Bonanza Portfolio Value Strategy

Value Strategy

Stock Selection Process

Sector & Stock Identification

• Identifying sectors and stocks based on fundamental and technical screeners
• Focus on companies with market capitalization greater than ₹1000 Crores and preferably below ₹50000 Crores

Growth & Profitability Parameters

• Consistently improving topline growth, preferably 10%+ YoY
• Expected profit growth of 25%+ YoY
• Return ratios above 15%
• Identification of individual growth triggers

Long-Term Investment Focus

• Core set of stocks with long-term opportunities
• Strong market position
• Businesses with compounding characteristics

Qualitative Screening

• 60-70 companies complying with the qualitative framework
• Sustainable business growth catalysts over the next 6-8 quarters

Evaluation Parameters

• Efficiency in the use of capital
• Valuations with a good margin of safety
• Liquidity analysis

Portfolio Construction

• Final portfolio of 15-25 stocks with the best growth scenarios

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Equity Portfolio Management Process

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Value Strategy Performance vs Nifty 50 TRI

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Top Multi-Bagger Picks

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Top 10 Holdings & 5 Sector Allocation

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Top 5 Sector Holdings & Category Allocation

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Exit Strategy

• Management deviation from plan
• Changes in macro or fundamentals making sectors or stocks risky
• Sector headwinds
• Saturation in earnings growth catalyst
• Availability of relatively better opportunities
• Changes in macroeconomic conditions
• Valuation levels compromising future outperformance

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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 Management

• Mostly staggered approach used for investments
• Revalidation of business fundamentals if any stock falls more than 30% from average purchase price
• Staggered approach for entry and exit
• Dynamic portfolio diversification strategy based on market volatility and environment

Governance

• Quarterly review and revalidation of stock conviction
• Monitoring promoter track record and related-party transactions
• Continuous review of macros, stocks, growth triggers, beta and quant models, sector rotation, and overall portfolio composition

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Fee Structure

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Our PMS Performance vs Nifty 50 TRI

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