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Carnelian Capital Shift Strategy


Shift Strategy (PMS)

  • Strategy designed to capture structural decadal shifts presenting large opportunity in
  • Manufacturing led by conducive regulatory and global environment
  • Tech evolution empowered by digitalization globally
  • Concentrated QGARP (quality growth companies at a reasonable price) portfolio
  • Blend of mid & small cap listed companies having
  • niche core competence & large opportunity size
  • Proven track record
  • impeccable management capabilities
  • Stock holding : 20-25 ; Benchmark against BSE 500 TRI
  • Subjected to stringent Carnelian filters & forensic checks (CLEAR framework)

Pandemic accelerated 2 structural shifts

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India on the cusp of manufacturing boom on account of

Govt. Reforms

  • Focus on Atmanirbhar Bharat
  • Manufacturing boost by production linked incentive schemes
  • Tariff & non-tariff barriers
  • State labour reforms

Cost Competitiveness

  • Labour: 1/2-1/3x China
  • Logistics & power costs = China
  • Lowest tax rates globally @ 17%
  • China’s cost advantages have significantly narrowed down

China + 1 Shift

  • Led by anti China sentiments
  • Over dependence on China to create huge opportunity for China +1

Strong Domestic Markets

  • Domestic markets + exports/ imports = economies of scale

Government initiatives and reforms

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Further impetus through tariff & non-tariff barriers

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India hardly used non-trade tariff barriers like China/other countries which is set to change;

  • No global tenders less than INR 200 cr
  • No automatic FDI approval to 200 countries sharing borders
  • Special registration required for participating in contracts with neighboring countries

Aided by cost competitiveness

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China+1 shift will create big opportunities

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Which sectors will benefit

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Who will benefit – characteristics of companies

  • Core competence/ niche capability
  • Proven track record / platform
  • Strong balance sheet
  • Strong Governance
  • Existing presence (market share)


Key emerging tech shifts accelerated post pandemic:

  • Digitalisation
  • Cloud Migration
  • Software as a service
  • IT services
  • Tech enabled platform businesses

Technology – IT Services

  • Covid has prompted companies worldwide to rethink & shift; Indian IT Tech companies an important clog in the wheel
  • Demand for digital spending is “global” & supply is only “local”
  • IT services exports industry to grow from USD 225bn in 2022 to USD 350bn by 2026
  • 50% of the revenue getting spent as salaries/wages in the economy as first order effect which will boost consumption. Second and third order effect yet to follow.
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Faster, Stronger, Cheaper

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