My Portfolio and One Stock I Should Offload

I want to share my portfolio with you and ask if I have to offload one stock from my portfolio, which one will you select for me and why?

If I am convinced with your WHY, I will definitely offload it.



Let me know your why by replying here. Please provide details so I can understand the reason as to why you think I should sell the stock.

Again, the reason I am asknig to sell is I think I have a better opportunity in the market. You can see my reasons for sell in the market here



So start researching my portfolio stocks and convince me the stock I should be selling.

 

Thanks and I have so many emails for RBA as it is loss making and others saying my over exposure to pharma as a sector.

 

I really liked your detail analysis of every stock and so let me give you detailed reply on each of your point

1) low interest coverage - Yes I agree on this point completely. However, when companies want to grow very fast (3x in 5 yearish), they have to take on the risk of leverage. Still, I think the growth will help them pay the debt off.
2) Promoter holding decrease (but FII holding increase) - They acquired Indonesia business. Again, want to grow very fast.
3) Not yet proven the growth - I disagree because they are showing SSSG as well as expanding the stores and are profitable at the operating as well as cash levels. Its the depreciation that makes them as loss making.
4) It could be a multi-bagger. But purely based on the current numbers and results, it is the least preferable in your list. - Completely agree on this part but it is under 5% allocation of my portfolio and that is high risk that I am willing to take for better returns. At least that is what I think. I could be wrong but with little allocation to high risk can help portfolio perform to the level I want to be performing.
5) Can it give enough competition to Devyani and Jubilant? That means it is not monopoly. - Not completely a monopoly but in the age of technology, you can build a monopoly based on tech only. I think so they are building one by expanding all over India because then they can target customers and offers to make better sales but it is still to be seen.

I don't think Pidilite is in chemicals correct though it is classified that way. So clean Sc, PI and Fine are good allocation to chemical as a sector.

Pharma, I agree but then valuation are so compelling that I don't want to offload now.

- It has reached its saturation point I feel. - I don't think so. The products that it manufactures has a very long way to go. No one else is still able to make them that efficiently.
- will it continue to growth as before? Can it continue to produce new APIs successfully and consistently? - Why not? Just because the price of the share has moved from 700 to 3500 doesn't mean it can't do it again.
- PAT results are not that good. It is shown in the stock price. - Nope. You are biasing your views based on pricing. All time high PAT but market now expects it has topped out. I think it has topped our for a year because of high demand for COVID.
- Can Supriya be a better bet in terms of growth? - I don't think so. I am in fact planning a switch from SUPRIYA to DIVIs but not doing it because the valuation of SUPRIYA is even more compelling than DIVIS. Business wise I still believe, the EPS of Supriya from 18 to 36 will take more time than DIVI to reach from 111 to 222. Price wise, SUPRIYA can do better but I may switch if I find compelling valuation on either of them.

Price wise, I don't think it is better to decide if we want to book out of a business or not. EPS and earnings are good point and both I think can double in the next 3 to 4 years time. Some may take a few months more and others may take less.

 

I really like the approach but still clean science has not passed a lot of time in portfolio and so it shows more red

 

The stock that I finally offloaded is Relaxo.

There is too much competition that is getting into the footwear industry with Campus Activewear and Metro Brands. I am not too sure if only being a large mass producer like Relaxo has any edge now. I may be proved wrong but seeing the last 4 quarters as well as technicals, I get the sense it will be tough road ahead for Relaxo. Moreover, even if Relaxo manages to held its leadership position, it will be slow growth company.

So hence when you are looking to sell, you should consider the environment and the competition. That is what I have shared in the video here



As well as in the article here https://shabbir.in/sell-stock/

Further, I have a great high growth company and so I bought 650 units of Stylam Industries at around 1155 levels. I expect its growth to be much higher than Relaxo.

I am still investing in the market and I added more position than I sold but soon, I will become a little lighter in the market.

 

Supriya is trading at much lower price to earnings as compared to Divis.

Now see the earnings call of Supriya of Aug 2022 (https://www.bseindia.com/xml-data/corpfiling/AttachHis/cec37817-13e4-4ed4-bc95-342536ee3222.pdf) on Page 15 of 19. You can see they talk about revenue double in 5 years from 500 crores now to 1000 crores. Actually 3 years is what investors want but some regulations and approvals and so they will do it in FY2627

For Divis it has been in range of 3 to 4 years to double the revenue. So I think Divis EPS will double faster than Supriya. However, for 5 year doubler, the current PE ratio may be low and market may give it higher PE ratio going forward and so it may appreciate in price more than Divis.

Hope I am clear now.

Look at past few years sales growth and profit growth for both in screener.in. It will help you understand that Stylam is doing better. Further, there are less players in laminate sector than in footwear. So the growth is expected to continue for Stylam but for Relaxo, I have doubt it can grow at 20%. 10 to 15% is more likely scenario.

Business analysis.

Glad you like them.

That is the whole point. I want to be helping people learn what I have learned and if I can even help a few people, that is more satisfying than anything else.

I always like to say that I want to be earning from the market than trying to earn from my blog readers.