EQUITY ADVISORY

We are currently offering a portfolio of large cap stocks that have demonstrated leadership in their respective industries, have consistently grown their top line and bottom line and are operating in an industry with a large addressable opportunity


Portfolio Objectives & Offering

  • Portfolio Objective
    1. To optimize long term risk adjusted post tax post fees CAGR of investment in real term.
  • To be achieved by
    1. Allocating Long Term Capital to Long Term Assets with disciplined focus.
  • By offering of a
    1. Portfolio strategy focused on investing into businesses with established leadership, operating in industries with a large addressable opportunity that presents an opportunity for sustainable, profitable growth.

    Investment Approach & Philosophy

    Investment Approach

    ✔    

    Indian demographics (size of the population), growing affluence (middle class) and low levels of adoption/penetration present a compelling consumption opportunity

    ✔    

    Need for efficiency and lower cost will drive themes such as automation, digitalization, innovation

    ✔    

    Infrastructure spending a must to boost competitiveness and improve productivity

    Investment Philosophy

    ✔    

    Business to Consumer firms

    ✔    

    Strong Parentage, franchise and Intangibles that allows the business to be scalable and durable

    ✔    

    Companies with demonstrated track record of superior capital allocation and superior capital structure

    Key Tenets

    Key Tenets Underling Philosophy
    Sustainability “Intangibles of business” necessary for Sustainable Market Leadership & Growth
    Profitable Growth While growth is key to wealth creation, “Growth without profitability” is destructive (High ROE, ROIC, Cash Flow Generation and Low leverage over a cycle)
    Leadership “Winner Takes it All” Clear Leadership position across quantitative and/or qualitative parameters.
    Large Addressable Opportunities Long term secular growth is achievable, only if there is “large addressable opportunity” available (Low penetration level, high volume growth, premiumization)
    Leadership Traits
    Process Logo

    Qualitative Leadership

    • Management

    • Corporate Governance

    • Strong Franchise

    • Intangibles

    Quantitative Leadership

    • Market Share

    • Assets Value / Capacity / Market Value

    • Sales / Profits

    • Cost / Profitability
    (e.g. Cost of Credit, Cost to income, Cost per unit )

    Process Logo
    Coverage & Selection Process
    TOP 200 companies by market cap
    Top 100 companies by
    Market Cap
    Proven leadership companies with sustainable growth business 40-45 companies
    Next top 100 companies
    by market cap
    Companies with clear segmental market leadership, technological edge or pure play business 5-8 companies
    Selective universe of ~50 leadership companies with sustainable profitability and growth
    Conviction List High conviction and qualitative analytics 25-30 companies
    Portfolio construction Companies in portfolio supported by Investment Thesis(iT) 15-20 companies

    Portfolio Allocation & Risk Management

    We would like to advise a concentrated portfolio of 15-20 diversified businesses.

    Overall portfolio will focus on business leaders operating in industries with a large addressable opportunity leading to sustainable, profitable growth.
    1. Maximum allocation up to 10% at cost value and up to 15% at market value in portfolio to avoid concentration
    2. We may take up to 6 months to invest entire capital or restructure existing portfolio.
    3. Cash and Cash allocation would be residual.

    The key risk to long term portfolio is the Business risk (lack of Intangibles) and Balance sheet risk (Leverage). The key risk mitigant is the selection of companies
    1. With intangibles allowing them to sustain superior profitability.
    2. With superior capital allocation policy
    3. With secular growth opportunities