We like:

High Growth Businesses

We look for businesses that gain market share which contributes significant portion of their earnings growth.

The business should have long-term growth potential of above 20% per year and it should not require too much additional dilution (other than for financial companies) of equity to achieve such growth.

Clean and Competent Management

The most important factor in India is to stay away from managements that are here to steal from investors; and believe us we know of many.

Here we maintain “zero” tolerance policy and we prefer letting go of a good opportunity even if we have some doubts about the management’s integrity.

Sustainable Competitive Advantage

We look for businesses with long-term competitive advantage validated by their market leadership, in attractive industries from the point of view of long term value creation.

Return on capital (ROCE) is a very good indicator of the quality of the management team and the competitive advantage of a business. Typically we look for sustainable ROCE and ROE of at least 20% that has been achieved without too much leverage (debt).

 
Our primary focus is on superior businesses and would not buy a weak business irrespective of its price.
It is our overriding belief that, especially in the opportunistic markets in which we work,
“if we avoid the losers, the winners will take care of themselves.”