Monday, March 23, 2009

Diversification of Equity Portfolio

They say that sometimes in stock market experience comes in more handful than mere knowledge and/or information. Similarly, an investor can get to learn & obtain more and more know-how about investing as he experiences a patch of lean period of action like current bear phase. And nothing better than the ongoing deep recessionary bear market across the globe. It teaches various lessons which may range from patience, perseverance, art of staggering investments, discipline in decision making and rationalization of expectations among various others.

Though, it is understood that, investors in stock markets have short and weak memory. Most of the times, they do learn quickly from their past mistakes. But, as soon as times of recovery re-emerge on the horizon along with the waves of over-exuberance, they tend to forget about the past experience and fail to implement the lessons of the bad times thus depicting lack of discipline & perseverance.

Diversifying Fruitfully:

Every kind of asset class is fraught with uncertainty upto a certain extent. No investment is a sure shot guarantee of fixed returns. This aspect of uncertainty in offering returns makes the world of investment diverse and broad in nature depending upon its return and risk profile. This very quality of uniqueness in providing diverse returns is useful to determine & examine various options from the number of different asset class based on one’s investment and risk profile.

Diversification - to explain it in simple language, suppose there are 2 baskets full of fruits. One of them consists of only five Apples. The other one is filled with Mango, Apple, Grapes, Orange and Banana. Thus, both the baskets are filled with 5 units of fruits each – one with only Apples & other with mixed fruits. Which basket would you choose from? The one filled with only Apples or the one with the mixed basket of fruits?

The answer would be simple- any rational person would choose a mixed fruit basket simply because it contains of various different fruits. The person would get bored and would not like to eat 5 Apples at a time from the first basket. It may also be possible that the person may not have a liking towards the taste of Apple. In that case, he will have to remain hungry if he is awarded first basket filled with only Apples.

But, if the person is given the second basket, he may get to cherish different fruits with different taste and flavours. Even if the person does not have a liking towards a particular 1 or 2 specific fruits from the mixed fruit basket, he has the option to fill his stomach with remaining different varieties of fruits.

Diversification of Equity Portfolio:

Same is the correlation between the above example of mixed fruit basket and diversification of equity portfolio. Just as the person opting for the second basket of mixed fruit, who did not like 1 or 2 fruits even from the mixed fruit basket, could contain his hunger by consuming remaining varieties of fruits – even an investor could shield his portfolio performance and movement from the dominance of a particular stock(s)’ performance.

De-risking of Portfolio:

In equity markets, diversification is needed to de-risk the portfolio from the risks and uncertainty revolving around any specific company’s stock. Also, an under-diversified portfolio is vulnerable to movement & fluctuation of the limited number of constituent stocks in one’s kitty. The returns of an under-diversified portfolio could be affected negatively, if one of the major constituent in the portfolio witnesses any sort of setback or slowdown or even frauds as experienced recently by shareholders of Satyam Computers. This shows that even financially sound companies with good past management track record can also go down under or get stuck in trouble by any kind of fraud or mismanagement issues.

Going much deeper into the topic of diversification, one can also create and tweak diversification strategy depending upon one’s goals, objectives & risk profile. Diversification of an equity portfolio could be of two types:

1) Sector Allocation
2) Staggering by Time.

Sector Allocation:

This form of diversification relates to buying stake of companies operating in various different sectors and industries. This form of diversification shields one’s portfolio from the exposure and risks related to performance and prospects of a particular sector of the industry. Many-a-times, particular business operations are exposed to performance according to the seasonal nature of markets. During such times, the performance of the company may get affected during the season period of lean operations or demand for their goods or services.

Why is Sector Diversification needed?

Sector wise Diversification is needed in long-term investment as the investor is willing to wait & hold the portfolio for a longer-duration of time or until his pre-set targets are achieved. This long-term investment can span across few years or even more. During such times, in this constantly changing environment, various sector of the economy come into bullish TREND & diminish from the buzz due to various factors like seasonality, slowdown, etc. The trend keeps changing among various sectors depending upon various internal and/or external conditions related to the economy in general.

Like, for example, at one point of time, IT sector was doing very well. But with recent recessionary environment in US, it is more likely that even the IT sector may witness a slowing demand for their services as their clients tighten their fist to curtail & control expenses. Thus the IT sector was prone to external environmental conditions prevailing in overseas markets.

Examples of Sector Diversification:

1) Highlights of Defensive stocks: Let us take another example, currently in the ongoing bear phase, FMCG sector has shown better resilience to downturn due to their nature of dealing in the space of inevitable fast-moving consumer goods which may be needed in daily sustenance of life. At the most, consumers may opt to stop using expensive soaps and switch to cheaper soaps, but they won’t absolutely stop using them in their routine life. Same logic goes for Pharmaceutical sector, where people won’t stop consuming medicines even in a bearish and slowing market conditions.

But, in the last bull phase, the above mentioned so-called ‘Defensive stocks’ had under-performed markets based on their nature of slow & steady growth based on routine consumer demand. Markets do not correlate such defensive stocks with bright prospects as in ‘Growth’ stocks. This leads to under-performance of stocks from defensive sectors during bull phases & out-performance during periods of pessimism when defensive sectors are awarded for their dealing in the space of steady business operations.

2) Highlights of Growth stocks: On the other hand, during the last bull phase, we witnessed sharp rallies in stocks related with Commodity businesses, like for example Metals, Crude, etc. on the back of thinking of investors and analysts that these natural resources are up for extinction in the global markets and thus ripe for demand-supply mismatch.

Thus, for an investor with long-term horizon, needs to have stocks from various different sectors so as to ably float through all different business cycles & phases with some degree of cushion strength. If the investor has some stocks from FMCG sector, it would help him to ride through the volatility of bear phase.

Based on above discussion, it could be implied that every portfolio should have around 10-20% investment in DEFENSIVE sector stocks to over-come the over-aggressiveness of remaining sectors. This would provide cushion of safety when the tide turns in opposite direction, as we witnessing right now – in the current bear phase.

Staggering by Time:

Staggering by time is nothing but spreading one’s investments over a period of time in a strategic manner. This strategy helps in curtailing concentration of investments in a short span of time & thus proves a shield by not endangering the investors to the vagaries of market movement in a specific short-term period.

Like for example, many new investors plunged into stocks markets when the indices started coming-off from its peaks recorded a little more than a year ago. When indices started to slump from Sensex 21000 levels and reached 16000 levels, many investors felt it is an opportunity to invest money at lower levels. A large number of people would have invested at such lower levels as well. And it was quite understandable, at that time- based on fundamentals then, that investors sitting on cash would have invested then.

But, what would have happened such investors would have invested all their life’s savings specifically at 16000 levels?

As we know markets plunged further to establish even lower levels to date, these investors would have run out of money had they opted to invest most of their idle funds at higher levels of Sensex16000. Those who would have used the strategy of staggering the investment of their funds at different point of time intervals, would have benefited in spreading their investments in a thin manner at even lower levels, say, at an interval of every 3 months.

You can read more on my detailed views on the approach of Staggering by Time in my first ever posting in this blog with the title ‘Strategy for Investment’.

Sector Allocation Guide:
Given below are various different Sectors in which investors can diversify their funds to de-risk through Sector Allocation strategy:

Core Sector:

Capital Goods & Engineering: 15-20%
Power & Energy Sector: 14-18%
Banking & NBFC: 12-16%
Oil & Gas Sector: 12-14%

Telecom Sector: 8-12%

Non-Core Sectors:

Real Estate & Construction: 8-10%
Information Technology: 7-10%
Pharmaceutical & Healthcare: 5-8%
Automobile Sector: 6-8%
Media & Entertainment: 6-8%
FMCG Sector: 4-6%
Metals: 6-8%

The above is one such presentation of diversifying an equity portfolio based on strategy of Sector allocation. The above does not mean to imply that one must be invested in the entire list of above sector. One can opt for any 6-8 sectors from the above list.

However, it would be preferable if one has some sort of mandatory investments in the all the first 5 sectors of Capital Goods, Banking, Telecom, Power & Oil and Gas. It’s like a Core Sector group. From the remaining list of Non-core sector, one can opt for any 3-4 sectors depending upon one’s likes & dislikes.

Diversification by Market Capitalization:

Another way of looking at Equity portfolio diversification is determining on the basis of a stock’s market capitalization levels– Large cap, Mid-cap and Small cap.

Large cap Stock: Market cap of above Rs.5000 cr.
Mid cap Stock: Market cap in the range of Rs.500 cr to 5000 cr.
Small cap Stock: Market cap of below Rs.500 cr.

Though, this does not exactly specify the rule for determining the market cap of all companies. In bull phase, most of the mid-cap would have been valued at market cap of over Rs.5000 crore. But, in the current bear scenario, not many mid-caps are able to survive above Rs.5000 crore. So, the above formula of determining stocks based on market capital is a highly ‘Relative’ guide. Though, this can be taken as a rough estimate in laying companies unique from each other based on market capitalization of these companies.

Usually, large caps are associated with safety & steadiness during such pessimistic times. On the other hand, mid & small caps are regarded as highly risky and fluctuating during such slowing times.

I would suggest investment in stocks based on market cap for various investors with varied RISK profile as follows:

Low risk Profile:
75-85% in Large caps.
15-25% in Mid caps
Nil in Small caps.

Medium Risk Profile:
65-75% in Large caps
25-35% in Mid caps
0-5% in Small caps

High Risk Profile:
45-60% in Large caps
40-55% in Mid caps
5-15% in Small caps

Correlating 'Sector Diversification' Strategy with my 'Favourite Stocks for Long-term Investment':

In my previous post, i had listed the list of my favourite stocks for long-term investment plans. Now, over here, i will correlate that portfolio with the above discussed strategy on 'Sector Allocation' for Diversifying portfolio:

(A) Core Sector:

Capital Goods & Engineering: 15-20%
Larsen & Toubro: 12%
Bhel: 4%
Thermax: 3%

Power & Energy Sector: 14-16%
NTPC: 5%
Power Grid: 5%
R.power: 3%
Suzlon: 3%

Banking & NBFC: 12-16%
State Bank of India: 6%
R.Capital: 3%

Telecom Sector: 8-12%
R.Comm: 5%
OnMobile: 3%

Oil & Gas Sector: 12-14%
Reliance Industries: 13%

(B) Non-Core Sectors:

Real Estate & Construction: 7-10%
DLF: 4%
HCC: 3%

Information Technology: 7-10%
TCS: 4%
Financial Tech: 3%

Pharmaceutical & Healthcare: 5-8%
Ranbaxy: 3%
Biocon: 3%

FMCG Sector: 4-6%
ITC: 5%

Metals: 6-8%
Sterlite Ind: 4%
Sesa Goa: 3%

Total = 100%

Portfolio Features of the above presentation:

In the above Analysis of Portfolio coupled with Sector Allocation, I have tried to encompass sector diversification at its best to my knowledge. The above portfolio constitutes of Large Caps to the extent of 72% of the portfolio & 28% reliance on Mid-cap stocks, thus favouring Low risk to medium risk investors both. Readers can carry out minor adjustments to the portfolio to suit exactly to their risk profile by few nothces up or down.

11% of the above portfolio is formed of Defensive sector stocks like FMCG and Pharma that shall be useful to shield the investor from the sharp fluctuations and vagaries of the market. 'Core' sectors like Capital Goods & Engineering, Power & Energy, Banking & finance, Telecom and Oil & Gas Sectors constitute 68% of the over portfolio leaving the remaining space for the non-core portfolio sectors.

Portfolio Summary on Sector Allocation:

1) The portfolio constitutes of balanced number of 22 stocks.
2) Large caps: 72%, Mid caps: 28%
3) Core Sectors: 68%, Non-core Sector: 32%
4) Defensive Sector: 11%
5) Reliance + L&T = 25% of portfolio
6) My Core Portfolio Stocks = 50% of portfolio
(Reliance, L&T, SBI, NTPC, PGCIL, RComm, Bhel)

A Request to Readers:

Readers are requested to share their experience with this posting which has integrated stocks discussed in previous topic along with strategies needed for its better implementation to arrive at a balanced portfolio for long-term investment Readers can share their views in the below given 'Comments' Section.

Disclaimer: All data, content and/or reports posted by Viral Rajnikant Dholakia on this site are only for information and educational purpose of visitor/readers of this blog. It does not constitute to be a recommendation/offer/advice to buy or sell assets/securities in any form. Individuals/organizations are requested to take an informed call by consulting their Financial Advisor before acting on any matter/data published on this blog. This blog does not warrant of any kind of accuracy, adequacy and completeness of data, ideas or thoughts published in it. This site and Viral Rajnikant Dholakia assumes no responsibility or liability or loss or damage of any nature for your trading and investment decisions and its consequent results.


Shalu said...

Brilliant!! what can I say? This is the best post i have read so is so detailed. Thanks Bulls....i am learning so much by reading your blog.

doctor_vasani said...

Excellent Article on making a best portfolio for a long term.
Your post is very informative.

Anonymous said...

Hi Bull,
Some how i am not so happy with FT and Onmibile.

FT is not doing so good and also i belive it having some problems with core produtcs

Onmobile - Monitise tie up with icici is some what surprsing. some of Forgin based VAS/Mobiled solution providers are entrying india market and it might damage to rev of indian based VAS providers.

Shabu's said...

Hi Bulls,

Its one of the best and worthy post you made so for. I am sincerely appreciating your devotion to guide the investor community. I am sure that the diversification you proposed will work great. Keep it up and god bless you

Viral Rajnikant Dholakia said...

Dear Shalu,

Your query on what levels to enter HCC was deleted by my by mistake.

But, i am replying you directly over here. You can enter HCC in the range of Rs.32-42 from the long-term horizon.

Traders in this stock should observe a strict Stop Loss of Rs.28/-

Mohit said...


Thanks for great article, I never had much clear idea about diversification of portfolio before this article. Your articles are clear and to the point and explain the point in lay terms.



Mohit said...

Dear Bulls

So you are viral finally you disclosed your name, would you prefer to be called as Bulls :)

Viral Rajnikant Dholakia said...

Yes... Mohit, My name is Viral. I would prefer that Readers call me by the name 'Viral' from now on, instead of BULLS.

So that there is no confusion in future for new readers as to who is BULLS and Viral- which is one and the same.

Antriksh Patel said...

Hi Bull,

Wonderful article. I would like to know one thing, inspite metal sector being necessity for any type of infrastructure development, don't u feel that the percentage allocated to it is highly low. I mean metal anytime is a safe bet and even in terms of demand-supply chain demand will mostly be high. Moreoever being a natural resource it's shortage will increase with respect to time resulting into it's price and hence the profit.

This is just my stron feeling and would like to throw some light on this.


Antriksh Patel said...

Viral, I came to know ur name only after I posted my comments. Keep the blog going. Thanx and good-luck.

Viral Rajnikant Dholakia said...

Dear Mr Antriksh,

Your point in query regarding weightage of Metal Sector in the portfolio is quite genuine & reasonably understandable.

But, i have purposely kept the weightage of this sector relatively lower as Metal prices as a 'Commodity' is highly volatile & tend to stretch overly on both the side - up and down during the respective periods of upturn & downturn. This will lend high fluctuation in the portfolio over longer-term.

Also, when there are downturns in Metal sector, traditionally, it takes longer time to revive from the rot vis-a-vis any other commodity.

Though, nothing wrong in including more of Metal sector in one's portfolio if you can digest a bit higher volatility & fluctuation. You can stretch the Metal Sector Allocation around 10-13% of the over-all Portfolio.

My Picks in the Metal Sector are:

Low to Medium Risk:
1) Sterlite Industries
2) Sesa Goa

A Bit Higher Risk:
1) Tata Steel
2) Gujrat NRE Coke
3) Hind. Zinc

Antriksh Patel said...

Hi Viren,

I am not aware about what is the difference or what makes the company belong to A, B or S group. Can u throw some light on it?


Viral Rajnikant Dholakia said...

Dear Antriksh,

BSE has done groupings of various scrips depending upon the criterions that they fulfil based on various parameters.

'A' and 'B' Group companies are most liquid in nature within such groupings. These are Large companies with past track record of dividend, performance, public holding, volume, etc.

'T' group consists of trade to trade group of securities.

'Z' group securities are stocks which do not comply with rules of SEBI or fail to fulfil listing requirements

It is recommendable to invest only in A and B group scrips for long-term purpose unless you have a liking towards any particular scrip from other segment.


hi viral

the markets are making me mad,the sensex today crossed 10000 level, all the resistance made by the stupid tv analyst are broken down.
when the mkts were on 8000 i missed to buy as this idiots said that it will reach 7000 - 6000.....

now their target is 11000...

what can u say about the current rally...
i dont think it will last long as it's doing what it did last time when it reached 7700 in oct. and bouncing back to 10000 and again crashing......

i have sold some of my stocks.. and i wanted to know whats u r target for sensex for the next few days and after a month

waiting for your reply..


Antriksh Patel said...

Hi Viral,

Thanks for your prompt reply. I was thinking of investing in Bharat Bijlee and Ion Exchange, but now would avoid doing so.

Anonymous said...

to dark night

dude no one is stupid.Some of the TV analysts talked about Bear rally or Bear squeeze.But retail investors consider themselves 'smarter' and hence bite the bullet everytime they play God. Listen to Tv analysts and you will get fair bit of idea.I second your thoughts that not all analysts are perfect but some of them are good.Don't generalize everyone.

Nifty will face resistance crossing 3100.This is bear squeeze and market will correct by 20-25% by Mid of May.

Anonymous said...

Hey antrikish patel

Ion exchange is good bet.Next hot commodity will be water and Ion exchange is in water re-treatment.Remember next world war will be fought for water.So water will replace Oil as the most precious commodity.However, Ion exchange is a long term bet


thanks for d reply anyomonous but im still not satisfied with that answer..

about the tv analyst i would like to say that they are just chamelons nothing else..

i belive only in people like shankar sharma.,dr. krisha,viral ..


Mohit said...

Dear Bulls,

what are your views on current rally , do you think it is entirely bear market rally or you feel that as some signs of improvement from US may convert this rally in to real one or may be part of the rally will sustain.

Please give some idea about markets going forward and when you think we would be close to bottom or say when would be a good time to enter in the markets ......



Rajmars said...

Hey Bulls,

Thanks for such a detailed post on building a robust portfolio. I am sure this PF will last the test of the times. Though I rue not seeing IDFC amongst your picks :-)Further are you planning to come out with a post about potential "multi-baggers"? Looking foreward to your upcoming post on possible future course of markets after the recent upmove.

Shalu said...

Viral, awaiting your next article....EAGERLY!

Shalu said...

Hi Viral, what is your long term view on Hero Honda? The stock has hit its 52 week high yesterday. Thanks.

santy said...

Hi Bulls,

That was a wonderful piece from you . It was very enlightening .
One thing which struck me was the presence of Rcomm in your core portfolio. One one side , I do agree that at current valuations and considering the potential of Telecom sector it does look attractive . Having said that , I feel it pales in comparison with some of its peers in the the core portfolio.This particular stock , in my opinion is the most volatile one . I am sure you must have your own reasons to include this. Can you let me know how it fares in comparison with Bharti airtel/HDFC / HDFC bank?

Please let me know your thoughts in this.

Keep more posts coming.


Viral Rajnikant Dholakia said...

Dear Mr Rajmars,

If you must have noticed, i have included IDFC in my list of 'Favourite Stocks for Long-term Investments'. But, i have not included it in the list of 'Diversified Portfolio'.

There is a reason behind it. I have limited space in portfolio allocation towards the Banking & Financial Sector to the extent of 12% of the over-all portfolio.

So, going by that i have included 9% for Banking Sector (SBI & ICICI) and 3% for NBFC (Reliance Capital).

Now, if i include IDFC to the extent of 3% of portfolio... it would raise my sector allocation in Banking & Financials to 15% from the current 12%. This rise in allocation has to be offset by bringing down the sector allocation in some other industry.

Sometimes, investor has to take CONSCIOUS decisions while creating a portfolio. He/She may have a liking towards some specific stock or sector. But, there are certain clauses & limitations he should draw which ensures that portfolio is well diversified & not over-tilted in favour of any specific stock/sector.

But, if you wish, you can definitely include IDFC in your portfolio & drag the sector allocation in Banking & Financials to 15% at the cost of some other sector/stock. Nothing wrong in that. Frankly, it would not be absolutely unwise to hold stake in Banking & Financial sector to the extent of 15% of one's portfolio.

In fact, valuations of IDFC are lucrative enough to be bought in the range of Rs.45-55 levels for the long-term investment.

Viral Rajnikant Dholakia said...

Dear Shalu,

With Reference to your query on Hero Honda, the company has best fundamentals in the 2-wheeler space. It is a market leader in this space, currently way ahead that its nearest competitors Bajaj Auto & TVS.


Speaking about performance of its stock price, it has come out as a sheer out-performer in the ongoing bear market scenario. On the other hand, same can not be called for other two of its competitors.


The valuations of Hero Honda are quoting way higher than its counterparts in the same industry. The company's stock is quoting at a Price to Earnings ratio of 21. This is, of course, on the back of better fundamentals in its business operations. In other words, tha valuations reflect most of the optimistic news.


The upside from here could be limited in this stock even if good news continue to flow for the company's stock. Also with the recent launch of 'Nano' by Tata Motors is expected to give stiff competition to two-wheeler markets in next 2-3 years until when the production & market reach of Nano would be thriving by leaps and bounds.

Viral Rajnikant Dholakia said...

Dear Mohit & Dark Knight Abhay,

My next topic is based on both of your queries relating to future market course & targets of Sensex and Nifty.

Currently the posting is in a preparatory mode. And, I will post it as soon as possible from my side.

Viral Rajnikant Dholakia said...

Dear Mr Santy,

Your point is truly valid in terms of your concern on my including Rcom in the 'Core' portfolio list.

But, looking at the current valuations it is too good a pick to be not included in the 'Core' portfolio at prevailing price point.

Comparing with Bharti/HDFC/HDFC Bank:

I would like to point out over here that, in the same posting i have also mentioned that investors with lower risk apetite can opt Bharti instead of Rcom.

But, frankly, i am not so convinced to buy Bharti at current valuations. I would be more comfortable to Buy Airtel stock in the range of Rs.350-450.

Likewise, you have also asked me to compare placement of Rcom in the 'Core' portfolio category vis-a-vis other prospects of other large-caps like HDFC/HDFC Bank.

Since i have already included SBI in my 'Core' portfolio list, i did not include other Banking stocks in the list of those 7 Favourites of SBI, NTPC, Power Grid, RIl, L&T, BHEL & Rcomm.

You can argue HDFC Ltd is a NBFC. But i preferred to include stocks from as many diverse sector as possible in the 'Core' portfolio list of stocks itself. That meant inclusion of 1 Telecom stock inevitable in my list of 'Core' portfolio, looking at the fast growth of Telecom sector in India.

Anyways, Mr Santy... we already have included HDFC Ltd in the 'Non-core' portfolio list of stocks.

ICICI has its presence felt in 'Non-core' list, whereas risk-averse investors can opt for HDFC Bank instead of ICICI. Valuations wise HDFC Bank still remains much expensive as compared to ICICI.


Initially, i had my own share of doubts & suspicions for ICICI Bank during the crisis period of October 2008. I was wondering whether the bank would sail through in such tough times. This feeling was taking shape with panic in its stock price. But, now i have little concerns on this aspect & am pretty confident that the company would easily sail through even if there is yet another round of panic & trauma.

Altaf Rahman said...

Its a brilliant article. Explanations apart, the portfolio mentioned will provide a starting step to many new investors. I would have preferred the Cap Goods to contain many more companies as they are too good to be missed, like IVRCL, GMR, Punj Lloyd. However I respect the authors specific list and also know many additions, substractions can be proposed by anybody. So I ask ppl not to take note of my suggestion. Also I noticed Refining sector is missing from the portfolio. Can you pls explain Bulls?

Anonymous said...

Hi Mohit,

This is bear rally or in technical terms it is called bear squeeze.In bull market,when market rises,weak hands exit the stock early and book gains very early,similarly in bear market,during technical bounce back (bear rally),weak hands panics and squares off short positions which results in bear rally.Bulls take advantage of this panic and pushes bears to the wall,which results in bear squeeze.But strong hands(like in bull market) will not square off short positions,rationale being, fundamentals are still weak and technically market will go down.Markets have corrected by 20-30% after polls.So brace yourself for one down swing.Sensex will revist oct/mar lows.Its inevitable and screen will show you 7800-8100 Sensex after polls.

Viral Rajnikant Dholakia said...

Dear Altaf Rahman,

Thank you for your comments on the post.

In my previous posting on 'My Favourite list of Long-term Portfolio', i had clearly mentioned that Punj Llyod is not taken into consideration into the 'Core' portfolio list as we have already included a heavy weight from a somewhat related industry in the form of L&T. So, to avoid duplication of stock from same area of operation, i've avoided Punj Llyod. However, strict comparison between L&T and Punj Llyod is not feasible as Punj Llyod has more of its operations concentrated in building & maintaining infrastructure of Oil & Gas companies wheras L&T has diversified presence in over-all infrastucture, largely domestic led.

Instead of IVRCL, i have opted to include HCC which is also involved in construction related activities of Power sector.

And, last but not the least... you said that i missed including 'Refining' related stock in the portfolio. What better & bigger than Reliance Industries could we have in the portfolio to whom i have allocated a major 13% of the over-all portfolio.

Shalu said...

Hi Viral, in your opinion, which small cap stock/s, if held over long term period can give substantial gains? Thanks

Santy said...

Hi Viral,

I see that yours is a medium-risk profile portfolio. What would be the changes you would make to your portfolio, if you were to switch to a high risk one?