Investment thesis on Yasho Industries

The coming decade will see many great companies emerge out of India in Manufacturing.  This will not be because of cost arbitrage alone, but from genuine capabilities companies have developed which will be of relevance to global buyers seeking credible “win-win” partnerships. 

Good companies will use the cash flow to re-invest and create virtuous cycles where they could grow profits at 20-25% for a decade. 

If we can identify a bunch of cos that can do this, even if one assumes some errors, we will get a very good result.  However, one must be willing to stretch time.  With small companies, results are seldom linear. 

Enclosed is a brief note to explain our thought process underlying this investment

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Investment thesis on IndiaMART InterMESH

A key attribute of our firm’s culture is the focus on writing a detailed investment thesis on every position of interest.  Writing clears the cobwebs in our minds and allows us to get more specific feedback from peers we respect.  It also reduces the chances of errors. 


IndiaMART is a company we have owned since 2020.  We enclose a more detailed thesis that explains why we believe this company can provide Asymmetric outcomes this decade and why the trailing PE ratio, often used as a valuation proxy, provides an erroneous representation of IndiaMARTs true value. 

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Is it different this time?

Like most valuation-conscious investors at present, we too are grappling to deploy capital at acceptable valuations. In many new accounts opened since January 2023, we continue to hold 20%+ uninvested cash. While we are not accepting capital from new partners at present, if we did, we would be able to deploy only ~40% in Week 1, most of it in Large Caps.


Our uninvested cash prompted a partner to ask us recently whether we are missing “something”. Sentiment for India is very positive. There is a wall of FII money waiting to enter India. SIP flows continue to be strong. Hence can’t valuation multiples continue to climb higher? Is it different this time?
It is not different this time, just the behavioural cycle at play in Small caps and select sectors.

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Looking for Asymmetric outcomes

The enclosed blog discusses the power of Asymmetric outcomes, where to look for such returns, what it takes to achieve them, and how we think about what share of the portfolio we allocate to such ideas. 

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