July month at Bravisa Templetree saw consolidation in our portfolio along with the broad markets. This consolidation was eminent after the prolonged rally that the markets had pre and post election and formation of the new government.
After the budget markets gave away strength in the rally, but it is a healthy correction to be had in any bull market. So far in the rally there were negligible retail participation, all were on the side lines and this correction will be a good level for the retail participation to come in.
On the Fundamental side, there are a regular number of companies that show strength in their growth. Technology results so far had been good with above numbers coming above market expectations. It has been a broad based growth with no specific pockets attracting interest. There have been companies in the agriculture, machinery, communication, metals, finance, packaging as well as software that have shown strength.
As part of our regular review of the portfolio there had been some new entries as well as some full and part exits. We have been with our strategy of being invested in a company only till there is required growth in both their sales as well as their earning, when this number sees a decline, we take exit in phases.
Some of the new investments made in the month of July 2014 in companies that had both earnings and sales growth in the quarter June 2014 results were as follows.
- Tata Communications
- Gravita India
- Laxmi Machine works
- Capital First.
- TVS Motor Company.
- Vakrangee Software.
New entries based on the top ranks in both earnings and sales from the list of companies that we track on our research.
- Aban Offshore
- Jain Irrigation Systems
- Cosmo Films
- Ahluwalia Contracts
Some of the companies in our portfolio that have slowed down on their growth in which we have taken part exits to reduce the exposure into the companies that have growth but are not the highest.
- Sonata Software
- VST Tillers
- SKS Microfinance
- Tech Mahindra
- Kaveri Seeds
Few companies that we have got out of our portfolio, post their slowdown in growth and drop in their rankings
- Rajastan Spining & Weaving
- Britannia Industries
- Tamilnadu Newprint & Paper
- Hexaware Software
Apart from Hexaware Software which had a loss of 7.16% between our purchase and sale price, all other exits were done with considerable gains. Highest gain was in Kaveri Seeds, which had recorded 82.38% profits and this does not include dividend income of Rs. 82.40 per share in our holding period, including which the net gains are 100% in 18 months period.
We expect the economy to have strong growth among all the sectors in the coming years and believe to benefit from such growth by being invested in to the best performing companies and have the benefit of highest possible growth on our investments.
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