Girik PMS

PMS Background

Girik Capital was founded in 2009 by Charandeep Singh (an ex-investment banker at Lehman Brothers in New York). Charandeep returned to India to form Girik Capital, following the collapse of Lehman Brothers post the sub-prime Crisis. Established AMC with a strong track-record Girik is niche PMS provider that has a strong 10-year track record

PMS Investment Philosophy

Girik Capital aims to find emerging structural opportunities at early stages, focusing on companies with a large market opportunity, scalable business models, market leadership, strong governance, capable management and a consistent track record.

Screening of Stock selection 

• Industry Strength: Industry strength when compared to other industries; 50% of a stock performance tied to the industry group; shortlist leading stocks in leading industries. 
• Relative Price Strength: Look for leading price performers; 52 week and lifetime highs; winners show price strength early in a bull cycle. 
• Earnings Acceleration: Having a stable historical earnings; Accelerating current annual and quarterly earnings; Immense future earnings growth potential   

These strengths are contributed by searching for leader by looking at Product/service leadership, businesses having the ability to scale, having a management track record, allocating capital efficiently & delivering superior return ratios, having a governance standards & alignment of interest,

Fundamental Research and Checklist 

• Business Model: Product/Service leadership; Market Size & opportunity; Management efficiency-superior execution & delivery 
• Financial Metrics: Superior return ratios; Efficient use of capital; Healthy free cash flow generation; Funding of growth ideally through internal accruals; low to no debt
• Governance: No significant related party transactions; Minority shareholder friendly (E.g. Dividends, Buybacks); Alignment of interest- management compensation & ESOP's; Ideally no large promoter pledges and sales in the past; Professionally managed- genuine board of directors, reputed auditors

Valuation

• Value in Growth: Expensive in the short run but cheap in the long run; Accelerating earnings growth combined with leadership ensures premium multiple justification
• Margin of Safety: Assessment of longevity of growth and leadership; Estimate downside risk of going wrong due to overestimating growth
• Traditional Valuation Metrics: Reliance on traditional valuation metrics can be deceiving; Trading Multiples (P/CF, P/E, EV/EBITDA) relative to historical averages- significant premium required serious justification; "low P/E" Investing can be a value trap

Risk Management: 

• Portfolio Review: Weekly fundamental stock reviews; Ensure balance in portfolios based on industry& stock concentration, market cap weights, and liquidity; Check for technical/distribution patterns
• Eliminating Losers: Identify and eliminate investment mistakes actively; Monitor for any sectorial and stock weakness; No averaging down on a loss making position 
• Taking Profits: Riding winners until see earnings growth deceleration; Selling in euphoric tops; Red flags-crowded trades, consensus bets, excessive media coverage, over-guidance from management

Suitable For Investor's seeking concentrated mult-cap stock exposures.