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Quantum Advisors India
Building your India portfolio since 1990 on a foundation of ethics, integrity & disciplined investment research process.
Jun 15, 2021While India has none of the colossal problems of a highly leveraged consumer base, highly leveraged financial firms, or highly overpaid CEOs and executives, India has its share of excesses.
“Shake hands but count how many fingers you get back.”
1) At the risk of being outcasts, we had stayed away from investing in financials like ICICI Bank. Their rapid growth in the loan book and their relentless focus on market share at the possible cost of profitability was typical of businesses built for high octane GDP growth levels. In a harsher risk-return environment, growth for the sake of growth is no longer rewarded. On September 30, the Reserve Bank of India – the central bank - had to issue a statement confirming that ICICI Bank was healthy and that the RBI would be willing to give it funds to match any withdrawals. We have no such “insolvency” concerns on ICICI Bank. We only had an issue with likely profitability and the valuation. 2) Another “contrarian” call we made was on real estate. We stayed away from the hype surrounding the “land banks” that were being built. Lehman, Wachovia, and a host of international groups were happily shoveling money to Indian developers and acquiring properties with some pretty ambitious assumptions on selling prices. With mortgage rates headed northwards (from 7% to 13% over the past 2 years) we were not quite sure how people would be able to pay for the homes that are needed. XL sheets create monsters that even a Harry Potter would find a challenge to overcome.
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Quantum Advisors was founded by Ajit Dayal as India’s first institutional equity research house in January 1990.
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Quantum Advisors pioneered a quantitative as well as qualitative analytical approach to equity investing in India, providing for the first time, consistently applied valuation metrics to evaluate investment opportunities in India’s emerging stock markets. Over the years, Quantum Advisors has continued and enhanced its tradition of extensive financial analysis and value investing, as it has evolved into an investment advisor and asset manager.
Our investment philosophy and strategy involves the use of intensive qualitative and quantitative fundamental analysis. We build and monitor our clients’ portfolios actively while at the same time avoiding excessive trading, and control risk by endeavoring to keep our clients’ portfolio adequately diversified, both in terms of the sectors included in those portfolios, as well as with respect to the level of concentration in any specific security.
