Akhand Bharat 🇮🇳

While in Tier-1 cities, you can find dozens of good schools. But once you move to Tier-3/4 towns or villages, you might find only a handful of genuinely good schools. Millions of families in India belong to the middle-class and below-middle-class segments. Some struggle to make ends meet every month, while others manage to move one step at a time, create opportunities and help their children succeed. The same applies to listed companies. We have thousands of them, but many will disappear or fail over the next 7–10 years. A handful, however, will go on to become much bigger businesses. What's the common characteristic here? Maybe God's divine blessings or a bit of luck. But, more often than not, it comes down to hard work, discipline and managing things better. One word that captures all these attributes is MANAGEMENT. The headmaster/headmistress and a handful of dedicated teachers would have made all the difference to those few good schools. Similarly, disciplined, hardworking and financially conscious parents would have made the difference to those families and their children's futures. We keep looking for good stock ideas. Perhaps we should change the starting point. Look for good management teams with ethics, hunger, aspiration and a willingness to work hard. These are the businesses that have the potential to create consistent wealth for shareholders. Laurus Labs, Sansera Engineering, Sona BLW, Innomet Advanced and OBSC Perfection are a few examples. Listen to their concalls, follow their media interactions and observe their behavior. Look for signs of inconsistency, lack of discipline, excessive storytelling or capital misallocation. Equally importantly, look for evidence that management walks the talk. When you don't find these red flags and continue to see evidence of execution, you know you have a business worth shortlisting. Once we shortlist a company, at what valuation to buy and at what valuation to sell is a personal choice, driven by conviction and data. But perhaps we should change the sequence. Start with management, hunger and aspiration. Don't start with valuations and PAT. Happy Diwali!