About

About Prashant Dubey

Prashant Dubey is a SEBI Registered individual Investment Adviser. He is an engineering graduate with Post Graduate Diploma in Finance. He has more than 3 decades of professional experience in the Energy industry around the world. He started his investing journey in 2006 and practices long term value investing. 

Core Values

Core values are a set of essential guiding principles defining the culture of an organization and guide the behavior, decisions, and client relationships. These values facilitate clients to select the right advisor, while guides advisor to build trust, foster long-term relationships, manage risk effectively, and uphold the highest standards of professionalism and integrity in client relationship.

Fiduciary Duty The approach is to prioritize the legal and ethical interests of clients by providing advice aligned with their goals, risk tolerance, and financial situation, while ensuring that conflicts of interest are avoided	Transparency Transparency is a core principle that underpins our client relationships. This entails providing information about our investment philosophy, fees, and regular performance reports while adhering to regulatory requirements.
Client Focus At the heart of our approach is prioritizing the needs and goals of our clients, with the aim of building long-term relationships founded on trust, respect, and open communication	Objectivity Our advice is impartial and free from personal biases or external pressures. We conduct comprehensive research and analysis, considering all relevant factors when making investment decisions

Investment Philosophy

Our philosophy is centered on prioritizing investments in a portfolio of high-quality businesses having large opportunity sizes to achieve superior long-term earnings growth, led by competent and ethical management, available at fair valuations with a good margin of safety. Our strategy involves holding onto these investments for the long term, provided the company continues to demonstrate desired performance.

Opportunity Size: The magnitude of opportunity forms the bedrock for substantial wealth generation. Put plainly, it encompasses both the scale and longevity of a business's earnings growth. We pursue businesses with a large potential size and growth, i.e. size of customer base, high market demand, alignment with market trends, and clear competition landscape to achieve superior long-term earnings growth. 

Quality Management: Effective management is essential for ensuring the success, sustainability, and growth of a company. We focus on businesses run by capable and ethical management with a vested interest in the company, having superior capital allocation and execution track record, Minority shareholder friendly and able to sustain earnings growth without diluting capital.

Margin of Safety: Select businesses available below their intrinsic value, to earn above-average returns with lower risks. It acts as a cushion or buffer for investors, providing protection against potential losses due to unexpected events or declines in the market price or if investment thesis proven incorrect.

Long term focus: Our focus is on long-term holdings, prioritizing continuous monitoring of fundamental performance. We remain committed to holding investments as long as the companies continue to perform well, irrespective of short-term market fluctuations.

We actively seek opportunities to capitalize on significant stock price declines resulting from near-term business challenges or in undervalued companies operating in unpopular industries, maintaining our focus on the long-term intrinsic value of the business.

Investing Process

We employ a bottom-up approach, conducting thorough, stock-specific fundamental research when selecting companies for investment, with a view to hold for the long term.

Short listing / Initial screening

We meticulously shortlist companies for in-depth analysis utilizing proprietary screeners, corporate announcements, quarterly earnings reviews, promoter buying patterns, management changes, arbitrage opportunities, and industry/company news, among other factors.

Additionally, we consider companies experiencing temporary cyclical downturns in their business or those affected by market overreactions to negative events. Our focus remains steadfast on the long-term intrinsic value of the company.

Qualitative research analysis

We conduct qualitative research analysis on shortlisted stocks, utilizing publicly available information such as annual reports, credit rating reports, earnings presentations, earnings calls, industry/company news, and management interviews. Our focus is on the following areas:

• Growth drivers Product / service leadership, Market size & opportunity, Leadership, demand, Capacity expansion, Margin expansion, cost reduction, capturing market share, moat, etc.
• Management Efficient Capital Allocation record, good Track Record of achieving guidance, good corporate governance, No significant related party transactions, Minority shareholder friendly, High shareholding.
• Financial Superior or improving return ratios, Efficient use of capital, Healthy free cash flow generation, manageable debt
• Valuations Our investing approach adheres to the mantra of buying low and selling high, a principle that sounds simple but is challenging to execute. The valuation methods utilized can differ depending on the industry or specific company. We utilize methodologies such as Value in Growth, comparison of valuation metrics (P/E, EV/EBITDA, P/B, P/CF, market cap to sales, Replacement Cost, PEG) relative to historical averages, as well as against other players in the same segment and benchmark indices, margin profile, among other considerations.

 Portfolio construction

 Portfolio offered is standard for all clients:

• Midcap and Small cap companies
• Minimum 18 companies in portfolio
• Usual position size of 5%
• Industry concentration limit.
• 10% cash position during normal market conditions.

 Risk Management

No investment is entirely risk-free, as stocks, bonds, MF can lose value, if market conditions deteriorate. Even seemingly conservative and insured investments, such as bank FD and government bonds, carry inflation risk, as they may not generate sufficient returns over time to offset the rising cost of living.

• Diversification and industry / stock limit: According to historical data, maintaining a broad portfolio of stocks over a prolonged period substantially decreases the likelihood of losing your principal investment. We diversify the portfolio with a minimum of 18 companies and rebalance based on industry and stock concentration limits to further mitigate portfolio risk to an acceptable level. 
• Risk – reward assessment: We identify the potential risks associated with each company and assess the probability of their occurrence. If the assessed risk is deemed low in comparison to the potential reward, the company is considered for inclusion in the portfolio.
• Continuous Monitoring: Continuous monitoring of identified risks, along with any external factors that may impact company performance, is crucial for achieving superior returns. If any of the risks associated with a company materialize, we update our risk assessment and take appropriate action (such as exiting, trimming, or maintaining the position) to minimize the impact. Similarly, we promptly rectify any mistakes if our investment thesis proves inaccurate.

 Selling Criteria

Selling a stock can be more challenging than buying one due to emotional factors. Selling may involve accepting a loss or potentially missing out on gains, which can be psychologically difficult as humans tend to dislike losing money. The following set of rules helps make selling decisions without emotions:

• If Initial investment thesis turns out to be inaccurate.
• If the stock price increases on account of euphoric environment not backed by fundamentals or price exceeds the fair value
• If the weight of individual stocks or sector within the portfolio goes above limits and Portfolio Re-balancing is required
• If company’s business fundamentals are deteriorating.
• If any slippage in corporate governance.
• If a better opportunity is available, compared to portfolio company.