2022: Thankyou, Recap, Update & Risks
We crossed 200 subs :)
The year 2022 was special for me as we started ‘Finding Outperformers’.
Here’s a little story of what made me start writing.
While talking to my friends & seniors, macroeconomics & stocks were the topics I couldn't resist talking about. I also believed that somehow people don't spend enough time understanding where they are investing their hard earned money, along with knowing the risks associated with their investments. Equity research reports by brokerages are complex to understand & many a time you end up buying shares recommended on TV channels or Youtube.
That's what motivated me to start 'Finding Outperformers' 3 months ago by starting to publish my own research I used to perform for my portfolio companies as a blog here on substack. These aren't stock recommendations but surely provide you with a decent perspective/understanding of the macros & the business model of the company being talked about along with the reason why I bought them.
I'm thankful to each one of you who ever went through my content on substack or on Linkedin (where I might be spamming your feed sometimes, apologies :p).
Recap & Risks
Markets keep changing quickly, with the importance of certain risks overpowering the importance of others at times. So here’s a recap of stocks we discussed, where it stands in personal portfolio & risks involved.
Maruti Suzuki: After posting about the share, the share price of Maruti did touch its 52-week high of Rs 9700. Since then, the interest rate risk has only become more profound. Even the chip shortage situation has not improved much to fill Maruti's order backlog today. We are neutral on it/equal weight now with negative bias due to interest rates.
Happiest Minds: IT sector as a whole has been a laggard for many months now & Bank Nifty is expected to outperform the IT index in 2023 H1 as well due to the deteriorating global economic picture. No specific newsflow related to Happiest Mind; interesting to note that management used to give an interview call discussing results & outlook with Bloomberg Quint for a few quarters but this’ quarter’s interview couldn’t be found on youtube/ interview didn’t happen which to us doesn’t sound well. Management generally hesitates to speak in public when they are facing difficulty meeting their guidance. Its allocation in the portfolio has decreased over the past weeks, but it remains one of the top picks for the long term in the IT space.
[Update: we got a recent interview video of the CFO of Happiest Minds, you may want to see this interview for the latest company update:- ]
Apollo Hospitals: Quarterly results of the company were encouraging. We continue to remain overweight & bullish on the business in the long term and have added positions. The key risk here is the high FII holding & any recession/crash in global markets can lead to selling by some of FIIs. We don’t track the stock in short-term moves on stock unless any fundamental breakdown is happening.
Banking & NBFCs (IDFC First, Bajaj Finance & SBI): Banking has outperformed big tank in 2022 & same is expected to continue in 2023. Our positive stance & overweight continues on these shares mentioned. The risk here is again of global recession causing a significant slowdown in India.
Nazara tech: We continue to believe that the big story is yet to be accepted by the market. Nodwin Gaming has been performing quite well in terms of events being organized. We continue our positive stance & have added positions off late. We are structurally positive on it long story & are keenly watching for its results which we feel should be quite good because of Nodwin. The risk here to mention is the sharp correction that’s happening in Nasdaq right now can negatively impact digital, startup, and related company valuations here in India.
DLF: We are still underweight on DLF & had built some positions but with the interest rate rise & another possible hike by RBI of 25 basis points in the next meeting, the Realty sector's overall outlook remains under the cloud as of yet.
That’s it for today, thankyou 200!
Best,
Aditya Grover