco-in-household-aluminium-foils-market/articleshow/6550191.cms

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 1.58% 1.87% 1.88%
This month 1.58% 1.87% 1.88%
This Year 14.73% 17.06% 18.12%
Since 1-1-2009 134.91% 111.93% 107.62%
Since 1-1-2008 57.89% 1.18% 1.05%
Since 1-4-2007 96.16% 56.40% 60.76%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 10 2.91 Years 86
Tata Global Beverages FMCG 6 1.90 Years 131
Bharti Airtel Telecom 6 9 months 26
HUL FMCG 6 3 Months 21
Hero Honda Auto 6 4 months 0

Shares I bought this month

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 220 2.4 Years
Dabur India 174 4.5 Years
Tata Tea 131 1.9 Years
Berger Paints 175 3.6 Years
Infosys 86 2.9 Years

Top 5 most loss (absolute)

Company Return % Average Holding Period
Divis Laboratories -3 1 month
KSB Pumps -3 1 month
Graphite India -7 2 months
Swaraj Engines -2 2 months
Tata Communications -8 9 months

Archive of previous portfolio reviews


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.

Archive of previous portfolio reviews


Weekly Portfolio Review: 22 August 2010

BSE Sensex ended 1.29% higher and NSE Nifty 1.44% in the past week. During the month, Tata Communications, Berger Paints, Gujarat Gas, Biocon and HUl were top gainers and Suzlon Energy, Tata Global Beverages, NTPC, Maharashtra Seamless and Dr. Reddy Laboratories were top losers in my portfolio.

Good buys in my watch list

Company Sector 3 Years Target Current Price Expected Return
Mangalam Cement Cement 400.00 160.95 149%
Graphite India Engineering 200.00 97.50 105%
Swaraj Engines Auto Ancil 850.00 415.50 105%
KSB Pumps Engineering 1,072.00 575.50 86%
Maharashtra Seamless Metal 722.00 391.70 84%
HUL FMCG 466.00 269.00 73%
Bharti Airtel Telecom 510.00 310.15 64%
Hero Honda Auto 3,054.00 1,916.40 59%
Dr. Reddy Pharma 2,106.00 1,326.05 59%
Hindustan Zinc Metal 1,730.00 1,121.75 54%
NTPC Power 293.00 193.25 52%
M&M Auto 925.00 617.75 50%

–          Bharti Airtel announced that it has achieved Gold Certification from Cisco. With this, Bharti Airtel is the first Indian telecom service provider to achieve this certification. To earn Gold Certification, Bharti Airtel had to meet rigorous standards for networking competency, service, support and customer satisfaction set forth by Cisco. – expressindia.com

–          Bharti Airtel saw the highest number of shares (1.3 crore) being bought by the fund houses, while Reliance Industries witnessed the maximum number of shares (1.7 crore) being sold, said a report from Sharekhan.com. – The Hindu Business Line

–          Bharti Airtel has outbid Idea Cellular, Karbonn Mobile and Micromax to win the sponsorship rights of all international cricket matches (barring the world cup tournament) to be played in India for the next three years. – The Economics Times

–          Bharti Airtel has dialled its highly successful minutes-factory strategy, this time for Africa. Zain Kenya, a Bharti subsidiary, halved tariffs for both prepaid and postpaid subscribers. The move is said to have led to many Kenyans switching from Safaricom, the largest Kenyan telco with about 12 million subscribers, to Zain Kenya. – DNA

–          Bharti Airtel, India’s top mobile operator, signed up 2.6 million mobile subscribers in July, taking its total to 139.2 million subscribers. Vodafone Essar, the country’s third-largest mobile phone operator and controlled by Vodafone, gained 2.4 million subscribers in July to have a total of 111.5 million, the Cellular Operators Association of India said. – The Indian Express

–          Bharti Airtel announced plans to invest $ 10 million in its newly acquired telecom network in Seychelles. The company will also participate in the Seychelles East Africa submarine cable (SEAS) project. – The Economic Times

–          Dr. Reddy’s Laboratories Ltd. is in talks to enter Japan’s generic-drug market, company announced last week. Japan is the world’s second-largest pharmaceutical market.

–          Keeping religious sentiments and environmental concerns in view, a Group of Ministers (GoM) on Friday scrapped the NTPC’s controversial 600 MW Loharinag Pala hydel project on Bhagirathi river in Uttarakhand. – The Economic Times

–          The legal dispute between Reliance Industries (RIL) and NTPC over D6 gas may be heading for a truce, with Solicitor General Gopal Subramanium recommending that the country’s biggest power generator be given gas at a concessional rate under a provision of the production sharing contract (PSC). – Business Standard

–          NTPC-BHEL Power Projects, the joint venture between state-run BHEL and NTPC for making power equipment among others, is likely to rope in a global technology provider and may offer a minority stake, an NTPC official said on Wednesday. – The Economic Times

–          Keen to get gas for its plant, state-run NTPC may offer equity stake to Qatar Petroleum in its gas-based projects, a move that would allow the company an assured supply of fuel for operations. – The Economic Times

–          Indian utility vehicles maker Mahindra & Mahindra could benefit in the long-run from its pending acquisition of Ssangyong but investors are wary about the investments it will need to make in the Korean automaker and its recent foray into commercial trucks. Analysts feel multiple moves at the same time will be a drain on Mahindra’s cash flows and the stock could enter a phase of underperformance in the next 18 to 24 months. Mahindra & Mahindra (M&M), India’s largest tractor maker, plans to scale up its production capacity by over 60% in two years to cash in on the growing rural demand, according to a senior official. – The Economic Times

–          Riding on a successful launch of ‘Maximo’ mini-trucks, Mahindra & Mahindra is in the process of developing passenger vehicles and other variants on the same platform, according to Rajesh Jejurikar, Chief Executive, Automobile division. – The Hindu

–          Mahindra & Mahindra on Friday said it has received environmental clearance from the US authorities for its diesel pick-up trucks, a step which could bring it closer to launching the vehicle there

My Portfolio

Return (%)

My Portfolio BSE Sensex NSE Nifty
This Week 0.12% 1.29% 1.44%
This month 2.09% 2.99% 3.04%
This Year 8.01% 5.37% 6.34%
Since 1-1-2009 121.15% 90.75% 86.91%
Since 1-1-2008 48.64% -8.93% -9.03%
Since 1-4-2007 84.67% 40.77% 44.72%

Top 5 holding in my equity portfolio

Company Sector % of Total Value Average Holding Period Absolute Return %
Infosys IT 13 2.75 Years 66
Tata Global Beverages FMCG 8 1.75 Years 109
Bharti Airtel Telecom 8 8 months 7
Gujarat Gas Energy 5 2.30 Years 178
HUL FMCG 6 2 months 9

Shares I bought this month

Company Average Price
Graphite India 98.85
Mangalam Cement 158.20
KSB Pumps 562.95
Swaraj Engines 434.00

Top 5 most gain (absolute)

Company Return % Average Holding Period
Gujarat Gas 177 28 months
Dabur India 159 40 months
Tata Tea 109 21 months
Berger Paints 128 42 months
Infosys 66 36 months

Archive of previous portfolio reviews