Porinju Veliyath recommends stocks which can give compounding gains instead of multibaggers

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Pee Vee
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Porinju Veliyath recommends stocks which can give compounding gains instead of multibaggers

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Porinju Veliyath has recommended stocks which can give 25-30% compounding gains for the next five and 10 years.

Tata Global Beverages.

In Tata Global Beverages, the undervaluation is just getting rectified. At Rs 120-125, it was wrongly priced for the same fundamentals and now that has rectified because the stock was identified or some large institutions have stopped selling. So, it has come to normal levels.

It was one of the big picture companies when we discussed on ET Now a year ago. The price used to be Rs 120-125 and even Tata Coffee also is looking good at these levels. We have holding in both the companies in PMS.

HSIL

HSIL stock used to be at Rs 700-800 crore market cap. It was the industry leader in this country at a time the industry was in infancy. Now it has come to some Rs 3,000-crore market cap. HSIL has still a long way to go. They are demerging the brand and distribution business. It is a very large business and it used to be underpriced. I think this stock can even double from here in the next one to two years’ time. The stock price is around Rs 450, Rs 3300 crore is the market capitalisation and I want to disclose that we are holding it in PMS.

GVK

My stake in GVK is now around 6.5%. Last time when I went to Mumbai I was waiting for the flight in the lobby. I was telling my wife I own 3% of Mumbai Airport! So something nice to think about. There are leveraged infra companies and with the less leverage infra companies, infrastructure is definitely a theme and a story going forward.

GVK is a company with leverage. If you see the consolidated balance sheet, there is huge debt now, it is Rs 15000-crore debt. By some other accounting, it is Rs 25000 crore but the Rs 5000 crore is more relevant.

On the other side, this company has got very interesting assets and futuristic and once they come out of this over-leverageness and Australian coal mine laboratories and the management has very clearly indicated in the last AGM, about the plans and the methods or the ways how to come out of the overleverage or the coming back to a strong balance sheet once it happens.

If it happens, I do not want to make it a 100%. One thing I will tell you, markets have come to rich valuations, there is no doubt about it in general. If you really want to make big money, the multi-baggers you have to take some risks.

GVK I would not recommend to somebody to just go and blindly buy it but I feel if there are symptoms in the company of deleveraging and the industry has a huge advantageous position at this point of time when you look forward and their capability for execution and they have already proven their mettle so I think these kind of companies are there.

DCM Shriram

DCM Shriram is a risk free company but still I love it and I have been buying in portfolio management from Rs 50. DCM Shriram Ltd used to be earlier known as DCM Shriram consolidated. The stock has really come up and it has come 10 times and still I like the company we are still holding in portfolio management.

Future Consumer

When I was buying Future Consumer at Rs 10, I was like the only buyer in the market. We had a significant stake and Future Consumer is the biggest ever money made in our portfolio management. To be very frank. we booked most of the profits, we are still holding some. You know at 60 plus, it is a six bagger. That is how you have to do it. We just analysed the last seven months performance of the portfolio management. It is something like 38% absolute return in seven months.

Future Retail

I prefer not to comment on that because I am not excited at these levels because I get excited when companies are at an inflexion point, it is a deep value and it is not discovered well. But these companies can still be compounders.

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