Buffet, Lynch and other legends - Investing Strategies: Rakesh Jhunjhunwala's Portfolio

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Rakesh Jhunjhunwala's Portfolio - Sept 2008

Printed From: The Equity Desk
Category: Market Strategies
Forum Name: Buffet, Lynch and other legends - Investing Strategies
Forum Discription: DIscuss about the strategies followed by the great investors. Share an idea which would have impressed the masters. Try and bring their International experience into the Indian Markets.
URL: http://www.theequitydesk.com/forum/forum_posts.asp?TID=2024
Printed Date: 07/May/2025 at 4:33am

Topic: Rakesh Jhunjhunwala's Portfolio - Sept 2008

Posted By: basant
Subject: Rakesh Jhunjhunwala's Portfolio - Sept 2008
Date Posted: 13/Jan/2009 at 10:12pm

Company	Quantity		Price	Value	Wts	PE	Mkt
	30.06.08	30.09.08	12.01.09	Rs cr	%		Cap
Titan industries	3985756	3867957	896	357	26.65	19	3979
Lupin	2752135	2792135	580	160	11.91	9.85	4800
Crisil	550000	550000	2397	132	9.84	13	1730
Aptech	13254403	13254403	80	106	7.91	61	370
Nagarjuna Const.	1562500	1600000	59	92	6.88	7.76	1350
Bilcare	2025000	2025000	439	89	6.63	13	756
Praj Industries	13376624	15525642	56	75	5.59	6.8	1040
Punj lloyd	5040000	5040000	115	58	4.33	11	3495
Karur Vysya Bank	2494073	2394073	223	56	4.15	5.74	1203
Pantaloon Retail	2330895	2330895	211	49	3.67	28	3702
Geojit	18000000	18000000	24	43	3.22	12.5	498
Bhushan Steel	829000	820000	298	25	1.84	2.61	1266
Agrotech Foods	1703259	1703259	96	16	1.22	13.6	234
Prime Focus	882500	882500	134	12	0.88	7.21	170
Infomedia	1506062	1506062	78	12	0.88	--	155
Viceroy Hotels	4250000	37500000	25	11	0.79	18	104
Autoline Industries	1211622	1231233	63	8	0.57	4	82
Geometric Software	3035000	3185000	20	6	0.45	4	130
Kajaria Ceramics	1502642	1502642	31	5	0.35	14.3	228
ION Exchange	500000	643551	86	4	0.32	13	86
Champagne Indage	438650	500000	92	4	0.30	4	156
Zen technologies	450000	450000	89	4	0.30	9.5	72
JB Chemicals	1081650	1081650	37	4	0.30	4	304
MidDay Multimedia	2250000	2250000	12	3	0.20	--	63
Garware Wall Rope	500000	500000	45	2	0.17	44	105
Dwarikesh Sugars	450000	450000	44	2	0.15	--	71
Provogue	380000	1900000	51	2	0.14	21	584
MRO Tek	570834	570834	26	1	0.11	4.28	48
Alphageo	125000	125000	117	1	0.11	5	60
Rishi Lazer	380000	380000	26	1	0.07	5.5	20
Vadilal Industries	200000	200000	27	1	0.04	6	20

Total value of the portfolio (Rs crores)				1340

Colors in blue represent stocks where holdings have gone up and in red represent stocks where holdings have gone down.

Piquant Observations:

· His top 5 holdings account for 57.719% of his portfolio and his top 10 holdings account for almost 83.03% of his portfolio.

· The recent stock market crash this portfolio has seen a notional loss of around 70%. From the January highs

· Companies with higest trailing PEs in the portfolio Titan and CRISIL have outperformed all the other stocks.

· Some stocks in the portfolio like Nagarjuna Construction and Punj Lloyd are down by close to 85% from the peak but if one can survive the market he can live to fight another day and that is precisely what Rakesh Jhunjhunwala is doing..

· Companies like Titan, Pantaloon retail, Crisil, and Praj where Rakesh Jhunjhunwala has made most of the money are sector leaders. Karur Vysa Bank has been a multibagger for him but as Buffett professes one need not buy the biggest Bank to make most of the money.

· All the companies where Rakesh jhunjhunwala has made most of his money started as mid/small caps and later grew with time. But the ones with the smallest market cap Vadilal Industries has done nothing. This indicates that small market cap is anecessary but not a comprehensive tool for creating a multibagger.

· This portfolio has the latest market cap and the Price to earnings ratio as sourced from money control. The average http://www.theequitydesk.com/forum/forum_posts.asp?TID=382 - adjusted for the companies that have no earnings is around 13 times! But most of these smaller capitalized companies in sectors that are scalable.

·          The underlying theme in the portfolio remains domestic consumption (Titan and Pantaloon,), Infrastructure (Nagarjuna Construction and Punj Lloyd) , pharma (Lupin and Bil Care) and financial Services (Crisil and Karur Vysya Bank.)

·          It is hard to find a cyclical or commodity stock in his portfolio.

·          Unlike the general investor none of these stocks are large caps in the true sense of the definition. Of Course he could be holding future positions in large caps but the point that I am trying to make is money is made in http://www.theequitydesk.com/forum/forum_posts.asp?TID=113 - . The notional losses that an investor can suffer are also the highest in these stocks. It is very important for an investor not to convert these notional losses in actual losses by selling the shares in despair.

·          Most of these stocks are being held for over 5 years. Companies like Titan, Pantaloon Retail fall in that category. Others like Crisil are being held for as long as 10 years. – Clearly Time and not timing is the key to these markets.

·          Almost all these companies are looking at a huge http://www.theequitydesk.com/forum/forum_posts.asp?TID=259 - ·          We do cover companies with huge scale of opportunity in the section http://www.theequitydesk.com/forum/forum_posts.asp?TID=2006 - TheEquityDeskReportCard Dec 2008 .

·          These shares are held by Rakesh and his wife Rekha Jhunjhunwala and form a part of his disclosed portfolio. He could be holding more shares through companies, trusts, proprietary accounts which are not in the public domain.

·          To know more about investing legends see the section http://www.theequitydesk.com/globe_troting_macro_players.asp%5dWorlds%20greatest%20Investors%5b/URL%5d - http://www.theequitydesk.com/globe_troting_macro_players.asp -

Replies:

Posted By: Hitesh Shah
Date Posted: 13/Jan/2009 at 10:33pm

Basantji, is it possible to know for how long Ion Exchange has been in RJ's portfolio?

Ans.: First appeared in portfolio dated 31/12/2007.

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Posted By: kumardiwesh
Date Posted: 13/Jan/2009 at 11:33pm

Buffett professes one need not buy the biggest Bank to make most of the money.

Could you elaborate on this point?

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"History does not tell you the probability of future financial things happening" - Warren Buffett

Posted By: basant
Date Posted: 13/Jan/2009 at 7:31am

Buffett has Wells Fargo and AMex which are efficient but not necessarily the largest banks in US. Size is critical but not the end all for making invetsments into a banking company.

SBI, PNB, BOB and a host of PSU banks are larger to HDFC Bank but still I am sure that HDFC Bank will outpeform them over the next 3-5 years

ION is a company with hopeless management. They are kolkata based and have done nothing to improve shareholder returns. Shiv Kumar's old favourite Forbes Gokak is abetter option. I have no idea on its financials and am speaking from a pure business model point of view.

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'The Thoughtful Investor: A Journey to Financial Freedom Through Stock Market Investing' - A Book on Equity Investing especially for Indian Investors. Book your copy now: www.thethoughtfulinvestor.in

Posted By: Renegade
Date Posted: 14/Jan/2009 at 5:52pm

Seems the quantities for 30-09 are incorrect for few - Provogue, Viceroy and Nagarjuna Cons

Posted By: pereiradcruz
Date Posted: 15/Jan/2009 at 7:58pm

I learn from NSE that he has invested in Rallis. Please check this and update. Thanks again for the good work.

Posted By: manish_okhade
Date Posted: 24/Jan/2009 at 10:28am

Does anybody knows modified portfolio of RJ in current mkt scenario?

Posted By: kumardiwesh
Date Posted: 28/Jan/2009 at 2:44am

Basantji, you often use the word scalable while talking about RJ's investment philosophy.
Could you explain what you mean by scalability of a business model?
What kind of businesses are scalable and what kind are non-scalable?
It would be better if you could provide some examples.

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"History does not tell you the probability of future financial things happening" - Warren Buffett

Posted By: basant
Date Posted: 28/Jan/2009 at 5:09am

Scalable means volume growth compared to the market size. For example a Tv station cannot be scaled up but a retail venture can be scaled up by increasing the nukber ofs tores. In case of a TV network the gains would come from pricing power whereas scalability actually refers to increasing the number of customers.

Surely these are not watertight classifications as TV stations can add new viewers.

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