Latest news with #ETMarketsPMSTalk
Economic Times
21-07-2025
- Business
- Economic Times
Cash flow, return on capital key to identifying wealth creators: Priyankar Sarkar of Square 64
In the latest edition of ETMarkets PMS Talk, Priyankar Sarkar, Co-Founder of Square 64 Capital Advisors LLP, shares insights into his investment philosophy and strategy that have helped his newly launched multicap fund deliver impressive returns. Sarkar emphasizes the importance of consistent cash flow generation and incremental return on capital employed (ROCE) as key metrics for identifying long-term wealth creators. Focusing on a disciplined, value-oriented approach, he highlights how combining patience with selective investing in high-quality businesses can unlock sustainable growth over time. Edited Excerpts – ADVERTISEMENT Q) Thanks for taking the time out. Please take us through the performance of the fund in June when you Multicap fund clocked more than 19% return?A) Leading the gains is our largest holding, which has surged by an impressive 61.6%. It is a company in the aerospace and defence space with a very healthy and growing order book. A mid-sized upstream oil and gas company, which holds the second-largest weight in our portfolio, has also shown strong performance with a 26.5% increase. Our third-largest company is a life insurance company that is part of the Nifty 50 index, which had modest gains of ~5% for the month of results underscore our balanced approach, capturing high-growth potential while maintaining exposure to stable, long-term value creators. ADVERTISEMENT Q) It is a newly launched fund, but the numbers are impressive especially for the past few months. Please take us through the investment objective?A) Our goal is to compound capital steadily over time without taking undue risk. We follow a disciplined, value-oriented approach, focusing on high-quality, consistent compounders temporarily overlooked by the disconnect often creates a favourable risk-reward equation, allowing us to enter at attractive valuations. We believe growth and value are joined at the hip, true value lies in sustainable growth trading at attractive prices. ADVERTISEMENT Simply put: buy quality when it's out of favour and let compounding do the heavy lifting. It's not about chasing momentum, but about patience, conviction, and a long-term perspective. Q) Being sector and market cap agnostic gives you wide flexibility. How do you ensure diversification and risk management without restricting yourself to specific segments? ADVERTISEMENT A) We do run a fairly concentrated portfolio, but we ensure adequate diversification by limiting exposure to any one sector, typically, we avoid having more than two holdings from the same value-conscious investment style acts as a natural risk filter. We're not in the business of paying up for growth, which helps us avoid frothy valuations and the risks that come with bottom-up discipline allows us to stay selective, reduce downside risk, and compound capital efficiently over the long term. ADVERTISEMENT Q) How do you assess management quality, especially when investing in family-owned companies versus professionally run firms? Are there different evaluation parameters?A) Management quality is a cornerstone of our investment process. We prioritize companies led by leadership teams with a proven track remain vigilant for red flags such as frequent equity dilution or questionable related-party transactions. Additionally, in professionally managed firms, incentive alignment plays a crucial role; we carefully assess ESOP structures and compensation policies to ensure management's interests are closely tied to long-term shareholder value creation. Q) You hold a portion of your portfolio in liquid ETFs. Could you share your strategy behind maintaining cash equivalents in your portfolio? Is it tactical or a consistent allocation? A) We currently maintain a portion of the portfolio in liquid ETFs, and this is a tactical decision rather than a structural an old market adage in the equity markets that says you either get good prices or good news, seldom at the same the current environment, particularly in the mid and small-cap segments, valuations are stretched, and sentiments are running calls for a degree of restraint. We believe it's prudent to keep some dry powder ready. This cash position gives us the flexibility to deploy when more compelling opportunities emerge. Q) Let's talk about markets. Well, we have seen volatile 1H2025 but bulls managed to have an upper hand. How do you see markets panning out for the rest of the calendar year? A) There are numerous macroeconomic factors in flux, ranging from inflation dynamics and interest rate policies to global geopolitical this complex backdrop, the market appears somewhat elevated at current levels. This suggests the possibility of a meaningful correction, either in terms of price or time, before we can expect a sustained such an environment, it has become increasingly difficult to scout for genuine value opportunities. Q) What is your wealth creation mantra which have worked for you? It could be a ratio or metric which you always track. A) Over the years, I've realized that cash flow is paramount. If a company has generated positive operating cash flow consistently for the past decade, it's a strong signal that's hard to overlook, as very few companies meet this benchmark. Alongside cash flow, I closely track incremental Return on Capital Employed, which has been a reliable metric in identifying quality wealth creators. (Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
21-07-2025
- Business
- Time of India
Cash flow, return on capital key to identifying wealth creators: Priyankar Sarkar of Square 64
In the latest edition of ETMarkets PMS Talk, Priyankar Sarkar , Co-Founder of Square 64 Capital Advisors LLP , shares insights into his investment philosophy and strategy that have helped his newly launched multicap fund deliver impressive returns. Sarkar emphasizes the importance of consistent cash flow generation and incremental return on capital employed (ROCE) as key metrics for identifying long-term wealth creators . Focusing on a disciplined, value-oriented approach , he highlights how combining patience with selective investing in high-quality businesses can unlock sustainable growth over time. Edited Excerpts – Q) Thanks for taking the time out. Please take us through the performance of the fund in June when you Multicap fund clocked more than 19% return? 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Paperela Undo A) Leading the gains is our largest holding, which has surged by an impressive 61.6%. It is a company in the aerospace and defence space with a very healthy and growing order book. A mid-sized upstream oil and gas company, which holds the second-largest weight in our portfolio, has also shown strong performance with a 26.5% increase. Our third-largest company is a life insurance company that is part of the Nifty 50 index, which had modest gains of ~5% for the month of June. Live Events These results underscore our balanced approach, capturing high-growth potential while maintaining exposure to stable, long-term value creators. Q) It is a newly launched fund, but the numbers are impressive especially for the past few months. Please take us through the investment objective? A) Our goal is to compound capital steadily over time without taking undue risk. We follow a disciplined, value-oriented approach, focusing on high-quality, consistent compounders temporarily overlooked by the market. This disconnect often creates a favourable risk-reward equation, allowing us to enter at attractive valuations. We believe growth and value are joined at the hip, true value lies in sustainable growth trading at attractive prices. Simply put: buy quality when it's out of favour and let compounding do the heavy lifting. It's not about chasing momentum, but about patience, conviction, and a long-term perspective. Q) Being sector and market cap agnostic gives you wide flexibility. How do you ensure diversification and risk management without restricting yourself to specific segments? A) We do run a fairly concentrated portfolio, but we ensure adequate diversification by limiting exposure to any one sector, typically, we avoid having more than two holdings from the same space. Our value-conscious investment style acts as a natural risk filter. We're not in the business of paying up for growth, which helps us avoid frothy valuations and the risks that come with them. This bottom-up discipline allows us to stay selective, reduce downside risk, and compound capital efficiently over the long term. Q) How do you assess management quality, especially when investing in family-owned companies versus professionally run firms? Are there different evaluation parameters? A) Management quality is a cornerstone of our investment process. We prioritize companies led by leadership teams with a proven track record. We remain vigilant for red flags such as frequent equity dilution or questionable related-party transactions. Additionally, in professionally managed firms, incentive alignment plays a crucial role; we carefully assess ESOP structures and compensation policies to ensure management's interests are closely tied to long-term shareholder value creation. Q) You hold a portion of your portfolio in liquid ETFs. Could you share your strategy behind maintaining cash equivalents in your portfolio? Is it tactical or a consistent allocation? A) We currently maintain a portion of the portfolio in liquid ETFs, and this is a tactical decision rather than a structural allocation. There's an old market adage in the equity markets that says you either get good prices or good news, seldom at the same time. In the current environment, particularly in the mid and small-cap segments, valuations are stretched, and sentiments are running high. That calls for a degree of restraint. We believe it's prudent to keep some dry powder ready. This cash position gives us the flexibility to deploy when more compelling opportunities emerge. Q) Let's talk about markets. Well, we have seen volatile 1H2025 but bulls managed to have an upper hand. How do you see markets panning out for the rest of the calendar year? A) There are numerous macroeconomic factors in flux, ranging from inflation dynamics and interest rate policies to global geopolitical developments. Given this complex backdrop, the market appears somewhat elevated at current levels. This suggests the possibility of a meaningful correction, either in terms of price or time, before we can expect a sustained rally. In such an environment, it has become increasingly difficult to scout for genuine value opportunities. Q) What is your wealth creation mantra which have worked for you? It could be a ratio or metric which you always track. A) Over the years, I've realized that cash flow is paramount. If a company has generated positive operating cash flow consistently for the past decade, it's a strong signal that's hard to overlook, as very few companies meet this benchmark. Alongside cash flow, I closely track incremental Return on Capital Employed, which has been a reliable metric in identifying quality wealth creators.
Time of India
29-05-2025
- Business
- Time of India
ETMarkets PMS Talk: PIPE and Value strategies delivered 30–37% CAGR over 5 years - Anand Shah reveals growth drivers
Live Events (You can now subscribe to our (You can now subscribe to our ETMarkets WhatsApp channel Despite the evolving market landscape and bouts of volatility, disciplined investing continues to deliver. In this edition of ETMarkets PMS Talk, we speak with Anand Shah, Chief Investment Officer – PMS & AIF at ICICI Prudential AMC, whose PIPE and Value strategies have clocked an impressive 30–37% CAGR over the last five an exclusive conversation, Shah breaks down the core investment philosophies, highlights key growth drivers, and explains how bottom-up stock selection, valuation discipline, and a long-term mindset have been pivotal in delivering alpha and building investor trust. Edited Excerpts –A) The recent volatility in Indian equity markets is largely driven by a combination of global macro uncertainties and geopolitical it is important to view this in the context of a market that has delivered strong returns over the past few years with relatively fewer degree of consolidation was expected and, arguably, healthy. From a medium- to long-term perspective, we continue to be economic fundamentals remain strong, driven by robust domestic consumption , infrastructure push, and digital believe volatile times offer opportunities for long-term investors to build positions in fundamentally strong businesses at more reasonable valuations.A) The March 2025 quarter has offered a mixed earnings picture. On the positive side, sectors such as banking, capital goods, and consumer services have shown resilience, supported by improving credit growth, operational efficiencies, and healthy balance there have been disappointments too, particularly in pockets of the export and discretionary consumption space, where demand has been more are seeing more divergence in earnings this quarter. This underscores the need for selective, bottom-up investing and a stronger focus on valuation discipline in this environment.A) We remain structurally bullish on Indian equities. Despite near-term global headwinds, India offers a compelling long-term growth story supported by favorable demographics, formalization of the economy, digital adoption, and a strong investment cycle led by both public and private current valuations in some segments, especially in mid and small caps, are elevated compared to historical a diversified portfolio and a disciplined investment approach, will be key to navigating this cycle and generating sustainable wealth.A) We see strong earnings potential in capex-linked sectors over the next few years. Infrastructure, financials, and consumer services are particularly especially large banks, are set to benefit from economic expansion and improving credit demand. Consumer services are seeing tailwinds from rising disposable incomes and evolving consumption infrastructure continues to be a structural theme backed by government push and rising corporate these are not defensive in the traditional sense, their long-term fundamentals and policy support make them relatively more predictable in an otherwise uncertain environment.A) We have had an extended bull run since the pandemic, with very limited drawdowns until recently. A phase of moderation was should recalibrate their return expectations and focus on the fundamentals i.e. proper asset allocation, portfolio diversification, and staying invested through is inherent to equities, but it also presents opportunities.A) The PMS industry is evolving rapidly, driven by the growing need for bespoke investment solutions, rising HNI wealth, and greater awareness of differentiated strategies beyond traditional mutual investors seek alpha in an increasingly mature market, demand for disciplined, transparent, and well-researched portfolio strategies is is also enabling better portfolio access and reporting, while regulation is enhancing credibility with regards to differentiated offerings. All these factors are expected to propel the PMS industry forward meaningfully.A) At ICICI Prudential AMC, the PMS vertical operates like a boutique within an institution—offering niche, research-intensive strategies under the umbrella of institutional one of the top players in the Equity PMS Discretionary segment is a result of our consistent investment philosophy and the trust of our core investment approach is built around the BMV (Business, Management, Valuation) framework. We focus on quality businesses with capable managements and invest at reasonable valuations.A robust research team supports bottom-up stock selection, while our independent risk team ensures portfolio quality and process-driven approach, combined with a long-term wealth creation mindset, has helped us deliver superior outcomes for our investors, which in turn aids the growth of the PMS Prudential PMS' PIPE Strategy has delivered nearly 37% annualised returns over the past five years, while the Value Strategy has also compounded at around 30% CAGR.A) Over the past five years, both our PIPE and Value Strategies have delivered strong performance. This outperformance is rooted in our disciplined, bottom-up investment approach and a sharp focus on intrinsic PIPE Strategy has benefited from the broader re-rating in the mid- and small-cap segments. Our focus has been on identifying emerging leaders with strong economic moats, robust balance sheets, and credible management look for companies at inflection points where capital infusion can act as a catalyst for growth. Valuation comfort remains a non-negotiable criterion in our stock selection our Value Strategy is centered on investing in fundamentally strong businesses trading at a discount to their intrinsic prioritize companies with sustainable earnings profiles, sound capital allocation, and the potential for long-term these are businesses operating in cyclical or contrarian sectors, where patient capital can benefit from mean reversion and structural both these strategies, our commitment to rigorous research has allowed us to consistently identify and invest in resilient businesses with long-term wealth creation potential.(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
Time of India
23-05-2025
- Business
- Time of India
ETMarkets PMS Talk: India's growth + global devaluation = next bull market - Qode's FY26 outlook
India's structural growth story combined with the looming threat of global currency devaluation could be the perfect recipe for the next big bull run in equities, says Rishabh Nahar, Partner and Fund Manager at Qode Advisors, in this edition of ETMarkets PMS Talk. In an exclusive interaction, Nahar shares how Qode's quant-driven strategies helped their Tactical and All Weather Funds outperform the BSE 500 TRI in April. With a strong emphasis on risk management , data-backed decision-making, and selective risk-taking, Qode's approach focuses on consistent outperformance, particularly during volatile or bearish phases. Play Video Pause Skip Backward Skip Forward Unmute Current Time 0:00 / Duration 0:00 Loaded : 0% 0:00 Stream Type LIVE Seek to live, currently behind live LIVE Remaining Time - 0:00 1x Playback Rate Chapters Chapters Descriptions descriptions off , selected Captions captions settings , opens captions settings dialog captions off , selected Audio Track default , selected Picture-in-Picture Fullscreen This is a modal window. Beginning of dialog window. Escape will cancel and close the window. Text Color White Black Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Text Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Opaque Semi-Transparent Transparent Caption Area Background Color Black White Red Green Blue Yellow Magenta Cyan Opacity Transparent Semi-Transparent Opaque Font Size 50% 75% 100% 125% 150% 175% 200% 300% 400% Text Edge Style None Raised Depressed Uniform Drop shadow Font Family Proportional Sans-Serif Monospace Sans-Serif Proportional Serif Monospace Serif Casual Script Small Caps Reset restore all settings to the default values Done Close Modal Dialog End of dialog window. From managing downside through gold and puts, to identifying high-conviction growth stocks, Nahar explains why volatility isn't risk—and why India is uniquely positioned for long-term equity market gains as global macro headwinds continue to shift. Edited Excerpts – Q) Thanks for taking the time out. Qode's Tactical Fund and All Weather Fund outperformed the BSE 500 TRI in April — what were the key drivers of this strong performance? by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like An engineer reveals: 1 simple trick to get all TV channels Techno Mag Learn More Undo A) We specialise in risk management, and that played out well for us. We protect the portfolios with an element of gold as well as protection using puts. We were rewarded because of having these positions and exposure. The Qode All weather and Tactical portfolios are pure quant portfolios designed to outperform during bear markets. We have a strong risk management framework in place. Since last year, markets (especially mid- and small-caps) have been elevated, and we were in a risk-off mode. Only in the last few months have we taken some risk on these portfolios. All these decisions are not made subjectively. We have a pure data-driven approach and have done extensive testing with a deep understanding of markets. Live Events Q) What changes or tactical adjustments were made during April that contributed to portfolio resilience? A) Our portfolios are designed to weather bad months or large amounts of volatility. The Qode All Weather, as the name suggests, is designed to see lower drawdowns and outperform during bad times. We did not make any tactical changes, since we are a quant fund our models are designed taking years of data that have seen situations like this in the past. Q) With relatively low beta across the board, how does Qode manage downside risk while still seeking meaningful returns? A) With all weather and tactical, we try to maintain a low beta, but when markets are beaten down and businesses are available at attractive valuations, we are willing to take on risk. We are not afraid to take risk- when the situation is favourable. Our outperformance will come by protecting downside in bad years. To explain this, here is a simple example: Agencies The above table easily shows how drawdowns could affect your returns. Q) Qode Growth and Future Horizons have slightly higher standard deviations — is this due to increased sectoral concentration or style tilt? A) With Qode Growth Fund and Qode Future Horizons, we are looking at buying businesses that are showing strong earnings momentum. In the Growth Fund, we hold a 30-stock portfolio with an average market cap of 8000 crores. These are fairly strong businesses that have shown great execution capabilities in the past. But due to the size of the businesses being smaller, the stock price sees more volatility. With Future Horizon, we are looking to hold 10-12 fundamentally strong businesses with immense growth potential. This is a more concentrated portfolio because we have a lot of conviction in our picks. We understand the business in depth and take a large position in each of them. Because of the larger position sizes, the volatility is higher, but we do not consider volatility as risk. Q) How do you pick stocks? A) Qode Growth Fund, Qode All Weather and Qode Tactical are pure quant funds. Businesses and ETFs are picked based on factors that we think lead to EPS growth. There are three pillars we work around: 1. What to buy (fundamentally strong businesses) 2. When to buy (Valuations) and 3. How much to buy (position sizing) All our quant models are built around this framework. All three strategies are built with a data-driven approach. Our fourth strategy, Qode Future Horizon – we are looking at a quantamental framework because there are lots of great businesses with scattered data or data that's not structured. We look to meet the management and understand the business by taking a deep dive individually in each business. Q) The April edition highlights 'Steady in the storm, stronger in the sunrise' — how does this reflect your macro view heading into FY26? A) Our macro view remains fixed at the growth story for India and Equity markets. With the US debt crisis coming closer, a large amount of US debt is maturing in the next four years. Money printing and devaluation will be a large factor for equities to do well. So, money printing/devaluation plus a strong position for India will fuel the next bull market . Having exposure to assets like equities/gold and real estate (mostly land) will be a key component for individuals to maintain/grow their wealth. Q) What is your outlook for equity markets in Q1 FY26, and how are you positioning your portfolios in response? A) We refrain from having such a short-term outlook because markets are a complex place, and in the short run, factors like demand/supply, war, and trade policies will have a larger impact on their movement. Even if we could model all these factors there is no significant upside for anyone to have a view on the markets for a quarter or two. Q) Are there any sectors or themes you are overweight or underweight in currently, and why? A) We are sector/ theme agnostic. We look for fundamentally strong businesses that have a long runway for earnings growth and promoters that have excellent execution capabilities. We like to own owner-operated businesses with strong brand names and high ROCE's. Most of the businesses we own are completely debt-free and have had a strong earnings momentum.
Economic Times
17-05-2025
- Business
- Economic Times
ETMarkets PMS Talk: April's 9.9% spike - Nikhil Johri on what drove Trivantage Capital's outperformance
Trivantage Capital's portfolio showed impressive gains. Nikhil Johri credits the returns to policy and sectoral factors. RBI's accommodative stance and stable asset quality helped. The fund focuses on governance and due diligence. It targets opportunities in asset management and affordable housing. Johri sees a rebound in small and mid-cap financials. He believes India's financial sector offers long-term value. Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Q) Thanks for taking the time out. With a 9.9% monthly return in April 2025, what were the key contributors to the recent performance spike? Q) Your portfolio has outperformed the benchmark over 2 years but slightly lags since inception. What market conditions do you believe will help narrow or reverse this gap? Tired of too many ads? Remove Ads Q) What inspired the creation of a pure-play financial services portfolio focused exclusively on small and mid-cap companies? Q) How do you ensure that governance and management quality remain high across the small and mid-cap financial names in your portfolio? Q) With nearly equal allocation to small (48%) and mid-cap (48%) financials, what is the rationale behind this balanced mix? Q) How do you identify winners across diverse sub sectors like home finance, asset management, small finance banks, and insurance within financial services? Q) Given the evolving regulatory and interest rate landscape, what are the biggest risks and opportunities you foresee in the financial sector? Q) What is your take on the markets amid rising trade war and rising geopolitical tensions between India & Pakistan? Q) Which sectors are you currently overweight and underweight in? In April 2025, Trivantage Capital 's pure-play small and mid-cap financial services portfolio delivered an impressive 9.9% monthly return, significantly outperforming its sparked this sharp surge? In this edition of ETMarkets PMS Talk , we sit down with Nikhil Johri , Founder & Chief Investment Officer at Trivantage Capital, to unpack the drivers behind the portfolio's stellar performance, the strategic rationale for staying focused on SMID financials, and why he believes this rebound is just getting started. Johri attributes the outperformance to a combination of supportive macro tailwinds, including the RBI's shift to an accommodative monetary stance and resilient asset quality in the secured lending beyond the headlines, his investment philosophy is deeply rooted in rigorous due diligence, governance-driven stock selection, and sub-sector specialization across areas like asset management, affordable housing, and small finance this candid conversation, Johri explains how his team navigates the evolving market landscape, the rationale behind the nearly equal allocation to small and midcaps, and why smart investors shouldn't ignore the compelling opportunities unfolding within India's underpenetrated financial services sector. Edited Excerpts –A) The strong performance was driven by a supportive policy environment and sectoral resilience. RBI's shift to an accommodative monetary policy stance in April, along with abundant system liquidity, kept funding costs low—particularly benefiting small and midcap banks and asset quality among small lenders in the secured lending segment remained remarkably resilient, allowing them to stay insulated from the travails of the microfinance combination of favourable funding environment and stable credit quality was central to the portfolio's strong performance. Overall, the portfolio was well-positioned to capture these tailwinds as they primary reason for this performance gap has been the sharp underperformance of small and midcap stocks relative to large caps in the current calendar of April 30, 2025, the BSE 400 MidSmallCap Index was down 8.9% and the BSE 250 SmallCap index had declined 13.0%, while the Nifty 50 TRI was up 3.2%.This correction was driven by a combination of external shocks—primarily the imposition of tariffs and geopolitical tensions in the region. However, with both these concerns now abating, we are already seeing a sharp rebound in the SMID (Small and Midcap) believe this recovery is still in its early stages and will gather further strength as macro stability returns and domestic demand remains portfolio is well-positioned to benefit from this mean reversion, and we remain confident that this will help bridge—and potentially reverse—the performance gap over the coming the same time, this presents a compelling opportunity for smart investors to selectively participate in the resurgence of quality small and midcap names within the financial sector, where earnings visibility and balance sheet strength continue to stand creation of a pure-play financial services portfolio focused on small and mid-cap companies was driven by a combination of attractive valuations and structural opportunities that emerged post the of December 31, 2022, financial services indices had notably underperformed the broader markets over a three-year period—while the Nifty 500 TRI delivered 61.7% returns and the Nifty 50 TRI 54.2%, the Nifty Bank TRI and Nifty Financial Services TRI lagged significantly at 35.2% and 32.5%, divergence highlighted a compelling value opportunity, particularly within the small and mid-cap financial space, where many businesses were undervalued despite strong there was a significant influx of global private equity capital into SMID financial services companies, leading to improved management quality and governance frameworks through professionalized leadership and revamped is also important to note that several high-potential sub-sectors within financial services—such as Asset & Wealth Management , Brokerages, Rating Agencies, Stock & Commodity Exchanges, and Affordable Housing—are predominantly represented only in the small and mid-cap made a focused investment approach not just timely but necessary to fully capture the breadth of these these factors, we launched this dedicated investment approach on March 1, 2023, with the conviction that this segment offers meaningful long-term value creation potential for discerning the financial metrics and business fundamentals, we place significant emphasis on governance standards and management quality when evaluating investments in the small and mid-cap financial due diligence process is rigorous and multi-layered. We carefully assess the composition of the Board of Directors and the credibility of the auditors, review the management's track record, analyse credit ratings, and consider the presence of reputed private equity investors, which often serves as a strong external addition, we actively engage with the broader ecosystem—including industry peers, market participants, and occasionally even competitors—to gather independent views on the management's integrity and execution holistic approach ensures we remain aligned with high governance standards and back businesses with sustainable leadership portfolio construction process plays a critical role in delivering strong, risk-adjusted performance. As part of this process, we consciously ensure diversification across various subsectors within the financial services space to mitigate concentration investment framework also factors in specific risks associated with small and mid-cap names—such as illiquidity, higher volatility, and sub-optimal scale of these dynamics, portfolio construction becomes an ongoing act of optimization rather than strict adherence to any pre-defined do not set out to deliberately maintain an equal weight between small and mid-caps; instead, allocations generally range between 40% and 60% each, depending on prevailing market conditions and our current balanced mix reflects where we see the best risk-reward opportunities at this stage of the market potential winners across the diverse sub-sectors of financial services requires deep domain expertise and a highly customized evaluation sub-sector—be it home finance, asset management, small finance banks, or insurance—operates with distinct business models, regulatory environments, and growth investment process is designed to recognize and account for these nuances. We apply a rigorous analytical approach that assigns appropriate weightages to key operating metrics specific to each sub-sector—whether it's AUM growth and fee income for asset managers, underwriting quality and claims ratios for insurers, or NIMs and asset quality for disciplined, metric-driven evaluation ensures we consistently identify businesses with sustainable competitive advantages, prudent risk management, and strong governance—hallmarks of long-term value creators across the financial services financial sector's evolving regulatory and interest rate landscape presents both challenges and opportunities. While it is a highly regulated space—which, in our view, offers significant comfort to minority investors by ensuring better governance and systemic stability—it can also create periodic include liquidity and interest rate risks, regulatory pricing caps leading to margin pressures that businesses must carefully said, the opportunity set for small and mid-sized financial services companies in India remains exceptionally factors like low financial penetration, a growing middle class, and robust consumer demand create a fertile environment for well-managed SMID businesses to thrive despite cyclical challenges. For investors with a disciplined, long-term approach, this represents a compelling growth geopolitical tensions and trade-related uncertainties do create short-term volatility, we believe markets are increasingly resilient to such external fact, as things stand today, the macro headwinds have meaningfully eased, triggering a sharp rebound in global focus remains firmly on bottom-up stock selection, particularly in domestic economy-facing businesses that are well-positioned to benefit from India's long-term structural growth of external noise, we see strong and sustained opportunities for value creation in this space for years to financial services sector offers a well-diversified investment universe, and our portfolio reflects this breadth through a balanced exposure across several high-conviction the top sub-sectors in the portfolio comprise Wealth Management, Asset Management, Affordable Housing, Stock and Commodity Exchanges and other Capital Market segments offer a compelling combination of strong growth visibility, structural under-penetration, and attractive profitability active portfolio management ensures that we stay aligned with emerging opportunities while prudently managing risk.: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
