Rakesh Jhunjhunwala’s holdings as on 30th September’09

This is just a small brief on what the Big Bull bought/sold the last quarter.

He bought 1,54,500 shares of Lupin, 1,37,105 shares of Titan Industries, 6,00,000 shares of Karur Vysya Bank, 203000 shares of Rallis India and 8,00,000 shares of Geometric in the quarter ending September’09.

He sold 19575 shares of Bilcare. This is his second consecutive quarter of selling in Bilcare.

No change in holdings in Crisil, Punj Lloyd, Pantaloon Retail, Geojit BNP, Praj Industries, Zen Technologies and Nagarjuna Constructions. Not all the companies have disclosed the shareholding pattern.

Wish you a very Happy Diwali. Don’t expect markets to go up by 90% again by the next Diwali though the bull market remains intact ! Avoid Index stocks and buy quality midcap stocks.

Sanjoy Bhattacharya’s Views and Stock Picks

Sanjoy Bhattacharya, Partner, Fortuna Capital who advises an hedge fund “Aristos”, write a column for Forbes India. Here are the links of the article he has written till now. It makes for an interesting reading. He is very much focussed on “high ROCE” companies. I have seen him at the Myiris Investor show twice and I quite agreed to the point he made there.

The Myth of Fair Value

The Letdown and After

Stray Where You Are

When Pigs Take Wing

Aristos Fund posted a gain of 7.26% in July compared to 8% gain by Index and the Fund is up by 39.4% year to July.

Random Thoughts on Markets

Positive signals coming in from the Govt. Divestment, National Unique Identity programme, Direct Tax Code 2009, etc. But reforms on Insurance and Pension still pending. 3G auction pending. These remain the key triggers.

Two Index heavy-weights stocks (RIL and Bharti Airtel) are  facing unknown events. Any positive news on these will take markets higher.

FII inflows till date have been around $6-7bn. India can see inflows back to the FY08 levels or even more i.e $15bn-18bn. Big Boy of Dalal Street LIC can’t increase stake in most of the Index companies while most of the FII inflows have been coming through Exchange Traded Funds. Rupee could trade at 42-43 levels by the end of FY10.

Monsoon impact on earnings should be marginally negative.  FMCG companies should pass on the increase in prices to the consumer while Autos should continue to benefit from low interest rate regime.

Low base effect will make sure that every headlines sound like “Ahead of expectations”.

Fiscal deficit not a major concern as long as there is an improvement in the global economy. Finance Ministry has considered crude @ $80 while calculating subsidies. However, its diificult to take a call on the outlook for crude oil.

Demand for Real-estate is highly dependent on the IT sector. There is no major recruitment in the IT sector yet so it is difficult to see the demand coming back to 2007 levels in the near future while low interest rates might offset the same to a greater extent. What happens when the interest rates go up remains to be seen.

Impact of global inflation and rollback of stimulus package remains to be seen. This could turn out to be risks on the downside.

Rakesh Jhunjhunwala’s Multibaggers !!

I have tried to find out when did the Ace Investor Rakesh Jhunjhunwala first bought a stock and at what (Average) price, adjusted for bonus issue and stock split through the BSE Shareholding pattern and BSE Historical prices data. BSE doesn’t disclose holdings less than 1% so its very likely that he must have bought some stocks earlier and subsequently raised it to more than 1%. In bracket is the multibaggers he is making at CMP (as of today). Considering his acquisition price, the dividend yields on most of his stocks is as high as 20% !!!

Crisil was bought in the March’02 quarter when the stock was trading at an average price of 250 (16 bagger) .

He bought Titan in the June’02 quarter when the stock was trading at 65. At the Myiris.com Investor meet two years ago, Jhunjhunwala mentioned he bought Titan at 40 which means he bought Titan before the June’02 quarter (30 bagger)

RJ first bought Lupin in the Dec’02 quarter when the stock was trading at 60 (15 bagger)

Pantaloon was bought in the Sept’03 quarter when the stock was trading at 22. Rights issue excluded (15 bagger)

Nagarjuna Construction was bought in the March’04 quarter when the stock was trading at 16 (9 bagger)

Praj Industries was bought in the March’04 quarter when the stock was trading at just Rs 4.5 (21 bagger)

Bilcare was bought in the March’04 quarter at 125 (3 bagger)

Geojit BNP Paribas was bought in the March’05 quarter at 7.5 (almost 6 bagger)

Punj Lloyd was bought in the March’06 quarter at 210 (No bagger here)

Karur Vysya Bank was bought in the June’06 quarter at 275 . Rights issue of 1:2 in 2006 excluded. (No bagger here)

Rakesh Jhunjhunwala’s holdings as on 30th June’09

This is just a small brief on the shares Ace Investor Rakesh Jhunjhunwala bought/sold in the June quarter. I may request readers to do their own homework before blindly copying his portfolio.

He bought 1,07,200 shares of Lupin, 7,00,000 shares of Nagarjuna Construction, 2,44,838 shares of Rallis India, 2,00,000 shares of Praj Industries and 2,85,000 shares of Hindustan Oil Exploration.

He sold 50,000 shares of Karur Vysya Bank, 27,000 shares of Titan Industries and 2500 shares of Bilcare.

No change in holdings in Crisil, Punj Lloyd, Pantaloon -DVR, Geojit BNP Paribas, Geometric,  Prime Focus, Zen Technologies and Mid-day Multimedia. Due to equity dilution in Pantaloon Retail, RJ’s holdings in Non-DVR Pantaloon might have come down to below 1% and hence it is not disclosed in the Shareholding pattern.

My observations: He increased his holdings in Lupin for the second consecutive quarter while he sold some Titan Industries in the last two quarters. My estimate is that he bought stocks worth Rs 35crs during the June quarter.

Disclosure: I hold Lupin and Punj Lloyd.

Rakesh Jhunjhunwala: A long-term Bull Run!

A column written by the Ace Investor in Business Today dated 28th June’09.

Click here to read the article.

Quality Stocks: Companies with ROE & ROCE of over 30%

I have compiled a list of quality stocks which one can look at based on earnings growth and return ratios (FY09) . I have excluded FMCG and Banking from the list.

Amara Raja Batteries (CMP: 92)

Ahluwalia Contracts (CMP: 87)

Bajaj Electricals (CMP: 400)

Blue Star (CMP: 342)

Crisil (CMP: 3412)

Divis Labs (CMP: 1117)

eClerx Services (CMP: 300)

Exide Industries (CMP:66)

Mphasis (CMP: 370)

Opto Circuits (CMP: 160)

Page Industries (CMP: 545)

Sesa Goa (CMP: 185)

Thermax (CMP: 408)

Titan Industries (CMP: 1180)

TRF (CMP: 825)

Voltas (CMP: 123)

Voltamp Transformers (CMP: 842)

Stocks with a little lower ROCE but over 30% ROE are Crompton Greaves and Tulip Telecom (both have ROCE of around 25%).

If you can pick 5 stocks from the above list whose earnings are expected to grow over 20% over the next few years and available at FY11 PE of less than 12, then I believe you can easily outperform the Index over the longer term.

Sensex @ 21000 in 2010?

Madhu Kela of Reliance MF, Nilesh Shah of ICICI Pru AMC and Ajit Dayal of Quantum AMC believes Sensex will hit new high in 2010. I tend to agree with them. I had mentioned in my earlier post of Indian economy growing by atleast 8% in FY11 which I see as one of the reason for the index hitting new high as GST, Oil & Gas Discoveries and Global recovery boost the earnings of the Sensex companies. The added trigger could be the de-control of oil prices since the election is now over. Even if oil prices are not decontrolled completely but raised around the market prices, subsidy burden of ONGC will ease considerably and boost its earnings. ICICI Bank business should have undergone a significant change with focus on CASA,NIMs and ROE while bank’s lending should pick up after the consolidation. HDFC and HDFC Bank will continue with their 20%+ and 30%+ earnings growth. With the capital inflows coming back into the country, Real-estate players will start raising money through equities and pay back the debt to the Indian banks. This will ensure that the restructured assets have not turned bad. SBI & ICICI Bank will be the biggest beneficiaries. L&T might demerge some of its subsidiaries while its infrastructure business continues to deliver 25% earnings growth. BHEL too should continue to deliver 20-25% growth. US economy is expected to recover by the end of 2009 which should lead to increased spending by the US companies. Infy,TCS and Wipro will benefit from the same but the rupee appreciation will take off some sheen. Defensives like Telecom and FMCG should as usual deliver 15%+ growth . Metals will rebound as global economy recovers. Autos could be under stress as interest rates rise and commodities shoot up so growth could be around 10% in this sector.

If the global recovery happens by the end of 2009, Sensex FY11 EPS and FY12 EPS should be around Rs 1090 and Rs 1250 respectively which markets will start discounting by the end of 2010. At the one-year forward PE of around 17, Sensex does have a high probability of hitting new high. Inflation and Commodities prices remain a risk on the downside.

India’s Best Managed Companies

FinanceAsia’s annual poll of Asia’s top companies have been voted by 238 investors and analysts across the region (including yours truly).

Infosys topped across the board by bagging the best managed company, best corporate governance, best investor relations, best corporate social responsibility and most committed to a strong dividend policy. Not surprised!

Bharti Airtel was voted the second best managed company and investor relations.

HDFC Bank stands third on the best managed company and investor relations.

Tech Mahindra and Opto Circuits were voted the best midcaps while Sanghvi Movers and Bharat Bijlee voted as the best small-caps.

Check out the complete list here

George Soros exiting Indian markets ?

Billionaire investor George Soros’ Fund Quantum M has been selling its holdings in different companies. As per the filing of shareholding patterns on BSE, Quantum M has sold its holdings in Reliance Capital, Future Capital, GVK Power & Infrastructure, Orissa Sponge Iron & Steel, Indiabulls Real-Estate and Indiabulls Financial Services. In April, his fund has been selling shares of Rel Infrastructure (595895 shares sold in March quarter and 1304191 shares on 6th April) and JSW Holdings (311232 shares of 965991 shares held by his fund as on 31st March’09) according to the bulk deals on BSE. Quantum’s holdings in Dish TV is awaited.

His fund still holds 1.5% stake in Anant Raj Industries, 5.63% in Gujarat Ambuja Exports Ltd, 3.17% in Karuturi Global as on 31st March’09. So he has not completely exited the Indian markets.

One can make out clearly that there are higher number of stocks his fund sold in the March quarter than the stocks his fund holds. Soros is known for his currency bets. He has fared poorly in equities.

George Soros mentioned in his 28th Jan article in FT,

Although I positioned myself reasonably well for what was coming last year, one thing I got wrong cost me dearly: there was no decoupling between markets of the developed and the developing worlds. Indian and Chinese were hit even harder than those in the US and Europe. Since we did not reduce our exposure, we lost more money in India than we had made the year before.

Infact, his fund was on a buying spree in February and July last year!