I was waiting for results of SRF and MAZDA, and here're they are:
- SRF has declining sales and profit for last few quarters, and there's risk to lower revenues due to carbon credit benefit expiring next year.
- While I believe in SRF, but as I mentioned in recent post, I want to reduce my exposure in an individual small cap until I learn more, and to reduce risk of being into value trap.
- SRF has reduced half-yearly dividend from Rs 7 a share to Rs 5 a share, which brings down my yield to < 5%
Now, MAZDA
- MAZDA has shown superb growth in both sales and profits yet again
- It has a better outlook compared to SRF
- Expect to get better dividends due to better profits
Hence, without too much deliberation, I'm deciding to sell ~50% stake in SRF and re-allocate that money into MAZDA. This will even out and make the contribution of both these stocks at 5% each in my portfolio.
However, since on Monday, both these stocks will have a result reaction, I'll wait and watch. I plan to place orders to sell SRF above Rs 235 and by MAZDA below Rs 98, but if they don't trade, I'll wait so that market digests news of results, and hopefully in about a month, they'll again trade at reasonable prices.
Since I have some cash, I won't mind buying additional 3% stake of MAZDA before cash proceeds from SRF come in. I can wait to sell SRF at reasonable price, and also because I've learnt that SRF makes highs just before the result and crashes thereafter...
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