360 ONE Phoenix PMS Portfolio: Turnaround Investing Strategy & Business Cycle Framework
360 ONE Phoenix PMS Portfolio
360 ONE Phoenix Portfolio focuses on identifying businesses experiencing temporary disruptions or cyclical slowdowns with the potential for long-term recovery and value creation.
The investment strategy aims to invest in businesses with:
- quality management
- strong historical performance
- long-term growth potential
- improving fundamentals
The portfolio follows a turnaround investing approach focused on businesses capable of mean reversion and long-term recovery.
Executive Summary
Businesses often witness temporary declines in:
- profitability
- growth
- operational performance
These disruptions may arise due to:
- suboptimal capital allocation
- policy and regulatory changes
- behavioral shifts
- weak economic activity
Such periods may create investment opportunities in businesses with:
- established operating history
- strong management quality
- recovery potential
- improving financial fundamentals
The strategy intends to identify businesses capable of:
- reviving growth
- improving profitability
- creating long-term shareholder value
Business Cycles Explained
Investing in Businesses with Recovery Potential
Businesses may experience disruptions due to multiple internal and external factors.
Companies often respond through:
- strategic changes
- operational restructuring
- financial restructuring
- organizational transformation
The strategy seeks to identify businesses taking corrective actions to revive growth and improve fundamentals.
Turnaround Cycle – Stages
Understanding the Turnaround Process
The turnaround cycle generally consists of three stages.
Investment opportunities may arise when:
- the turnaround event is about to occur
- the turnaround event has occurred
- business visibility improves post turnaround
Improvement in business fundamentals may lead to:
- value unlocking
- market re-rating
- sustained long-term compounding
Turnaround Cycle – Factors for Turnaround
Internal & External Triggers
Turnaround cycles may begin due to:
- internal business changes
- management decisions
- sector shifts
- policy changes
- macroeconomic developments
Turnaround Cycle – Improving Financials
Revival of Business Fundamentals
Successful turnaround events may result in:
- revenue improvement
- profitability expansion
- operational recovery
- stronger business fundamentals
360 ONE Phoenix Portfolio – Stock Selection Criteria
The investment framework focuses on identifying businesses with recovery potential and improving fundamentals.
Selection Parameters
- Upgrade in quadrant (SCDV)
- Lower profitability versus historical trends
- Proven track record and capital efficiency (ROE > 15%)
- Trading below historical valuations
- Changes in management or ownership
- Strong governance and forensic checks
- Stocks where significant price correction has occurred
Case Study – SRF Ltd. (1/2)
SRF Ltd. is a manufacturer of industrial and specialty chemical intermediates.
Event Period: 2010–2012
What Went Wrong?
SRF’s largest division at the time was Technical Textiles, which faced structurally declining fundamentals.
The packaging films business was cyclical in nature and historical return ratios remained relatively low due to capital allocation toward these businesses.
Catalyst
The company entered the specialty chemicals segment and deployed cash flows generated from carbon credit sales into fluoro-specialty chemicals.
This enabled:
- revenue expansion
- profitability improvement
- business transformation
Case Study – SRF Ltd. (2/2)
SRF Ltd. Stock Price Movement
Case Study – IPCA Ltd. (1/2)
IPCA Ltd. is a pharmaceutical company involved in manufacturing APIs and formulations.
What Went Wrong?
In July 2014, the Ratlam API plant received observations from the USFDA related to data integrity concerns.
This later converted into an import alert in March 2015.
As a result:
- US formulation exports stopped
- API exports were impacted
- revenue and margins declined significantly
Trigger Event
The company shifted focus toward:
- India business opportunities
- ex-US markets
- operating leverage improvements
Case Study – IPCA Ltd. (2/2)
Relation Between Time, Volatility And Returns
Current Valuations
Portfolio Snapshot
Portfolio Quants
Top Ten Holdings
Performance
Investment Team & Fund Management
Public Equity Team Structure
Building a Collaborative Investment Team
The public equity team combines expertise across:
- portfolio management
- sector research
- ESG analysis
- quantitative investing
Anup Maheshwari – Co-founder & CIO
- 28 years of investment experience
- MBA graduate
- Joined 360 ONE Asset Management Limited in August 2018
- Previously associated with DSP Investment Managers Private Limited
- Former CIO – Equities at DSP BlackRock
- Former CIO at HSBC Asset Management
- Previously associated with Chescor
- Alumnus of IIM Lucknow
Fund Managers
Mehul Jani
- 19 years of experience
- Covers Financials & Consumer Staples
- MSc, CFA
Mayur Patel
- 18 years of experience
- Covers Oil & Gas and Industrials
- CA, CFA
Nishant Vass
- 14 years of experience
- Covers Automobiles, Telecom and Internet sectors
- MBA
Parijat Garg
- 16 years of experience
- Covers Quantitative Research & ESG
- M.Tech, CFA
Key Terms
Portfolio Manager
360 ONE Asset Management Ltd. (360 ONE AMC)
Investment Strategy
The investment strategy aims to generate long-term capital appreciation through investments in businesses with:
- long-term operating track records
- temporary profitability decline
- cyclical disruptions
- turnaround potential
The strategy focuses on identifying businesses capable of:
- mean reversion
- recovery in fundamentals
- long-term value creation
Minimum Investment Amount
INR 50 Lakh
Benchmark
S&P BSE 500 TRI
Brokerage
Cash – Up to 0.12% of transaction value plus applicable statutory levies
Management Fee & Exit Load
As per executed term sheet
Other Charges
Applicable statutory and operational charges including:
- STT
- Demat Charges
- Goods & Service Tax
- Audit Charges
- Custodial Charges
Frequently Asked Questions (FAQs)
What is the 360 ONE Phoenix PMS Portfolio?
The 360 ONE Phoenix PMS Portfolio is a portfolio management strategy focused on identifying businesses undergoing temporary disruptions with potential for long-term recovery and growth.
What is turnaround investing?
Turnaround investing involves investing in businesses that are experiencing operational or financial challenges but may recover due to strategic, operational, or market improvements.
What type of companies does the strategy target?
The strategy targets businesses with:
- strong historical track records
- good management quality
- improving fundamentals
- valuation correction opportunities
What benchmark does the portfolio use?
The benchmark used is the S&P BSE 500 TRI.
What is the minimum investment amount?
The minimum investment amount is INR 50 Lakh.
What factors are considered during stock selection?
The portfolio considers:
- valuation
- profitability trends
- governance standards
- management changes
- turnaround triggers
- capital efficiency
Final Thoughts
360 ONE Phoenix PMS Portfolio follows a turnaround investing strategy focused on identifying businesses with:
- recovery potential
- improving fundamentals
- long-term growth opportunities
- strong management quality
The strategy combines business cycle analysis, valuation assessment, and turnaround investing principles to identify long-term wealth creation opportunities.
