Who is Mukul Agarwal?
Mr. Mukul Mahavir Prasad Agarwal is a Member at Multi Commodity Exchange of India Ltd., a Member at National Stock Exchange of India Ltd. and Member-Derivatives Segment at Bombay Stock Exchange.
He is on the Board of Directors at Supreme Infrastructure India Ltd., Namah Capital Resources Ltd., Param Capital Research Pvt Ltd. and Pranam Reality Pvt Ltd.
He is also one of the top investors in Indian stock market and have invested crores of money in stock exchanges. In this article I will discuss the portfolio stocks of Mukul Agarwal and also try to figure out his investment style based on the stock selection.
In case you are interested in portfolio of other top investors like Rakesh Jhunjhunwala and Vijay Kedia out there then you can read below article of mine.
Read Portfolio of Top Investors and Mutual Funds
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Interesting points about Portfolio
Based on the portfolio of Mukul Agarwal we can conclude below points. This portfolio does provide us useful insight into thought process of investors and sectors they put emphasis on.
1. Focus on Food Processing
The portfolio has two direct food processing stocks like ADF Foods and Tasty Bites. Along with these two direct ones there are additional companies like Parag Milk and Modi naturals which can be clubbed in to this category.
All these companies provide food items consumed in one form or other. The portfolio has good number of these stocks. Note GM Breweries can also be put in this category as well. So food consumption has been given good importance in the portfolio.
2. No Pharma Stock or Cement Stock
The portfolio has stocks from all major segments like IT, Private Banks and Financials also. But it does not have a single stock from Pharma space. This is quite interesting as well as surprising as well.
Out of 30 odd companies in his portfolio he has not put money into any Large or Mid Cap pharma or companies related to it. He does not company related to Hospitality sector. There are in fact couple of companies from these sectors.
So for some reason (may be push for Generic drugs and increasing FDA issues) he has chosen to play safe and invest in hospitality sector. Similarly the lack of Cement stocks is also surprising. He does have a construction company.
3. Diversification of Portfolio
In first point we mentioned how Food Processing sector was focused by Mukul Agarwal. Having said that he has diversified his picking in that sector as well. He has invested in ADF Foods which primarily exports Indian Cuisine to foreign countries.
The other companies like Parag Milk Foods focus on Milk and Milk products. It is into different business segment than the ADF Foods. Similarly other companies also have different operating areas. In this way he has diversified the portfolio in same sector.
Also if you see overall portfolio he has diversified it into many sectors. Some sectors are not so well known as well. So along with mainstream sectors he has put his trust into unknown sectors as well.
What Portfolio tells about Investment Strategy?
Now we will try to understand the investment style of this eminent investor Mukul Agarwal. We will try to find out the thought process of the investor based on his investments.
1. Focus on Internal Consumption
Internal Consumption is one theme which is strongly represented in his portfolio. Above I have mentioned the presence of Food Processing theme on his portfolio. This food processing theme is part of Internal Consumption theme.
Along with that the Hospitality theme is also part of this Internal Consumption. So you can clearly see so far 6 companies are part of this theme.
2. Monopoly Companies are loved
He has love for Monopoly companies or companies which have unique business which will be in demand going forward. One such area is water treatment. He has picked ION Exchange which is a water treatment company.
The other being KDDL. KDDL is World largest manufacturer of watch dials. So if you are wearing a watch from any brand the chances are that dials are made by KDDL. This makes it unique company with monopoly business.
Modi naturals is yet again a unique business top company he has in his portfolio. It is the largest natural oil processing company of India. So Mukul Agarwal has love for Monopoly companies with good business outlook operating in unique business.
3. Focus on Sectors of Future
Mukul Agarwal has focus on sectors of future. India has the largest population after China and is going to surpass China in near future. With this kind of population the consumption of food items and things related to food will be on increasing side.
Note the increase in money in hands of consumer will increase this food consumption as well. So to bank on this thought he has put unique companies operating in this segment.
The other segment being Plastics. Hate it for Global Environment reasons but it is here to stay. He has companies from this sector and there are more than one company from this sector in this portfolio.
Conclusion
You can review the portfolio and pick the stocks which interests you and analyze them in details. The fact that someone like Mukul Agarwal has invested in the company does give a comfort while making final decision.
But the price at which he has invested in these companies is also important. So make sure you you do track the companies and add them to your watch list before making a decision to invest or not.