Large businesses often face the risk of stagnating growth due to saturation of their core market or disruption from new innovators. One way to mitigate this risk is to invest in disruption, innovation & expansion of the business into adjacencies. However, successful execution of such capital allocation decisions is not dependent only on strategic decision-making & a strong balance sheet. Instead, success in such endeavours is critically dependent on the availability of high-quality leaders, preferably internally groomed, to execute the new business initiative with focus, discipline and rigour. Hence, the longevity of such firms becomes a self-fulfilling loop – successful capital allocation decisions help retain high quality internally groomed talent, and the availability of such talent fuels success at disruptions / innovations / adjacency expansion.

we discuss some of such case studies from our global equities’ coverage and some investments from our domestic CCP portfolio, whose evolution demonstrates the interplay between succession planning, successful expansion, extended longevity of Free Cashflow growth (beyond the market’s expectations) and thus undervaluation of the stock.

We will also provide an update on our portfolio’s fundamentals and how we expect these fundamentals to evolve in future.

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