High Quality Consistent Compounders

High Quality Consistent Compounders strategy focuses on investing in Indian listed small and mid cap businesses run by high quality managements with strong governance standards and sustainable earnings growth. The portfolio follows a private equity style investing approach in public markets with a concentrated portfolio of around 20 companies and a long term holding period typically ranging between three to five years. The investment process begins with identifying sector tailwinds such as strong demand drivers, benign regulations, consolidation in industries and completion of major capital investment cycles. Companies are selected based on high quality business operations, strong cash generation, high return on capital employed and long term earnings growth. The strategy conducts deep promoter diligence covering management integrity, corporate governance, industry positioning and background checks of promoters and related parties. Strict pricing discipline is applied where investments are made only when shortlisted companies reach conservative valuation levels and at discounts to historical or industry valuation multiples. Portfolio construction is patient and phased with initial investments across about fifteen to seventeen companies with allocations of around two point five to five percent per company and later increased allocation to outperformers with periodic rebalancing based on business performance. Stock examples reflecting this approach include Ajanta Pharma, Sundaram Finance, Kirloskar Oil Engines, FIEM Industries and Voltamp Transformers. Sector agnostic. Small and mid cap focused.