In an interview with ETMarkets, Agrawal mentioned: “We’re believers in potential money movement technology within the enterprise somewhat than Profitability within the Revenue/Loss assertion. We use a GARP (Progress at a Cheap Value) Fashion to determine and spend money on our portfolio corporations,” Edited excerpts:
Thanks for taking the trip. The month of January 2025 wasn’t that good for the Electrum Laureate Portfolio, however the fund has given spectacular returns within the final 1 yr beating benchmark with a large margin. Please take us by way of the numbers.
Our TWRR returns since inception (23/11/2020) for the Laureate Funding Method is 38% CAGR. Our 1-year return is 23.3% vs 9.7% for the BSE 500 TRI our benchmark.The outperformance to the benchmark is eighteen.2% and 13.6% respectively. On danger adjusted ratios, our Data Ratio and Sharpe Ratio on combination portfolio is 1.91 and a pair of.17 respectively since inception.Please take us by way of funding philosophy.
The core of our Philosophy lies in investing in corporations with long run scalable and sustainable development, companies with robust moats, good company governance, robust execution and monetary self-discipline.These corporations ought to have services or products which might make them one of many leaders of their respective sectors. We concentrate on Bottoms up analysis and are sector and benchmark agnostic.We concentrate on corporations which have potential to generate working money flows (Small Cap) and free Money Flows (Mid and Small Caps).
We’re believers in potential money movement technology in enterprise somewhat than Profitability within the Revenue/Loss assertion. We use a GARP (Progress at a Cheap Value) Fashion to determine and spend money on our portfolio corporations
How do you decide shares for the fund?
We at Electrum comply with our proprietary funding Framework ELECT
• Wonderful Administration Pedigree
• Longevity and Sustainability of Enterprise
• Earnings Progress
• Capital Effectivity
• Turnaround/ Worth Mispricing/Contra Alternatives
There may be a number of chatter round small & midcaps and yours is a small & midcap focussed fund. What are your views?
We consider that if we are able to decide 20-25 nice enterprise fashions that are leaders of their particular merchandise, providers or geographical market and are corporations that may scale their enterprise which aren’t very capital intensive and might generate money flows over a 3–5-year interval with growing scale these enterprise’ can generate robust fairness returns.
We’re agency believers {that a} RS 2000 cr to Rs 5000 cr firm over a time frame can grow to be multibaggers over a time frame. The necessity is to be affected person throughout this journey as markets are at all times unstable and non-linear.
We began off 2025 on a unstable notice and issues escalated amid commerce conflict woes, robust Greenback and valuations on the home entrance. What are your views?
Sure, 2025 has began with commerce wars and sure the markets have seen a deep correction, Fairness markets are unstable by nature and are non-linear, we consider that if one has an excellent portfolio of essentially robust corporations, one ought to use this volatility to extend one’s publicity.
Historical past at all times exhibits that when concern is at its highest returns give at all times been good for the markets sooner or later.
We consider that commerce tariffs are extra of a negotiating device and within the medium time period will damage the economies that import these items within the type of inflation. These are extra short-term in nature in our view.
Greenback commerce is at all times been there traditionally and we’ve got seen these cycles prior to now, the final one was on 2018. We aren’t to frightened about cyclical Rising Markets and Sturdy Greenback flows.
Ought to buyers be frightened about commerce wars? What does the historical past recommend?
We don’t consider that commerce wars will final for too lengthy, that is extra of a negotiating tactic for the USA. Long run larger tariffs will lead to larger inflation for the US, which is detrimental for the economic system.
Plenty of imports that occur within the US are due to labour prices arbitrage and can’t be produced domestically there on a sustainable foundation.
Market is down by over 10% from highs – what are the queries that you’re getting out of your shoppers?
The returns publish covid have been very robust within the fairness markets, within the current correction we’re asking our shoppers to deploy extra money, nevertheless, in a staggered method.
Is 2025 the time for long-term buyers to construct a robust portfolio that may generate wealth over a time frame?
Sure, we’re agency believers within the nice line Greed and Concern. Long run market information exhibits that when markets appropriate strongly, investments throughout that point give entry to buyers on the proper ranges and returns are typically good in the long run. We’ve seen publish Nice Monetary Disaster 2008, Put up Covid the returns had been excellent should you assemble a portfolio of excellent corporations.
Which sectors are more likely to hog the limelight in 2025?
We’re a benchmark and sector agnostic investor. Nevertheless, our bottoms up strategy exhibits that our concepts are within the water house, capital items, auto and auto ancillaries, and prescription drugs. We want to reiterate that we’re sector agnostic and sector allocations are a results of bottoms-up inventory selecting.
Which sectors buyers ought to buyers guide income or pare weightage?
As we’ve got said we don’t take sector views. We’re sector agnostic buyers.
(Disclaimer: Suggestions, strategies, views, and opinions given by consultants are their very own. These don’t signify the views of the Financial Instances)
