Dream stocks to have in your Indian portfolio league (IPL)

Stocks should be picked with the overall portfolio mix in mind. (Image: Pixabay)
Stocks should be picked with the overall portfolio mix in mind. (Image: Pixabay)


  • As the IPL 2024 is ending, let’s draw parallels between crafting investment portfolios and selecting cricket teams.

Have you ever tried connecting the dots between cricket and investing? There’s a lot that investors can learn from it.

You see, there are parallels between crafting investment portfolios and selecting cricket teams. Both advocate for a mix of specialists, all-rounders, and X-factor options to navigate market dynamics and outperform the competition.

Just as a horse wears blinders during a race to focus on the road ahead, investors should concentrate on building their portfolio rather than getting distracted by daily stock market movements.

In this article, I’ll share some thoughts on how you can build your ideal equity portfolio by integrating the principles of selecting a cricket team.

Just as cricketers are chosen based on their skills and fit within the team, stocks should be picked with the overall portfolio mix in mind.

Let’s get started.

# 1 The Mahendra Singh Dhoni of your portfolio

The first player on this list is Mahendra Singh Dhoni.

As the saying goes, ‘Dhoni hai toh sab sahi hai’… he is the equivalent of a blue-chip company in an equity portfolio.

Bharat Electronics Ltd (BEL) can be the Dhoni of your portfolio.

Bharat Electronics is a major player in producing electronic gear for India’s defence. The government owns a majority of BEL, holding 51.14% of its shares.

As a leading player in the defence industry, BEL specializes in supplying radar, communication, and electronic warfare equipment to the Indian armed forces.

Bharat Electronics generates nearly 90% of its revenues from the defence sector, supplying products and components to the Indian armed forces and defense public sector units.

BEL achieved a record turnover of 197 billion during the financial year 2023-2024. In the same year, BEL successfully secured orders worth 350 billion.

Going forward, Bharat Electronics Ltd (BEL) is strategically expanding into non-defense sectors, aiming for about 30% of total turnover.

Additionally, BEL envisions 500 billion worth of orders in the next two years and plans a capital expenditure of 7-8 billion.

As part of the Aatmanirbhar Bharat vision, BEL has received substantial support from the government, signing a landmark contract with the Ministry of Defence for the procurement of electronic fuzes for the Indian Army for a period of 10 years.

#2 The Sanju Samson of your portfolio

My next player is Sanju Samson, known for his standout performances in the IPL.

He was appointed as the captain of the Rajasthan Royals in 2021, with high expectations to be a successor of MS Dhoni as India’s gloveman. Unfortunately, his career didn’t meet those expectations, but he excelled in the IPL, making him a very ‘seasonal’ player.

Similarly, there are stocks that perform well in certain cycles, positively impacting their revenue and stock price.

Tata group’s Voltas fits this analogy.

Mumbai is experiencing a record-shattering heat wave, leading to a substantial increase in the demand for air conditioners (AC). Voltas is a seasonal stock that thrives during the summer season.

The Tata group company recently reported sky-high sales of 2 million units of ACs, positively impacting its stock price. The company claims to be the first brand to achieve this milestone in the history of the air conditioning industry in India.

Voltas registered a significant volume growth of 72% in AC sales during Q4FY24, with its stock gaining momentum due to high demand for ACs.

Another seasonal stock is Varun Beverages.

India’s Pepsi bottler, Varun Beverages, benefits from an uptick in demand for soft drinks in the January to March 2024 period due to an early onset of summer. The company expects this strong demand trend to continue in the April to June 2024 quarter as well, driven by heat conditions and elections.

Other seasonal stocks include Dixon Technologies and PG Electroplast, whose revenues spike due to increased television sales during the ongoing IPL season.

#3 The Hardik Pandya of your portfolio

The plastic packaging space has faced challenges over the past two years with gross margins at a 10-year low due to overcapacity. Capacities have risen by more than 40%, leading to a demand-supply imbalance.

Companies like Cosmo First, Polyplex, and Ester Industries have seen their stock prices correct by more than 50% from their peak.

The plastic industry’s current scenario reminds me of a very talented and explosive but currently out-of-form player – Hardik Pandya.

Just like IPL 2024 for Hardik Pandya, the last year has been tough for packaging companies. However, things are changing.

The packaging space is ready to bounce back after more than four quarters of losses, with gross margins showing signs of recovery. If the fourth-quarter numbers are any indication, the industry is definitely reviving.

#4 The Rahul Dravid of your portfolio

My fourth player would be Rahul Dravid, currently a head coach, known for his outstanding batting technique and being one of the greatest batsmen in cricket history. He is famously known as Mr. ‘Dependable’.

In market terms, ‘dependable’ translates to ‘dividend’. Investors should have dividend-yielding stocks in their portfolio for times when the market is bearish.

Dividend-paying stocks are popular among investors looking for a steady stream of income.

Coal India fits the role of Mr. Dependable in this context. Coal India has consistently given regular dividends to its investors.

The advantages of these dividend-paying stocks are that they generate income, provide stability, and offer some growth potential.

Apart from the mining major, here are few other dependable stocks.

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# The Virat Kohli of your portfolio

My final player is none other than Virat Kohli.

Pidilite Industries can be compared to the Virat Kohli of stock markets. The company has compounded at 18% CAGR over the past 10 years, with its stock price surging by as much as 900% during the same period.

In the industrial and consumer glue segment, Pidilite has become a household name. Can there be a Royal Challengers Bangalore (RCB) without Virat Kohli? No, right?

Similarly, Pidilite has established dominance in its industry. While the company’s earnings have grown at a CAGR of 18%, the strong returns have come from PE multiple expansion. The PE multiple 10 years ago was 35 times, which has now skyrocketed to 85 times.

They say ‘Catch Them Young’ just like Virat Kohli was picked by RCB in 2008. If you had invested in Pidilite Industries back in 2013, the returns would have been immense.

In Conclusion

A great innings is a combination of dots, singles, doubles, and boundaries.

Likewise, a successful investment journey involves witnessing high return phases, actively participating during downturns, and sticking to your process to generate great returns in equities.

There are numerous investment strategies one can follow, but the right approach involves taking concentrated bets on specific sectors while diversifying within them through a basket approach.

That’s it for today.

Happy Investing!

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.

This article is syndicated from Equitymaster.com

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