Analyse India – The Weekend MBA

In this series, Bloomberg Quint’s Market Editor Niraj Shah interviews

India’s leading Fund Managers and Most Successful Investors.

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Samit Vartak

Mr. Samit Vartak is the Founding Partner and Chief Investment Officer of SageOne Investment
Managers LLP. Samit has been investing in the equities markets since 1999 and has experienced
and studied many bull and bear cycles over the last two decades.

• “If you find good earnings growth companies, even if you pay a little bit higher in terms of
valuation, the risk definitely reduces. I think earnings growth is the best defensive mechanism
in investments.”

• “In 2012-13, I picked Amara Raja batteries over Exide Industries, where Exide was a market leader
by a margin, but Amara Raja was snatching away market share from others because it had the
lowest cost structure in the industry and they were the most efficient. Hence, even if they were
Samit Vartak
selling at 15% discount to Exide, their margins, ROE, ROCE were much higher. Also, they Nov’17 : https://www.youtube.com/watch?v=lp0B3lLY-ro
focussed on the replacement market, where the margins were higher and that was an untapped
market, which is a very price sensitive market.” Sep’20 : https://www.youtube.com/watch?v=tJy1veLrzpg

• “If you look at just the cash flow from operations and compare it with the net profit which is
collected by the company and if that efficiency is at least 60-70%, that itself will save you from a
lot of fraudulent companies.”

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 Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Basant Maheshwari

Mr. Basant Maheshwari is a Commerce graduate from St Xavier's College Kolkata and
is also a Cost Accountant. As a full time equity investor, Basant brings with him 22
years of experience in stock market investing.

• “Sooner or later, economics like water, finds its own level. How long can you ask people
to be patriotic and not consume Chinese goods, whether it’s Indians or Americans or
Russians or Africans. We all live and die for money. It looks so capitalistic, it looks so
brutal for me to say this but at the end of the day, who would work 10 hours a day for
free.”

• “Concentration with low quality stocks is a perfect recipe for disaster. Concentration
with high quality stocks is going to create volatile returns. As long as you get home, you
don’t care about volatility too much.”

• “Earnings will support you, if you have a three-year view. If you have a three-month view, Basant Maheshwari
it’s to liquidity, if it’s a three-hour view, it’s on sentiments and emotions.”
Link : https://www.youtube.com/watch?v=EMHhmFZjqTo

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Vijay Kedia

Mr. Vijay Kedia is a well known investor, who is known for picking several
multibaggers. He has been involved in the markets since he was 19. He strictly adheres
to SMILE as a principle in investing; which translates into Small in size, Medium in
experience, Large in aspiration and Extra-large in market potential.

• “I am just looking for a share, which is not a crocodile in a pond. I always try to find
a company which is a fish in the ocean. For me, it is very important, that the
underlying opportunity in the sector where I am investing is huge.”

• “When a company has fallen down (due to a temporary period of struggle) a lot and
the business model hasn’t changed, this is when I have to wait. When I find that the
struggle is over, I try to get into the share. If your principle is that ROCE should be
good, ROE should be good, then in the struggling phase all those parameters are down
only right. All these indictors give you indication of the past, they don’t tell you
anything about the future.” Vijay Kedia
Link : https://www.youtube.com/watch?v=VcvpLw34GkA
• “Loss doesn’t disturb me. If there is a disturbance in the underlying story of the
stock, that disturbs me more, even if I am making money.”

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Hiren Ved

Mr. Hiren Ved is the Co-founder, Director, CEO and CIO at Alchemy Capital
Management. Hiren has deep knowledge across sectors and is known for his bottom
up research and stock picking skills. He has built a long-term track record of
generating significant alpha over the last 18+ years.

• “Markets keep changing character. For example, small-caps and mid-caps were very
cheap in second half of 2013. They were actually trading at a 7% discount to the Nifty. In
January (2019), they’re trading at a 22% premium. I mean, that’s a massive re-rating
that they had gone through. No matter how much you like them, everything is good at
a price and you have to look at the risk reward for an investor. It’s great to say that you
should be 5 or 10 years invested in companies, but in the interim, you have to manage
the volatility.” Hiren Ved
Link : https://www.youtube.com/watch?v=ProRvrnVkVY

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Porinju Veliyath

Mr. Porinju Veliyath started his career in Mumbai as a floor trader with Kotak
Securities in 1990. Later, he joined Parag Parikh Securities in 1994, where he
worked as research analyst and fund manager until 1999. In 2002, he founded
Equity Intelligence, a fund management firm.

• “We’re like a mega cap, when I look at the demographic of India. As a market
capitalization, we’re a small cap. Going down further, if you see the per capita income
of the Indian, it’s like a penny cap. It cannot sustain like this for a long time.”

• “The economy is really moving from black to white, from unorganised to

organised. Theoretically, everybody knows, but people are grossly underestimating
the significance of this, the impact of this, in the medium to long term, on corporate
Porinju Veliyath
earnings and economic growth.”
Link : https://www.youtube.com/watch?v=ZvtmEsurgyk

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Mohnish Pabrai

Mr. Mohnish Pabrai is an Indian-American businessman, investor, and philanthropist.

He has written a book on his investmadeing style: The Dhandho Investor: The Low - Risk
Value Method to High Returns. In June 2007 he headlines by bidding US$650,100 with
Guy Spier for a charity lunch with Warren Buffet.

• “Circle of competence is a very important concept. A person like Warren Buffet, would
consider 95% of the stocks outside his circle of competence. If Warren Buffet can’t figure
out 95% of the businesses, for the rest of us humans, we can’t figure out 99% of them.”

• “You’re definitely better off buying a growing company, then a cheap, no growth
company. If I buy an asset that is cheap, that has very limited growth, all I am going to do
Mohnish Pabrai
is cover the gap (between price and intrinsic value). Now, if I am buying a company, that
Link : https://www.youtube.com/watch?v=XBY6aLezago
has secular tailwinds, great management and long growth engines, as long as I am not
paying up too much, it’s the best place to be.”

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 Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Sumeet Nagar

Mr. Nagar is the founder of Malabar Investments LLC, and founder and Managing
Director of Malabar Investment Advisors Private Limited. Mr. Nagar has over a decade
of experience in portfolio management and investment analysis as well as tremendous
experience in operating roles.

• “What you would find over the every long term (upwards for 5 years/10 years), the
smaller companies would always end up outperforming the larger companies. The
reason is simple – smaller companies can grow faster.”

• “Globally, in any country or any region, you only find 2 or 3 players (in the luggage
industry). Therefore, even in India, three branded players control 90% of the branded
business. The reason is because luggage takes a lot of space. If you have five different
products, three different sizes, you have hard and soft luggage, suddenly you have 30 Sumeet Nagar
different luggage’s which you want to put somewhere. No shopkeeper is going to give
you that space, unless your product sells. That’s why the branded players have a deep Link : https://www.youtube.com/watch?v=K-gM-w3zs0k
entrenched advantage in this space.”

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Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Kenneth Andrade

Mr. Kenneth Andrade is currently the CIO of Old Bridge Capital Management, an
India-based registered PMS. Along with over 27 years of experience in Indian
Capital Markets, portfolio management and investment research he has a
formidable 15-year track record managing some of India's most successful equity
funds.

• “We look for business opportunities which exist on the ground with low-capacity
utilisation and an industry which is not really in the pink of its health. Businesses
which are growing slowly and consolidating. Hopefully, at that point in time,
valuations are in our favour. So those are the businesses we actually look out for.”

• “As an investor, we look over an investing cycle. We need to compound earnings Kenneth Andrade
and valuations have to also step up. So, you get higher earnings and higher valuations
Link : https://www.youtube.com/watch?v=AOnZtd_0sOE
and there is compounding of capital. It’s imperative for us to have both these things
in our favour.”

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 Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Prashant Khemka

Mr. Prashant Khemka is the founder of White Oak Capital Management. He is the
former CIO and lead portfolio manager of GS India Equity at Goldman Sachs Asset
Management during March 2007 to March 2017. He has 23 years of experience in the
markets.

• “The more macro you go (in terms of your investing philosophy), the more it (the
probability of success) becomes coin flip. The more micro you are, the more it
remains stock-picking.”

• “How we think about a great business is one that has these key attributes – 1) superior
returns on incremental capital, scalability and good management.” Prashant Khemka
Link : https://www.youtube.com/watch?v=fNDwVTmMII4
• “The markets always look beyond the horizon. They may be wrong very often, but
they’re always looking beyond horizon.”

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 Analyse India – The Weekend MBA – Alpha Moguls
Interview with Mr. Chanrandeep Singh and Varun Daga

Mr. Varun Daga is co-founder of Girik Capital and jointly leads the investment
decision making process. He has developed proprietary systems and screeners in order
to identify promising growing companies, well in advance of their big gains. He is a
self-taught investor.

Mr. Charandeep Singh jointly leads the investment decision making process at Girik
Capital. His experience includes more than 10 years of investing in India, prior to
which he was with Lehman Brothers as Director of investment banking division.

• “More than p/e ratio or valuation, what is more important is how the company’s growth can
accelerate in the future. When the growth comes, in hindsight it’ll look very cheap. Look at
D Mart or Bajaj Finance. Some of these companies were expensive always.”

Charandeep Singh and Varun Daga

• “It’s one of the greatest paradoxes in the market that what seems too high, usually goes
higher and what seems too low, usually goes lower. It took us many years to understand
that.” Link : https://www.youtube.com/watch?v=hgtpIi1PDzM

• “We believe, it’s very important, when you are managing public money, to be in the right
sector, where there is tailwind, where there is earnings growth and to stick to the leaders.”

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 Nooresh Merani

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