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Investment Philosophy

An alternative recipe for investing in India.

Our drive to select the right stocks

We believe in “Value Investing” philosophy of buying stocks which are trading at a significant discount to their Intrinsic Value (Fair Value) and holding it for the long term.

However, a mere discount to Fair Value is not the only criteria for our decisions. We evaluate each idea on several parameters and make a commitment when we are satisfied with our evaluation of each of those.

Our stock selection is driven by the following parameters

High quality of business

We define Quality business is the one which has long term competitive advantage and earn returns over longer period.

Competent and ethical management

We prefer to invest with managements who are ethical and fair in conduct with all stakeholders and would treat them the same way as they would like to be treated if positions were reversed.

Long term growers

Business should be able to grow above average rate for long period of time in structurally attractive industry.

Attractive valuation

Business valuation should have reasonable discount to our estimate of fair value. Reasonable discount would differ for different type of businesses based on their risk profile.

Our portfolio building approach

  • Bottom-up portfolio construction

We build the portfolio completely from the bottom up, not based on any Index. Because of this, our portfolio’s overlap with indices tends to be very low and sector exposures tend to be very different from the Index.

  • Long -term investment horizon

We are patient, long-term investors. We seek to take advantage of significant stock price declines due to poor near-term business results, focusing instead on the long-term intrinsic value of the business.

  • Compelling Opportunities

We are not afraid to hold cash
at times when underlying valuations are elevated. This provides us with the ability to act quickly when market sentiment swings to the other extreme and short-term market disruptions provide compelling opportunities from panicked sellers.

  • Risk Management

We limit exposure  to a specific sector / stock to a certain level to manage risk . While this may lead to lower returns, it allows us to manage the portfolio risk within acceptable level.