Bonanza Portfolio Value Strategy

Value Strategy

Stock Selection Process

• Identifying Sectors/ Scripts based on Fundamental and Technical Screeners Greater than Mcap of 1000 Crores and preferably below 50000 Crore
• Consistently improving Top Line growth preferably 10% plus (YOY) Expected Profit Growth of 25% plus (YOY) Return Ratios above 15% Individual Growth Triggers
• Core Set of Stocks Long Term Opportunities Strong Market Position Business with compounding characteristics
• 60-70 companies complying our qualitative framework with business growth catalyst sustainable over 6-8 quarters
• Evaluation Process Efficiency in use of Capital Valuations with good margin of safety Liquidity
• 15 -25 stocks having best possible growth scenarios

Equity Portfolio Management Process

Value Strategy Performance Vs Nifty 50 TRI

Top Multi-Bagger Picks

Top 10 Holdings & 5 Sector Allocation

Top 5 Sector Holdings & Category Allocation

Exit Strategy

• Management Deviation from Plan
• Changes in Macro /fundamentals that makes the sector/ stocks at risk
• Sector headwind is on
• Earning growth catalyst is saturated
• Relative better opportunities – Cost of opportunity
• Change in macros
• If valuations have reached levels which may compromise outperformance

Risk Management Policy

Concentration Risk

• Investment of not more than 10% in any stock
• Exposure of not more than 25% in any sector at cost level
• Diversified portfolio consisting of 15+ stocks to minimize risk

Drawdown

• Mostly staggered approach used for investment
• Revalidation of business if any stock falls more than 30% from its average purchase price
• Use of staggered approach for entry/exit
• Dynamic portfolio diversification strategy related to market environment like volatility

Governance

• Review of stocks and revalidation of conviction on ideas on quarterly basis
• Promoter track/reputation records, Third party transactions
• Continuous review of macros, stocks, growth triggers, Beta and quant model, sectoral rotation, overall portfolio composition (if stock is adding beta, sector allocation, impacting volatility etc.)

Fee Structure

Our PMS Performance VS Nifty 50 TRI

The chart below illustrates Rs.1 Crore invested in July 2010 is worth Rs. 10.35 Crore as on 29th February 2024. For the same period Rs.1 Crore invested in Nifty 50 TRI is now worth Rs. 4.80 Crore.