Table 7 below shows a list of our top seven positions (based on asset weight) as on March 31, 2023. 

We have already discussed our investment view for the first five companies in Table 7. Our view on the remaining two companies is as follows:

a. Leading Wealth Management Company

The company is a leading wealth management player and one of the top 3 largest non-bank mutual fund distributors of India. They target the HNI segment with ~INR 5 crores investible surplus, which has a very large addressable market, is not a focus area for large wealth managers and also doesn’t have bargaining power. They have a focused approach with just two products – Equity and Debt Mutual Funds and non-principal protected structured products. Investments in mutual funds are through regular schemes only. Non-principal protected structured products constitutes 1/3rd of the AUM but more than 63% of the revenue and lack of understanding relating to the non principal protected structured products is leading to lower valuations for the company. As equity trail fees increase, the valuations should also increase.

The company has  delivered CAGR of ~20% in revenues and ~30% in earnings  over the last 5 years and the growth target of 25% over then next few years which seems achievable driven by 4 factors – Growth in non of RM, More customers per RM, AUM increase per client and AUM growth due to market growth. We expect some volatility in non-principal protected structured product revenues due to the transition from 3 year to 5 year products, but despite that we expect the company to continue to perform well in its selected segment.

b. Growing Construction Company – Dominant in Gujarat

The Company has an established presence in the civil construction industry with an operational track record of over a decade, culminating in repeat orders from reputed clientele. It is a proxy play on pick up in the capex cycle in India from both Government and Private sector after a long lull due to Covid. After the successful completion of the large and prestigious Surat Diamond Bourse project, the Company is eligible to bid for similar larger sized projects, adding further upside to business growth potential going forward. They have consistently demonstrated execution excellence, adopted both latest construction technology and best labor practices, maintained balance sheet discipline and are selectively capitalizing opportunities to grow sustainably going forward. Medium term earnings growth outlook is positive given the current order backlog and healthy pipeline.. Based on the existing order book and upcoming opportunities, we expect it to deliver a CAGR of 20.1% in revenues and 24.6% in PAT over the next 5-years. 

Home Page

Appendix 1: Performance of the fund for FY2023

Appendix 2: Key Performance Contributors in FY2023

Appendix 4: Analysis of our performance over last seven years

Appendix 5: Outlook for Indian Economy

Among The Most Successful Professionals In Equities; Rated The #1 Technology Sector Analyst In Institutional Investors Polls For A Decade. Highly Respected Among Peers For His Path-Breaking Work And Thought Leadership. Rose From An Associate To Managing Director Within A Span Of Six Years In The Investment Banking Industry

Twenty Years Of Experience Building Top Research Franchises: Seven Years As Managing Director And The Global Head Of Technology At JP Morgan, Six Years As Director And Head Of Asia Pacific Technology At Credit Suisse And Five Years As Founder Of Equirus SecuritiesTrack Record Of Innovation And Excellence In Equity Research

Anchored The Rise Of Credit Suisse  From An Unknown Name In Asian Equities To A Number One Ranked Firm In Asian Equities; Head Of Asia Pacific Tech Research

Credited For Building Top Ranked Global As Well As Asian Tech Research Practice At JP Morgan As MD And Global Head Of Tech Research; Made Defining Contribution To Enable JPMorgan To Move From An Also-Ran Player To A Top Global Name In Equity Research

Built A Very Profitable And Award Winning Indian Equity Business At Equirus From Scratch On A Tiny Budget; Achieved Number Two Ranking In Asia For Idea Performance

Impeccable Track Record Of Identifying True Long Term Winners Ahead Of Others Including Samsung Electronics, TSMC, Infosys And TCS And Guiding Investors To Stay Clear Of Laggards Such As UMC And SMIC Years Ahead Of Consensus.

Mind Of An Engineer, Worked In A Team That Designed The World’s Fastest Microprocessor With A Manta “Paranoia Is The Safest Frame Of Mind”. Awarded Two US Patents.

Work Experience Of Designing The World’s Fastest Microprocessors Based On Cutting Edge Technology For Which He Jointly Holds Two US Patents

Best In Class Business Education From The World Renowned Business School: Double Major In Economics And Finance, Beta Gamma Sigma Cum Laude From The University Of Chicago Booth. Excelled In Studies Under World Renowned Faculty Such As Dr. Raghuram Rajan, Former Governor Of The Reserve Bank Of India