INVESTMENT THESIS ON NEOGEN CHEMICALS

Neogen is the only company which we continue to purchase even at valuations > 50x TTM PE.
We make exceptions only when a company is at a very early stage of the growth cycle, where there are visible opportunities/triggers for high growth longevity, and we are investing in top decile promoters.

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

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Performance measurement – the difference between TWRR and XIRR

Performance reporting in the PMS industry had no standardized reporting till SEBI mandated managers to only report TWRR.  (Time Weighted Rate of Return).

TWRR measures skill of a fund manager – TWRR does not care about quantum of money invested, only the return earned over the time period money was invested.  It is calculated by multiplying returns over each time period money is invested and dividing it by the total time period. Alternatively, one can calculate this by assuming units are being issued at prevailing prices and calculating how the NAV of each units has evolved (MF method).

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INVESTMENT THESIS ON STAR HEALTH LIFE INSURANCE

Star Health is a Health Insurance company primarily focused on the retail segment. This is a business we would like to own for long periods of time.
With its leadership of a large and growing market that provides the opportunity to grow PAT at ~18-20%+ for next decade, 16-18% Accounting ROE and higher Cash ROE, Star Health is a very attractive business to own at current prices from a 5–10-year perspective.

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

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