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Long Term InvestingLow Portfolio ChurnDiversification BenefitLow Volatility

“All men’s miseries derive from not being able to sit in a quiet room alone.”

– Blaise Pascal

Our portfolio has a low turnover rate of 11.5% since inception.

Several academic studies have shown that investors who trade the most earn the lowest returns. At Nirmiti, we have always aimed to identify long term investment opportunities by focusing on companies in India that we believe are Creator’s of leaders, great executors, and beneficiaries of disruptive innovation. Being firm believers in the concept of sustainable wealth creation, our investment philosophy is based on taking a Center Approach. We see ourselves as a focal point between being unbiased while selecting stocks and having a mix of Disruptive Innovators and steady compounding companies. This approach ensures we do not take high risks to deliver high returns.

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We believe that great businesses are created as they possess one or more of the following Quality Characteristics


The “First Mover” Advantage in dominating the market seems like an outdated concept in today’s agile world.

In order to dominate the market and earn a superior cash flow for a foreseeable future, investors should be able to “Scale Up” quickly.

With a Larger Market Share, comes higher operating margins & greater pricing power. Over a period of time, these companies would end up holding a large market share in their preferred sectors and be able to play the game according to their own rules.


Customer Switching Costs

Successful companies typically try to employ strategies that incur high switching costs on the part of consumers to dissuade them from switching to a competitor’s product, brand or services. Besides, these companies keep innovating constantly to ensure that customer churn is low.

Many IT companies make it tough for their clients to switch. In critical applications like banking softwares, the clients are discouraged to switch as there are data integration & migration issues, training costs etc.

We ride upon this predictable growth pattern, as companies keep on increasing their costs annually & also reduces the risk of market share losses.

Intangible Assets

Brands, patents, trademarks, and licenses, are all “intangible assets” the true value of which cannot be assessed in the Balance Sheet. But they are a strong source of economic moat since they have been built over a period of time.

Organisations that have built great brands often stand separated from the herd and thus can leverage their brand equity by introducing newer products & services that enjoy customer loyalty.

For us and the investors, stronger the brand, higher the operating margins.



We look at technology not just as an industry, but more as an inseparable part of a company’s business model. Organisations that do not shy away from investing heavily in technology are known to amass more wealth as they are more agile, scalable & efficient.

Adapting to new technologies & re-inventing the business model tells us a lot about the leadership qualities of the top management.

A mix of these elements is seen in our investment framework.

Investment Framework

Top Line Growth

Businesses must have high & consistent sales growth in both good & bad cycles.

Corporate Governance

At the end of the day, we are minority shareholders. Hence, we must hold businesses that follow the best corporate governance practices.

Skin in the Game

We like business run by promoters who hold a large chunk of their business.

Cash Flow is the King

In a world where smart accountants are hired to make their companies more “profitable”, we believe one has to go one step forward & look at the Cash flows of the company.

Capital Allocation is the key

Companies must be able to re-invest their profits at a higher rate of return and compound wealth.

Investment Process

“Market leadership along with an innovation mindset is the key to growth.”

At Nirmiti, we take a centered approach while curating sustainable wealth plans and focus on those businesses that are tycoons in their fields and are the makers of leaders, risk takers and disruptive innovators.

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Portfolio Construct

Innovation and technological spends are great enablers of growth. Companies leveraging on innovation and disruption have not only gained market share from erstwhile leaders but also have created new niche market segment. Following is a journey of a disruptive innovator company

  1. Heavy upfront cost
  2. Deceptively suppressed earnings at the beginning
  3. Inefficient Price discovery due to inability to accept change
  4. Slow market acceptance
  5. As scale increases, operating leverage kicks in
  6. Achieve unmatched Pricing power
  7. Financials turn around
  8. Markets re-rate companies with higher growth multiples

These companies help reduce portfolio drawdowns due to the technological edge and a healthy balance sheet. They have sustainable operating margins throughout market cycles which shows Cost leadership qualities. High Demand due to superior products & services enables them with superior Pricing Power, which leads to higher gross margins and Low Cash conversion cycles.

  1. Advantage of Monopoly / Duopoly due
  2. Steady cash flows
  3. 1st Mover Advantage
  4. Proven Management
  5. Ability to bellwether left tailed events and subsequently grab higher market share
  6. Excellent capital allocations practices lead to higher ROCE (ROE for Financials)
  7. Constantly reinventing customer experience
  8. Shareholders interest 1st approach with transparent reporting standards

These companies show consistent sales growth due to niche market segment and larger target audience. They reinvest their profits at every level which results into high value creation for shareholders.

  1. High Revenue Growth
  2. Structural Tail wind in the segment
  3. Scalable business model
  4. Market leadership
  5. Debt Free
  6. Reinvests cash at higher incremental ROCE / ROE (For Financials)
  7. Consistent and Positive Cash flow from Operations

Investing in stocks which are potential turn around stories due to changing business landscape and financial re-engineering.

  1. Value Unlocking because of Corporate action (Merger / Demerger, Change in Management, Corporate restructuring etc)
  2. Re-rating due to balance sheet deleveraging
  3. Alternate Asset Classes