These top holdings of Madhu Kela outperformed BSE Sensex in the first half of 2021.

While BSE Sensex was 10% up till June 2021 quarter, the portfolio of stocks held by Madusudhan Kela outperformed Sensex with an astronomical return of 124% from one IT company.

2021 Outperformers till June quarter:

• Madhu Kela had a stake of 5.58% in this micro-cap company IRIS business service on Jun 30, 2021, worth Rs 11.5 crore. The stock has surged from Rs 38 to Rs 86 in a very short time. In six months the stock registered a return of 124%. 

• The second outperformer is Radico Khaitan Limited, he had a stake below 1% in this mid-cap liquor company. The stock has surged from Rs 456 to Rs 780 in the first half of 2021. In six months it registered a return of 70%.

• Third outperformer is SMS Pharmaceuticals Ltd. Madhu Kela had a stake of 1.10% in this mico cap pharma company worth Rs 14.3 crore. The stock has surged from Rs 118 to Rs 180 and registered a return of 45% in a similar time horizon.

Investment strategy of Madhu Kela

Theme Identification:

Identify big growth themes and special situations for both tactical and long-term investments.  

Bottom-up Construct:

Within the identified theme, they filter out companies with better risk-adjusted return characteristics. They use a combination of proprietary sector models, earnings/balance sheet analysis tools, risk assessment frameworks to further narrow the field for investment.  

Quality of Management:

This forms the bedrock of their investing philosophy. They look out for entrepreneurs with passion and a hunger to win. The individual must demonstrate both vision and execution capabilities.

Quality of Business:

There should be a runway for sustainable growth, capital allocation decisions, investment into IP, comparison of key operating metrics against industry benchmarks, scalability potential and right to win incremental market share/business etc, are some of the points they look out for.

These are some of the steps behind Madhu Kela's stock screening process. They are size agnostic and generally prefer concentrated, medium-term bets (2-4 years).

Madhusudan Kela (Madhu), the founder of Invexa Capital, is one of the most eminent and seasoned investors in the Indian Capital Markets. In a long and highly successful career spanning three decades, Madhu has received several prestigious accolades for his investing acumen - including the Best Equity Fund Manager from the Prime Minister of India.

When you pick a stock do you prefer using any of Madhu Kela's strategies?