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After a recent meeting in Mumbai with the top management of Mahindra & Mahindra (M&M), we came back with a clear message

50x P/E! 70x P/E! 100x P/E! Valuations that were outrageous just a few years ago are commonly bandied about by most of the investment community these days.

Land, Labour, Capital and Entrepreneurship. These are the well-known “Factors of Production” as defined by classical economists. The Entrepreneur (or Company) is the one that combines these factors to earn a profit.

We often hear this comment from prospective clients who are considering an investment in the FSSA Indian Subcontinent strategy, but are not yet convinced that a dedicated allocation would indeed be worth it. Call us biased, but we have been arguing in favour of a standalone investment in India for many years.

We have just returned from India — the first investment research trip in India for our entire team in over two years. It was a liberating break from constantly hearing “You’re on mute!” on video calls...

Corporate India’s resilience has been severely tested over the past decade. Since 2010, there has been a long, drawn-out downturn, caused by a series of corruption and scams, a banking and financial crisis, and now a devastating health pandemic.

As disposable incomes have grown, we find that Indian consumers are now moving up the ladder to buy more premium products, or buying discretionary products they could not previously afford.

From our discussions with companies in the FSSA Indian Subcontinent equity strategy, it is clear that they are well-positioned to deal with the impact of the second wave of the virus on their businesses.

That would perhaps be an accurate description of what drove some of my portfolio decisions as a young fund manager, roughly 15 years ago during the global financial crisis (GFC) meltdown.

In our team, mistakes are teachable moments to be shared and learnt from. Thankfully, for us and our clients, in our history of investing in India we have managed to avoid the big ones.

FSSA India webcast focus on the India Subcontinent Markets and Asia Pacific equities

Last year, we wrote about the bubble we were witnessing in the initial public offerings (IPOs) in India. Now, we see a different type of bubble forming – in these cases, the business is often a proven one, with a strong track record and high return profiles.

Performance over the 10-year period since July 2012 has been satisfactory, despite the challenges faced during the pandemic period.

Learn more about investing in Indian equities with FSSAIM today. Our India investment fund strategies aim to achieve sustainable, long term growth.

Fund Manager Q&A

FSSA Investment Managers has been investing in Asia and global emerging markets for three decades.