| ANNUALIZED SINCE INCEPTION | QUARTERLY | YTD |
|---|---|---|
| - | - | - |
Saurabh Khandelwal maintains focus on high-quality compounding businesses amid global geopolitical shifts and market volatility. The manager sees India as one of few large economies with strong real growth potential, projecting 6-7% real GDP growth and 10% nominal growth over the next 12 months. However, equity valuations remain stretched with the Buffett Indicator above 130%, particularly in small and mid-caps. The portfolio has shifted toward larger companies offering better value, with 10% cash and plans to deploy 5% next quarter. Key risks include persistently higher interest rates due to deglobalization, currency volatility from reserve diversification, and potential private equity underperformance. The manager exited Raymond Lifestyle at a loss, reinforcing commitment to strict governance standards. Specific opportunities exist in undervalued financials and consumer discretionary sectors. While short-term returns may be modest, the 5-10 year outlook remains promising driven by demographics, consumption, and institutional strength. The approach prioritizes intrinsic value over market sentiment with patience and discipline.
Focus on high-quality businesses with strong balance sheets, durable competitive advantages, and competent management teams that can compound value over time, particularly in India's structurally growing economy while maintaining global diversification amid geopolitical shifts.
The manager maintains a cautiously optimistic long-term outlook for India despite near-term headwinds. While expecting modest returns in the short term due to high valuations, the 5-10 year outlook is promising driven by demographics, consumption, and institutional strength. The tone reflects patience and discipline, emphasizing fundamentals over market sentiment.
| Date | Letter | Tickers | Keywords | Pitches | Quick Takes |
|---|---|---|---|---|---|
| Oct 28 2025 | 2025 Q3 | RAYMOND.NS | AI, geopolitics, India, long-term, Quality, value | - | Khandelwal focuses on quality compounding businesses in India's structurally growing economy while navigating global geopolitical shifts. Portfolio shifted to larger caps with better value, maintaining 10% cash. Near-term returns constrained by high valuations but 5-10 year outlook promising. Opportunities in undervalued financials and consumer discretionary. Emphasizes patience, discipline, and fundamentals over market sentiment. |
| Jul 15 2025 | 2025 Q2 | - | Cash, Geopolitical, India, infrastructure, large cap, Trade Policy, valuation | - | Indian fund manager maintains cautious stance with 25% cash amid geopolitical volatility and market overvaluation concerns. Shifting toward large caps after governance-related loss. Expects US-India trade deal to drive near-term performance while government infrastructure spending supports growth. Long-term bullish on India's demographic advantages despite consumer spending slowdown and manufacturing challenges from Chinese regulatory barriers. |
| Apr 1 2025 | 2025 Q1 | - | China, geopolitics, India, Manufacturing, Onshoring, tariffs, Trade Policy, Trump | - | Trump's tariff tsunami creates a manufacturing renaissance opportunity for India as global supply chains shift away from China. With 45% cash reserves, the fund expects excellent deployment opportunities over 6-12 months despite current elevated valuations. India's geopolitical neutrality, digital infrastructure, and policy support position it to potentially outperform markets and emerge as the next superpower. |
| Jan 1 2025 | 2024 Q4 | - | deployment, Gdp, Geopolitical, India, Trade Policy, Valuations | - | Indian equity fund deploys 40% of capital in Q4 while maintaining high cash due to stretched valuations. Manager expects cyclical GDP recovery and return to fundamentals-driven investing in 2025. Bullish on India's long-term resilience despite current overvaluation concerns, particularly in small-caps. Favors undervalued FMCG and private banks over expensive electronics and hotels. |
| Dec 31 2024 | 2024 Q4 | - | deployment, Gdp, Geopolitical, India, Trade Policy, Valuations | - | Indian equity fund deploys 40% of capital in Q4 while maintaining high cash due to stretched valuations. Manager expects cyclical GDP recovery and return to fundamentals-driven investing in 2025. Bullish on India's long-term resilience despite current overvaluation concerns, particularly in small-caps. Favors undervalued FMCG and private banks over expensive electronics and hotels. |
| Sep 30 2024 | 2024 Q3 | RESOURCEFUL.NS | fundamentals, growth, India, small caps, Valuations, value | - | Indian fund manager launches with value-focused approach targeting quality companies below 30x P/E. Concerned about small-cap euphoria with 50-70x multiples resembling bubble conditions. Maintains high cash levels, deploys gradually. India GDP growth 6-6.5% supports long-term thesis but current valuations suggest caution. Focus on fundamentals, competitive advantages, and sectoral diversification while waiting for better entry points. |
| QUARTER | THEMES | TAGS |
|---|---|---|
| 2025 Q3 |
IndiaIndia is positioned as one of the few large economies with strong real growth potential, though structural constraints limit full global value chain engagement. The manager sees specific opportunities in undervalued financials and consumer discretionary sectors that have lagged recent market trends. |
GDP Growth Consumption Demographics Valuations Emerging Markets |
AIIndia's IT services sector has largely missed latest technological advancements with limited investment in emerging technologies. The start-up ecosystem needs to focus on developing AI products rather than just infrastructure, drawing parallels to the internet boom where product innovators ultimately captured lasting value. |
Technology Innovation Products Infrastructure Startups | |
Trade PolicyThe post-WWII US-led global financial system is undergoing significant structural transition with trade wars, rising protectionism, and geopolitical conflicts accelerating the shift toward regional economic blocs and multipolar equilibrium over the next two decades. |
Geopolitics Protectionism Regional Blocs Multipolar Sanctions | |
GoldGold and silver are likely to serve as effective stores of value amid monetary instability as countries diversify reserves and trade settlements, with continued volatility expected in currency and commodity markets. |
Store of Value Monetary Instability Currency Reserves Commodities | |
| 2025 Q2 |
GeopoliticalMultiple conflicts affected markets including India-Pakistan tensions following terrorist attacks in Kashmir, and Iran-Israel war. Despite initial volatility, markets showed resilience and recovered quickly after ceasefires. |
Conflict Kashmir Resilience Recovery Volatility |
Trade PolicyUS-India trade deal expected mid-July with market optimism for favorable outcome. Trump tariff policies created initial volatility but subsequent negotiations led to recovery across asset classes. |
Tariffs Negotiations China Manufacturing Deal | |
Infrastructure SpendingGovernment-led investments in defense and infrastructure, along with effective infrastructure monetization, are expected to be primary growth drivers for the remainder of the year. |
Defense Government Investment Growth Monetization | |
| 2025 Q1 |
Trade PolicyTrump's announcement of broad reciprocal tariffs ranging from 10% baseline to 27% on India and 34% on China represents a radical attempt to rebalance trade and reshape global supply chains. This tariff tsunami is driven by decades of U.S. economic strain from globalization, manufacturing job losses, and unsustainable current account deficits. |
Tariffs Trade War Protectionism Supply Chain Globalization |
OnshoringAs the world shifts away from reliance on China due to tariff-induced isolation, India has a unique opportunity to capture a larger share of global manufacturing. This transition is already happening across electronics, electric vehicles, active pharmaceutical ingredients, and textiles sectors. |
Manufacturing Supply Chain Reshoring Production China Alternative | |
IndiaIndia is strategically positioned to emerge as the next superpower by mid-century with geopolitical neutrality, manufacturing renaissance opportunities, advanced digital infrastructure, and supportive policy momentum including PLI schemes and infrastructure investment. The country could outperform US and other emerging markets. |
Superpower Demographics Digital Infrastructure PLI Neutrality | |
| 2024 Q4 |
IndiaIndia should continue to display macroeconomic resilience with key indicators such as current account deficit, fiscal deficit, and inflation staying under control, positioning the economy for sustainable growth. GDP growth has recently slowed due to decreased government and consumer spending, but this trend is viewed as cyclical and expected to improve in coming quarters. |
GDP Resilience Growth Macroeconomic Deficit |
Trade PolicyChange in US leadership under President-elect Trump following a US-first policy is likely to ease geopolitical tensions in Ukraine-Russia and Middle East short term. However, the likelihood of trade wars and currency volatility, especially for developing economies, will increase significantly. |
Trade Wars Currency Volatility Geopolitical Policy | |
| 2024 Q4 |
IndiaIndia should continue to display macroeconomic resilience with key indicators such as current account deficit, fiscal deficit, and inflation staying under control, positioning the economy for sustainable growth. GDP growth has recently slowed due to decreased government and consumer spending, but this trend is viewed as cyclical and expected to improve in coming quarters. |
GDP Resilience Growth Macroeconomic Deficit |
Trade PolicyChange in US leadership under President-elect Trump following a US-first policy is likely to ease geopolitical tensions in Ukraine-Russia and Middle East short term. However, the likelihood of trade wars and currency volatility, especially for developing economies, will increase significantly. |
Trade Wars Currency Volatility Geopolitical Policy | |
| 2024 Q3 |
IndiaIndia's dynamic growth story continues with GDP expected to grow 6-6.5% in FY2024, supported by government infrastructure projects, strong services sector, and consumption demand. The market shows resilience despite global uncertainties, with domestic demand and structural reforms driving growth potential. |
GDP Growth Infrastructure Domestic Demand Services Consumption |
Small CapsSmall and mid-cap companies in India have reached extreme valuations with P/E ratios of 50-70x or higher, showing euphoria reminiscent of previous bubble cycles. The manager is finding value but being more selective, using strategies like spreading acquisitions over time and focusing on fundamentals to navigate this environment. |
Valuations P/E Ratios Euphoria Selectivity Fundamentals | |
ValueThe fund focuses on companies with P/E ratios lower than 30x on trailing basis, strong management, competitive advantages, and 15-20% anticipated growth rates. Portfolio selection combines quantitative analysis of financial ratios with qualitative assessment of leadership quality and market positioning. |
P/E Ratios Management Quality Competitive Advantage Growth Rates Financial Analysis |
| Date | Pitch Type | Author | Ticker | Company | Industry | Sub Industry | Bull / Bear | Exchange | Keywords | Action |
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| TICKER | COMMENTARY |
|---|---|
| RAYMOND.NS | Although we decided to exit our initial investment in Raymond Lifestyle Limited at a loss—an experience we now refer to as our 'first scar'—it has only strengthened our unwavering commitment to upholding strict standards for corporate governance and management quality. |
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