At the core of our investment approach is a fundamental belief: equity markets often swing between extremes, diverging significantly from the underlying progress of businesses. This dynamic creates a powerful opportunity for us to identify the gap between a stock’s intrinsic value and its actual market price. Our investment thesis is built upon several key principles designed to distinguish long-term winners.

Market Perception vs Reality:

• Misjudged capital allocation in the past and subsequent corrective measures
• Incorrect perception of mgt credibility/capability

Management’s Response to ToughCycles:

• Mgt’s stance on improving processes, technological innovation, or rationalizing costs/inventory in a downturn
• Analyzing mgt’s incorrect decisions in adverse situations and remedial measures

Corporate Action Leading to Changes in Business Profile:

• M&A, Regulatory, Monetization of assets, etc.

Ability to Identify Structural Changes in Industry:

• Weaker players perishing, Organised segment’s market-share gains or higher accountability because of GST / demonetization

Decoding Complex Business Structures

• e.g. multiple businesses embedded, Cross Holdings, e.g. M&M

Capital Protection – Valuation comfort

• Emphasis on predictability and on the ability to diligence long-term performance
• Strong focus on downside risk due to industry-specific or firm-specific reasons