Rupeeting Equity Rebalance - June 2022

Since the launch of our equity portfolios in October 2021, the Nifty 50 index has been annihilated to the tune of approximately 15%, with most “finance bro” portfolios suffering the same fate.

On the other hand (owing to the faith of our investors, of course), here is how our portfolios have fared in the past year:

• 4 portfolios have been out-performing the Nifty

• 1 portfolio has been under-performing the Nifty

Let’s delve into where and why your money is being moved in our latest rebalance!

Changes in portfolios

PORTFOLIOS	ADDITIONS	DELETIONS
Rocketship	Esab India FIEM Industries Dabur	Tata Power Tasty Bite Eatables Divi’s Laboratories
Monopolies	Genesys Satin Creditcare Jagsonpal Pharmaceuticals ADF Foods	Crompton Greaves Crisil
Disruptors	Satin Creditcare​	Car Trade Aptus Value Housing Finance
Bread and Butter	-	-
Value Migration	​HG Infra Engineering Sobha Developers	​Dwarkesh Sugar Industries Avanti Feeds
Socially Responsible Investing	​Tata Power Balakrishna Industries	​Cholamandalam Financial Holdings

Why the changes?

Rocketship

Additions	Reasons
Esab India	World leader in production of welding and cutting equipment and consumables New tech to help margin expansion
FIEM Industries	Strong FY22 performance Accelerating EV performance with expectations of revenue being tripled in FY23
Dabur India	Growth sustained despite muted FMCG industry performance Diversified product range and distribution growth, coupled with attraction from new launches expect to draw double digit revenues
Deletions	Reasons
Tata Power	Prudent time to book profits Underperformance across solar EPC business
Tasty Bite Eatables	Performance has been below our estimates Increased food inflation and competition amongst players with better distribution and reach​
Divi’s Laboratories​	Flat exports and weak performance Imminent downside risk

Monopolies

Additions	Reasons
Genesys	Pioneer in advanced 3D mapping and geospatial services First to launch street imagery immersive content in India
Satin Creditcare	Presence in 23 states and 82,000 villages as an RBI-licensed Micro-Finance Institution Present, post-Covid valuations provide favourable risk-reward
Jagsonpal Pharmaceuticals	Caters to pharmaceutical needs of domestic and international markets Recent ownership change can lead to growth
ADF Foods	Leading manufacturer and exporter of processed food Expected earnings CAGR of 18% over the next 3 years
Deletions	Reasons
Crompton Greaves	Recent acquisition of Butterfly Gandhimathi Appliances at a valuation which we believe is rich to pay
Crisil	We believe that the rally in stock price has factored in future growth already, limiting immediate upside

Disruptors

Additions	Reasons
Satin Creditcare	Presence in 23 states and 82,000 villages as an RBI-licensed Micro-Finance Institution Present, post-Covid valuations provide favourable risk-reward
Deletions	Reasons
Car Trade	Performance has been below our estimates
Aptus Value Housing	Limiting exposure to BFSI sector with Satin Creditcare Availability of better valued opportunities

Value Migration

Additions	Reasons
Sobha Developers	​Increased sales volume and reduced net debt Recent correction took place
HG Infrastructure Engineering	Engaged in construction, designing and management of infrastructure projects - Plans to de-risk business by expansion into railway, water infra, etc. Sales inflow to see growth with rising order book
Deletions	Reasons
Dwarkesh Sugar Industries	Our target price has been achieved and we believe it is fairly valued Monsoon and politics tend to impact the sugar industry detrimentally
Avanti Feeds	Performance has been below-street estimates - Margins likely to remain under pressure

Socially Responsible Investing

Additions	Reasons
Tata Power	​High ESG score (67/100) among Indian power companies Shows promise in the long run with EV industry involvement
Balakrishna Industries	​Previous quarter performance estimates were surpassed, causing a rally in May Involvement in agricultural industries for off-highway tyre market makes it a good bet, with exports booming
Deletions	Reasons
Cholamandalam Financial Holdings	Quarterly results were weaker than our expectations While disbursals were strong, AUM growth was weak

Our Bread and Butter portfolio shall remain as it is, with its current holdings being maintained. However, all our portfolios are closely observed and analysed on a daily basis, and necessary rebalances will be taken into consideration as and when the need arises. Don’t think, just Rupeet!