We invest in businesses, not stocks

Our Investment Approach

We have an absolute return orientation towards investing and focus on investing in quality businesses with superior economics run by a capable management team with integrity and passion. Our stock selection strategy is bottom-up and sector agnostic.

Our selection methodology focuses on proprietary research of companies that are well-managed and financially disciplined, with a strong growth potential that can be held for multiple years and traded at a reasonable valuation.

Investment Process

At the core of our investment process lies our ability to identify good businesses and invest for the long term, focusing on wealth creation. We focus on investing in businesses which are scalable, predictable, and have consistent earnings across economic cycles. Our emphasis is on absolute returns rather than on relative market performance.

Universe Population

A broad monitoring list is filtered on a number of quantitative and qualitative criteria. Some of the quantitative filters are return on capital, judicious leverage, free cash generation, etc. On the qualitative side, the filters used are management track record, competitive advantage and business opportunities.

Screening

The universe is then screened to understand the business drivers and analyse historical financials. The process seeks to answer questions like: Is this is a good business? Is this business scalable and sustainable? Is this a profitable business and will it generate free cash flows? This process generates a focus list.

Checklist

A detailed investigation of the focus list allows us to arrive at an investible universe. This due diligence is driven by a comprehensive proprietary checklist that focuses on weeding out businesses that do not meet our stringent criteria. These criteria include position of the industry, position of the company within the industry, the operational and financial aspects of the business, a 5-year future road map and finally, arriving at a fair value estimate.

Size and achievability of opportunity, quality, profitability

Entry barriers, replicability, scalability, industry structure, technology

Integrity, ambition, interest of minority shareholders, adaptability

Caution against destructive capital allocation, focus on cash flows to shareholders

Potential to generate free cash, high return on incremental investments

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