Investor interest in India has been rising steadily due to economic growth, strong stock market performance and a rapidly growing population. However, amid some discussions about the bubble in the Indian stock market, Pramod Gubbi, co-founder of Marcellus Investment Managers, revealed how he was gaming the market. The veteran investor said that he focuses on a “bottom-up” strategy, choosing companies with trustworthy, high-quality management teams that are good at doing business and allocating capital. “The management team understands technology developments and other issues better than anyone else.” factors affect their performance”. So our job is to assess whether the management team is eager enough to recognize the changes that are happening and adapt to them,” he told CNBC Pro last week. The BSE Sensex index, which represents the country’s 30 largest and most traded companies on the Bombay Stock Exchange as of September 9, has gained about 12.8% so far this year, while the benchmark Nifty 50 index has gained about 14.7%. By comparison, the U.S. tech-heavy Nasdaq is up about 13% since the start of the year, while the benchmark S&P 500 is up about 14%. Gubi said that before investing in stocks, he will also pay attention to the company’s mid- to long-term growth trajectory and its industry performance. “Basically, we like Indian companies that are well-run, well-governed and have good capital allocation across sectors,” he added. Femdom Dominance One subject that interests Guppy is how India’s growing number of working women spend their money. The investment manager said Tata Group-owned fashion accessories and jewelery Titan is one such beneficiary. Its brands include Tanishq, a jewelry brand known for its gold and diamond jewelry. Calling it a “national champion,” Guppy said the company is benefiting from a “wave of consolidation” in the industry as consumers seek established brands rather than the small mom-and-pop jewelers that have historically dominated the market. Tanishq’s “management saw the trend of working women wanting these elegant pieces and moving away from heavy jewelry. And they did a great job serving this niche,” the investor added. Guppy said Nestlé India – which has well-loved brands such as Maggi, Nestlé, KitKat and Lactogen (formula) – has also attracted Indian female consumers. He added that the company is a “market leader”, especially in milk and coffee powder, and has been attracting attention, especially among women who have the disposable income to buy its premium products. Guppy noted that Asian Paints also benefited from this theme. He said the paint maker is seeing strong demand for its recently launched interiors segment as working women and India’s rising middle class invest in homes. Other Indian companies Guppy likes include Divi’s Laboratories and HDFC Bank. Divi’s is one of the largest manufacturers of active pharmaceutical ingredients, with customers including global giants Novartis, GSK and Merck. Gubi explained that the company will benefit from the “China plus one” strategy as pharmaceutical companies increasingly source from India. This strategy allows companies to reduce their dependence on China by diversifying their supply chains and operations into other countries. As for HDFC Bank, Guppy said, “from a valuation perspective, it looks very attractive”. “We have a large position in this and see the potential for a turnaround given the underperformance of private sector banks over the past two months,” he added.
