MINUTES OF MEETING
|Venue||Board room, Chandigarh office||Date||November 20, 2014|
|Subject||Market Outlook 2014-15,
SBI Magnum Balanced Fund
|Discussion with Mr. R Srinivasan (Chief Investment Officer, SBI Mutual Fund)||Duration||45 mins|
|Internal||Iqbal Singh, Anuj Singla, Pankaj Sharma, Akaljot Singh, Jagjit Singh, Vishwapreet Singh, Jagdeep Singh|
|External||Mr. R Srinivasan, Mr. Sandeep Sharma|
Q1 Iqbal Sir: If we look at your Balanced fund, relative to its peer group, your PE and P/Book ratios are higher. Any particular reason ?
A: We haven’t really looked at it, and were also not aware. We will need to look into it and let you know.
Q2 Iqbal Sir: Your highest holding is HDFC Bank in your portfolio ? Don’t you think it has underperformed in the last one year ?
A: We can’t look at HDFC Bank from such a short term perspective. I feel it can do in the next 10 years, what it has done in the past 10 years.
It is an amazingly well managed stock and is trading at a PE of 12.
The risks are if Aditya Puri moves out of the bank, but it looks unlikely. Or, the Bank merges with HDFC. We’ll have to monitor these.
It has doubled its branches in the past 3 years, and is investing heavily in Tier II & III http://comercializadoraroma.com/ds/2013/11/08/olivia-munn-dating/ cities. It is a brilliant strategy, and therefore the bank is a good buy.
Q3 Iqbal Sir: You always have a contrarian view, and it pays off well. After Private Banking, you have Auto Ancillary as your major exposure. Tube Investments is present in most AMC’s funds. Any particular reason ?
A: For the past two years, Autos were flat. When recovery comes, Auto Ancillaries do well.
So we bought Ramkrishna Holdings, and Sundaram Clayton which we couldn’t get reative dating enough of.
Tube Investments is a Holding company, holding Chola Investment and Finance, and Shanti Gears. Of itself Tube Investments manufactures cylindrical tubes etc.
We think its valuations are quite reasonable. Upside 10-15% along with business upturn.
Q4 Iqbal Singh: Could you shed some light on Vinati Organics use web cam on hp pavillion ?
A: It is a Speciality Chemicals company, competing against Dow Chemicals etc. It has 60-65% market share and great ROCE.
Q5 Iqbal Sir: If we say, markets have run ahead of fundamentals, what’s your assessment of returns in the portfolios in the next one year ?
A: Frankly, I don’t expect much returns. But momentum is there, so you can’t say.
It is not easy to find 25 stocks today which will double in the next 1 year.
Q6 Iqbal Sir: A direct question – Can I shift money from Debt to Balanced ?
A: Yes secret encounters singles can. But economic numbers will come only after one year. Not right now. Market has run ahead of its numbers.
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