Disclosing 3 companies from my stock portfolio

In our last newsletter, I promised that I would be disclosing my stock portfolio.

Today we would be discussing 3 companies that I have in my stock portfolio, I would also be discussing some key facts about these companies and my investment style.

Well, when it comes to investing in the share market I tend to follow 3 simple rules,

Rule 1: Do not invest for short-term gains.

Rule 2: Invest only in companies that provide value to the ecosystem.

Rule 3: Save your profits.

Lets discuss each of these rules in depth.

Rule 1: Do not invest for short-term gains.

I have been investing and trading in the share market for last 3 years, and when I analyzed my profit & loss statement I found out that I have paid, more than 20% of what I had earned through short-term trading as brokerage and other charges. Second point, the probability of losing money is higher in short term trading. Third, during intraday trading, you do not bet on the performance of the company but you bet on the price change and hope that the price would move in your desired direction.

This is why I follow a long-term investing strategy.

Rule 2: Invest only in companies that provide value to the ecosystem.

Companies that have identified the pain points in the market and provide services/products that solve these problems are more likely to sustain the market even in bad conditions. This is because the customers are utilizing their products/services due to a “pull effect”. I.e customers themselves want to use the products since it is making the customer’s life easy. Whereas, companies that provide a service/product that is sold due to a “push effect” tend to lose a large chunk of their profits on marketing and are less sustainable business models in the long run.

Rule 3: Save your earnings

It is important to save whatever profit you have earned through stock trading or investing. Once you have withdrawn your profits make a habit of reinvesting them into low risk assets. “Re-investing” is important so that you make use of the compound effect.

Learn more about compound effect here.

We can now talk about the 3 companies in my Portfolio,

One thing that is common in these 3 companies is that, The financials of these companies are good, meaning, they have revenues increasing Year on Year, good profit margins, Healthy balance sheets etc. Hence, we won’t be discussing the fundamentals in depth, but in today’s newsletter we would be looking towards some facts that make these companies a lucrative investment opportunity.

Company 1: CDSL

• India has only 2 depositories that hold our shares, bonds, etc in dematerialized form. NDSL and CDSL out of these 2 companies, CDSL has the highest number of demat accounts – 7 crore. Since, this is a small percentage of India’s population, hence there is plenty of room for this company to grow.

• Brokerage houses like Zerodha, Upstock, Groww, Angel one are all Depository participants registered under CDSL.

• Apart from holding our securties CDSL provides many other services to companies registered on the stock market. These services include Foreign Investment Monitoring, Electronic Voting, Virtual Annual General Meeting Platform etc.

Company 2: Dixon Technologies.

• The company saw a 66% increase in revenue in FY22 with 19% Net profit increase.

• 35% of India’s consumer electronics demand is catered by Dixon technologies.

• Dixon has a manufacturing capacity of 300 million lightbulbs, the Largest in the Indian lighting industry

• The company has Joint ventures with brands such as Boat, Beetel Teletech Limited, and Rexxam.

• They manufacture products for Airtel, Samsung, Godrej, Voltas- Beko, Panasonic, Lloyd, Flipkart, Haier, Reliance etc.

Company 3: IRCTC

• The company has Zero debt in books

• “Rail Neer” is the only distilled water bottle sold on railway platforms. Hence, The company has a monopoly there. Almost 20 crore bottles are sold every year.

• 11.44 lakh tickets are booked through the IRCTC website each day. 80.43% of the total

• reserved tickets booked in India were booked online in FY22 out of which 4,174.49 Lakh tickets were booked through IRCTC website and mobile app.

My portfolio performance:

This is the current performance of the stocks mentioned above. Some parts have been hidden due to government regulations. And this is not my complete portfolio.

Disclamer: This article is not investment advice. It is just for educational purpose