SEBI (Research Analyst) Registration Number: INH200004471


19 July 2017

Q1FY18: Portfolio Performance


In this post, we highlight the performance of the portfolio for the quarter ended 30th June, 2017. Going forward, we will be documenting our portfolio performance on a quarterly basis for the benefit of our readers and those who are interested in knowing the performance of our advisory service.

Performance

For this quarter, our base date is 1st March, 2017. So effectively Q1FY18 also includes March, 2017 which means that we are presenting before you a 4 month performance.

Q1FY18 was a good start to the financial year with a 15.12% return on the portfolio. Our portfolio has out-performed the broader market (Nifty 50) by 8.69% in this quarter. The NAV chart is given below.

Portfolio
Our portfolio principles are:
  • Hold not more than 15 companies in the portfolio
  • Keep churn as low as possible
  • Monthly and quarterly tracking of news and results
  • Regular interaction with management to stay abreast of latest developments
  • Allocate between equities and debt based on broader market valuations
  • Double the portfolio every 3 to 4 years
The portfolio currently has 11 stocks with the largest stock having a 12% weightage. The portfolio at this juncture is majorly focused on midcaps and smallcaps with the largest company in terms of market capitalization being smaller than Rs 15,000 Crores.
There is a significant cash reserve in the portfolio which has been parked in 8% to 9% yielding debt funds for the time being. We are looking out for opportunities to deploy this cash but due to the frothy valuations, opportunities are few and we are not going to take investment decisions just out of the mere need to deploy cash. We are able to out-perform the market with this conservative portfolio.
We have a wide range of sectors ranging from Housing Finance, Personal care, Jewellery, Pumps, Pistons and industrial goods to name a few. We are strongly focusing on consumer driven industries and remain market-cap agnostic (Open to giant, large, mid and small caps). On a valuation basis, none of our holdings look over-valued and we expect significant gains going forward from them.

The above chart only shows the distribution of our equity portfolio. The debt-equity allocation is available only to clients.

Drawdown

This quarter didn’t see any major drawdown. Infact, we just had one week of negative returns. This in no way should be taken as guidance for future portfolio performance.