- 1. Our key objective is to pick the right stocks at the right
time by paying a fair price tobuild a balanced portfolio which will
enable us to outperform the markets and achievesuperior risk
adjusted returns. We aspire to generate wealth by compounding money
at ahealthy rate by spotting profit making opportunities in solid
companies with strongmanagement which are available at a good
discount to their intrinsic value. s (TMP) An Innovative Offline
PMS
2. From the Desk of Portfolio ManagerDear Members of The
Millionaire Portfolio, There has been a spate of negative news flow
over the past month on both the domestic front and alsothe global
arena. Indian GDP data was very disappointing and rupee continues
to be weak and hit new lowsevery day. On the global front, there
has been an increasing fear of a disorderly Greek exit which might
triggera global crisis. All these have taken markets lower and
there has been substantial correction in Share pricesespecially the
Small/ Midcap companies. Does all this mean that you should exit
from equity as an asset class?Sorry, No. On the contrary, Investors
should be increasing their allocation to good quality
companies.Stock prices are driven by Sentiments in the short-term,
Liquidity in the medium term and Fundamentalsin the long term.
Though the magnitudes of these negative events have been bigger
than any of the crisis in thecontemporary period, there have been
several of them over the past century. The time periods following
suchcrisis are usually the best time for stock investors where they
will be able to multiply their wealth quickly.Markets and economies
are cyclical because of irrational human emotions and will continue
to be so. It isimportant for an intelligent investor to understand
this and be a strong contrarian and take well informed
bets.Investors have been frustrated in the markets for a very long
time and this can even continue for thenext few months. But
ultimately this phase is eliminating all the weak players in the
same system and thestrong ones who are staying on will profit
tremendously. U.S Bond Market yields are at 1.87% which is equal
totheir stock dividends which clearly shows the kind of pessimism
that has been set into the system. You can seevery low interest in
the markets by the market participants where volumes has gone down
to 5-Yr or 7-Yr lows.Insiders and Promoters are the biggest buyers
in todays market which is a clear sign of the market cheapness.When
you combine this low interest with strong stock picking, its easily
the best way to succeed in themarkets. These periods also allows us
to pick the right kind of stocks at valuations which are at huge
discounts totheir intrinsic values. Investors who are decisive and
not clouded by fear and uncertainties will reap rich Specialists in
discovering Multibagger stocks 3. rewards. Markets bottom out much
earlier than the real economy and hence we feel that the worst may
bealready priced in the market with significant probability for
upsides from any small positive trigger. The morethe markets are
suppressed with no returns; it is only obvious that the next Bull
Run is going to be veryferocious. Markets are ferocious, like in
1988 to 1992 markets went from 400 to 4000 (10X) in a few years
thatled to a P/E as high as 40. From 2003 lows to 2007 markets went
from 3500 to around 21000 (6X).Our portfolio has very little to do
with the Global economies and have no real direct business impact
ona Greek exit from Europe. But, if the shares are correcting for
reasons not justifiable then its good that we canaccumulate more of
the stocks at lower prices. Though DHFL has corrected sharply from
our last addition, ourviews have not been changed and we are highly
bullish on the prospects of the company and the stock.Similarly
HSIL is also available at good valuations. We have averaged down on
both of these stocks and wouldadvise our clients with surplus cash
to park in these counters to generate attractive returns in the
next 2 years. Though one or two quarterly results of a company can
be bad, but our portfolio companies have beensolidly researched and
there has been proper reasoning for adding those stocks in the
portfolio. Eg: In case ofHSIL and DHFL - both are market leaders in
their categories and have substantial moats in their business
whichis helping them grow rapidly, but still undervalued because of
lower investor eyeballs on them. In case of asharp meltdown, we
still have enough room to average down on our high conviction
stocks.Even good companies go through these technical stock
corrections but they bounce back faster andthere is very little
risk of these stocks staying undervalued for a long time. Our
Portfolio looks good with mostof the stocks in excellent financial
shape and its just a matter of time before they show up in share
prices.Hopefully June month will allow us to deploy our cash in
even more attractive opportunities!Regards,[ Gokul Raj . P,
Portfolio Manager ] Specialists in discovering Multibagger stocks
4. Portfolio companies of TMPONLY FOR EXISTINGMEMBERS OF TMPTMP
Returns = + 39.5 % Vs sensex returns = - 4 %equity exposure =
80.88% Cash Exposure = 19.12%You can look into the Outperformance
in this Tough Period from comparing this returns withthat on Jan
29, 2012, Specialists in discovering Multibagger stocks 5. TMP
Performance [8-10x better than Sensex] 6. TMP Performance Update 7.
Medium Term - Portfolio Guidance Looking into PVR and Persistent
Systems :Our research team has come out with good research reports
on PVR Ltd and Persistent Systems and weare evaluating these
suitability of these stocks to our portfolio. We would take a call
after a rational riskcheck on the portfolio compared to the
expected returns. Tracking Poly Medicure :Poly Medicure has a
substantial exposure in our Equity portfolio. We are tracking the
performance ofthe company closely and we would be taking a decision
on Holding the stock in the next few quarters. Since,the
information about this company is quite low, we need to wait for
the companys annual report to take afirm decision on it. Increase
the stock exposure to Mid-Cap Gems : We have been holding a decent
amount of cash in the portfolio. We are sensing
interestingopportunities and hence would be deploying more cash in
the markets in the medium term. We would beadding stocks, which we
will be holding for at least the next 2years thereby giving
stability to the portfolio. We would also like to add certain high
dividend yielding stocks in order to create a regular cash flow
forour investors. Balancing will also be done by adding stocks
across sectors . Continuing with our bullishnesson select Mid-Cap
stocks which can grow sustainably, we will increase allocation to
them and therebyincrease the overall Equity Allocation % to over
85% in the next few months. Specialists in discovering Multibagger
stocks 8. TMP Connect[For new members joined TMP]New Members who
has joined during last two months needto replicate TMP Connect
ONLY, Since they are joining inbetween hence a replica of actual
TMP is created for them. Specialists in discovering Multibagger
stocks 9. Your TMP Connect [Only buy these stocks listed
below]Company NameAllocation (as a % of your total planned
Allocation % - If yourportfolio size)planned portfolio size is say
10 Lacs, you will beCera Sanitary ware6% allocating Rs50K
towardsONLY FOR EXISTING Arshiya International atArshiya
International Ltd 5% CMP which is 5%MEMBERS OF TMPPoly Medicure 6%
allocation.Sanghvi Movers9% Please follow TMP Update which is
releasedKarur Vysya Bank8% once a month for further buying price
range for allACGL7% stocks in the portfolio.DHFL10% Stocks which
are not thereHSIL10%in this list, will slowly be phased out of the
mainBiocon9% portfolio. Hence, dont buy them unless
initiated.Indiabulls Financials 5% Because of the fall inKDDL3%
markets, new membersCash22%will be able to buy certain stocks at
better prices .Total 100 % Specialists in discovering Multibagger
stocks 10. TMP Update [For existing members] Specialists in
discovering Multibagger stocks 11. Existing TMP (as on June 1,
2012)ONLY FOR EXISTINGMEMBERS OF TMP Specialists in discovering
Multibagger stocks 12. Transactions in the PortfolioONLY FOR
EXISTINGMEMBERS OF TMP Specialists in discovering Multibagger
stocks 13. Reshuffled TMPONLY FOR EXISTINGMEMBERS OF TMP
Specialists in discovering Multibagger stocks 14. Summary of TMP We
have increased the stock exposure by more than 4% in this update .
Going forward, we wouldgradually increase the exposure to much
higher levels. The total number of stocks is at 11. We intend to
run a fairly tight and balanced portfolio. Hence, wewould not like
to add new stocks without proper replacement. During every
significant fall, we shall be deploying cash pretty aggressively in
fundamentally goodcompanies . We have sufficient cash to average
down, if required. Incase of opportunities where risk-reward is
very attractive than any of our existing portfolio stock, wewould
take a rational decision to swap the current share with the new
stock. Specialists in discovering Multibagger stocks 15. Notes/
Reasoning for Transactions in TMPAverage Down - HSIL: ONLY FOR
EXISTING MEMBERS OF TMPHSIL is a solid business which has
tremendous potential for growth. Inline with our guidance for
addingmore of the stock in the coming months, we have been able to
add HSIL at pretty attractive levels because ofthe correction post
its Quarterly results. After our Con-Call with the Management, we
have a fair bit of anidea that the company will continue to do well
on the topline front while the margins may pose a challenge.But
anyways, HSIL has enough operating leverage to grow its bottom-line
significantly in the next two years,which lead to a higher
re-rating enabling us to get Multi-fold returns out of the
stock.Average Down - DHFL:DHFL has posted a good set of Quarterly
earnings. The PAT has grown over 60% in the last quarterwith
improvements in margins and reduction in NPAs. We expect the
company to post EPS of around 40Rs in FY-13 which leads to a
valuation of less than 5X which is very attractive for the quality
of its businessoperations. We dont find any significant reason for
the decline in the share price and hence believe that, thisis just
a blip and investors should be using this correction to accumulate
more of the stock. Institutionalinvestors investing in the stocks
at 255 Rs/ Share and Promoters converting their equity at over 300
Rs/Share gives us tremendous confidence about the future of the
company. This bullishness is reflected in theShare being the No:1
pick in our portfolio. Specialists in discovering Multibagger
stocks 16. Quarterly Results UpdateCompany Name Result analysis for
the quarter : Q4 FY-12Dewan Housing Dewan Housing Finance
Corporation (DHFL) has reported 59.86% surge in net profit at Rs
93.76 crore for the fourth quarter ended March 31, 2012. The
company had a net profit of Rs ONLY FOR EXISTINGFinance Ltd 58.65
crore in the same period in the previous fiscal. MEMBERS OF TMP The
companys total income rose to Rs 721.11 crore during the quarter as
against Rs 434.63 crore in the corresponding quarter last year, up
by 65.91%. For the year ended March, 2012, the companys net profit
grew by 15.57% to Rs 306.41 crore, against Rs 265.13 crore in the
previous fiscal. At the same time, total income of the housing
finance firm increased to Rs 2,469.68 crore in 2011-12, compared to
Rs 1,451.24 crore a year ago. During 2011-12, home loan sanctions
increased to Rs 12845.30 crore as against Rs 8,949.48 crore in the
previous fiscal, an increase of 43.5%. Disbursements rose to Rs
9,065.24 crore in compared to Rs 6,505.57 crore in 2010-11.Analysis
:-Dewan Housing Finance has strongly corrected in the past month.
Looking into the results and otherfundamental news flow, we feel
the correction is not warranted and this discount on the stock will
notsustain for long. This seems to be technical correction which
can happen because of the large ForeignInstitutional presence in
the stock. But this more of an Opportunity to accumulate the stock.
Specialists in discovering Multibagger stocks 17. Quarterly Results
UpdateCompany Name Result analysis for the quarter : Q4 FY-12HSIL
The revenue zoomed 17.98% to Rs. 3912.60 millions for the quarter
ended March 2012 as compared to Rs. 3316.40 millions during the
corresponding quarter last year.ONLY FOR EXISTINGMEMBERS OF TMP
Profit after tax improved marginally to Rs. 329.30 millions for the
quarter ended March 2012 from Rs. 325.00 millions of corresponding
previous quarter. OP of the company witnessed a marginal growth to
745.80 millions from 682.00 millions in the same quarter last
year.Analysis :-HSIL has performed well on a sequential basis
because of the volume growth in its Building products divisionand
price increase in its Container Glass business. There has been
severe pressure on its margins because ofthe steep increase in Fuel
& Power costs. This along with the depreciating Rupee was the
reason for thecompression in Margins.But, we must remember that Our
Investment call on HSIL is because of the pricing power it
commandswhich will help it to pass on the extra costs. This
continues to be true and in fact, tough situations like thepresent
helps us strengthen our conviction on this stock. Company takes a
small lag in the Container glassdivision while immediately passes
on the costs in Building Products division. This can be seen from
the Priceincrease in the last 6 months on both businesses without
affecting volume growth. Specialists in discovering Multibagger
stocks 18. Quarterly Results UpdateCompany NameResult analysis for
the quarter : Q4 FY-12KDDL The revenue for the March 2012 quarter
is pegged at Rs. 261.30 millions, about 13.17% upagainst Rs. 230.90
millions recorded during the year-ago period.ONLY FOR EXISTING The
Net profit of the company remain more or less same to Rs. 15.10
millions from Rs. 20.40MEMBERS OF TMPmillions ,decline by -25.98%.
Operating Profit saw a handsome growth to 52.40 millions from 47.40
millions in the quarterended March 2012Analysis :-Considering the
tough operating conditions for small companies like KDDL, it has
performed relatively wellon the topline front. But the major
disappointment was on the net profit which shown a substantial
decline,however we continue to look at the financials and AR and
would take a rational decision on the smallallocation which we have
done to the stock. Specialists in discovering Multibagger stocks
19. Next Update - June 30, 2012As mentioned in the previous
reports, we would be giving regular update reportsat the end of
each month. In addition to this, we would be buying/ selling
stockswhenever there is a good opportunity and also keep you
updated on the changes.We would be providing the following in the
this Month end report ,Quarterly Earnings Update of Portfolio
Stocks. - Special Update on Poly Medicure Opportunity & Risks.
News Update on the companies and also price update of stocks.
Specialists in discovering Multibagger stocks 20. Sit back and
Relax while your Money worksHard for you A Fund which is backed by
the Best EquityResearchA Fund which invests in Strong secular
growthcompanies which will be HBJ Capital Ventures LLP the leaders
of the NextBull Market ! - Your Partner in Wealth Creation For
additional Details, Call us - +91-9886736791 21. THANK YOU
Specialists in discovering Multibagger stocks
