Table 7 below shows a list of our top seven positions (based on asset weight) as on March 31, 2024.

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

a) Top Tier Private Bank

Our investment thesis was driven by the change in MD leading to a culture change with high focus on granularization of the book and sorting of the NPA mess. All parts of our thesis have played out well: Contribution of retail, rural and business banking books has gone up to 70% of total advances as compared to 60% three years ago. Also, the contribution of low yielding overseas books has simultaneously come down. Gross NPA ratio, which was at 6.7% as of March 2019, has come down to less than 2.16% as of March 2024. Also, the exposure to vulnerable accounts and restructured books over the period has come down, reducing the overall riskiness of assets. The bank has been effectively able to leverage technology, and its tie-up with various players for credit cards has been a huge success resulting in significant increase in credit card spend market share in the last one year. Our thesis has played out on all counts and RoA has improved to 2.37% in FY24 and the stock has undergone significant rerating. The bank continues to surprise with its industry leading growth (16% in FY24) in spite of significant increase in repo rates and ROA numbers.

b) South-based Old Private Bank

It is a turnaround story led by the appointment of an ex-ICICI banker as an MD in Oct, 2020 for three years. Even though the bank is privately held, it used to run like a Public Sector Bank. Post the appointment of the MD, he made numerous changes in the bank. He brought more people from top private banks in the top & second level of management. More importantly, he changed the credit culture of the bank. He gave the highest priority to asset quality rather than growth. He started to run down the book which seemed risky to him. He focused on collections, tech, and building sustainable franchises. The MD resigned citing personal reasons, completing his three-year term in Oct 2023. The new MD has done a similar type of turnaround at KVB and we believe all the blocks are well-placed for him to take the bank to another level. We believe he is a good choice to continue the legacy of the bank. The stock continues to trade below its book value.


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Appendix 1: Performance of the fund for FY2024

Appendix 2: Key Performance Contributors in FY2024

Appendix 4: Analysis of our performance over last Eight 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