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Aurum Capital 4th
Anniversary Newsletter: Aug 02, 2022
We are extremely happy to share and thankful to our subscribers as Aurum Capital today completes 4
years of providing Gold Standard Research services in the Indian equity market. Driven by passion, a deep
understanding of value investing, cyclicals, sector knowledge, and behavioral finance, we continue to
guide investors to the best of our ability with ethics, honesty and integrity. Our goal is to work towards
financial freedom of our subscribers and to give superior returns than the relevant indices. It makes us
happy when financial and personal goals of our subscribers are met like someone attaining financial
independence, someone buying their dream house, someone retiring their loans early, children education
to name a few.
While we are celebrating our 4 years of journey, we would like to provide a detailed overview of our
performance and views on various sectors that we are currently bullish on.
Our Investment Philosophy
We do not predict short term moves in the market. We do not predict index levels. We are bottoms up
investors and prefer to look at individual stocks and sectors. We believe long term of equity investing is
very good for the Indian markets. The key is to stay invested, at the same time managing risk based on
valuations and risk-reward ratio of individual stocks/sectors and managing our behavior. We believe this
is where we have an edge. And we keep guiding our customers towards these aspects of behavior.
Our performance
1. Value Investing Research Service: This product has completed 4 years today and is our first product.
This product has weathered challenges in the markets like economic slowdown, extreme polarization
of market towards a handful of stocks, CoVid19 disruption, and Ukraine-Russia war amongst others.
Despite all these challenges, and with minimal drawdowns, it has returned 150% (absolute) with a
CAGR of 25.7% since inception. The benchmark returns are as mentioned below. Max drawdown in
this product has been about 35% during the Covid19 fall of Mar 2020.
To celebrate 4th
anniversary of Aurum Capital, we are giving limited period special discount:
 Value Investing Research Services: https://aurumcapital.in/services [up to 25% off, click the link for details]

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2. Cyclical Bets Smallcase: This product was launched on Mar 20, 2021 on the smallcase platform. Till
date this product has returned 76.49% (absolute) in about 16 months with a CAGR of 53.17% since
inception as against the benchmark returns of 13.73% (absolute) and a CAGR of 10.13%. Despite it
being a cyclical focused product, it’s a low volatility product. This is due to our deep understanding and
experience in cyclicals.
To celebrate 4th
anniversary of Aurum Capital, we are giving a flat 50% discount for a limited period:
 Cyclical Bets Smallcase: https://www.smallcase.com/smallcase/cyclical-bets-portfolio-AURMO_0001
[Code: AURUM50, flat 50% off on 1 year plan]

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Views on some of the key sectors that are under coverage
Capital Goods/Manufacturing
We took a contra call on this sector. We have highest number of research stocks under coverage from this
sector. We had started seeing greenshoots due to our scuttlebutt and talking to various people in this
sector. We could anticipate a turn in the cycle after a long downcycle. Aurum Capital was one of the first
ones to turn positive on the sector and could recommend many stocks at very attractive valuations. We
have been handsomely rewarded as we have multibagger returns from this sector. Of course, valuations
or better opportunities may drive exits in the future. We continue to remain positive on this sector.
Paper and Paper Products
We recommended stocks from this sector during Covid downturn. Founders have been tracking this sector
for a very long time and understand the sector and its cycles to a reasonable extent. The turnaround in
this sector has been superb and we again have multibagger returns from this sector. We think there are
structural changes in the sector. No new capacity is coming in the sector and demand is growing at close
to double digits. We expect FY23 to be a great year for paper stocks. Again, we will benchmark decisions
based on valuations and risk-reward.
Banking and Finance
This is one sector which has highest weightage in the indices. But we had 0 stocks in this sector until 2022
as we believed that there were problems in the sector. We expected downcycle and it played out in the
same way. And that is why indices underperformed. We patiently waited for greenshoots and when we
felt that worst of cycle was behind us, we initiated coverage and made recommendations in the sector.
We are of the opinion that worst of NPAs are behind and we will see uptick in credit offtake.
Hotels
This is another sector where we went at the peak of pessimism. It was during the peak of 2nd
Covid wave
in India in Jun 2021 when we recommended stocks from the sector for the first time. We believe that the
peak has not happened in this sector. The peak revenue, peak margins and peak profits and peak stock
price is still sometime away. We will continue to hold the stocks. However, we will be nimble and if there
any changes in the facts then we will change our views too.
Cement
We have recommendations in this sector, and we are seeing moderate returns from this sector. Of course,
we had already taken some exits when risk-reward was not in favor. We believe valuations are very
favorable and one must be invested in this sector. As negatives are overplayed. Many promoters have
been buying their stocks and that’s always a good indicator.
Real Estate
We recommended this sector in Oct 2020 when it was going through the peak of pessimism. The sector
has done well so far in terms of operating business performance. It has come out of the slowdown after
almost a decade of difficult time during which it was directly impacted by the major regulatory changes
including RERA, demonetization, and GST. The sector is poised for growth. We also believe the branded
and the organized players will continue to wean away market share from the unorganized players. We
continue to remain positive. However, we will be mindful of the valuations and if we find any mismatch
we may take a call to book profits too.

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Telecom
Telecom sector has gone through a major consolidation and our investment thesis remains intake so far.
We had anticipated a price hike i.e. increase in Average Revenue Per Unit (ARPU). It has happened but
not at the pace and amount of our liking. However, this has also resulted in enormous sustainability
pressure on the third private telecom player. There is certainly room for more increase and it may happen
as spectrum spending by the companies built up while the competition remains subdued. We continue to
keep a watch on the developments in the sector including any fresh competition. We, however, feel that
this sector will do well for a very long time as very few players remain and competitive intensity may
reduce going forward. We will obviously keep evaluating the risks as this is a capital intensive sector.
Infra
This sector has not performed well during last one year. This is a promising sector. A lot of investments
are happening and there is a significant government spending too. However, esp in road infra sector, there
was a stiff competition in the HAM projects and there were unofficial reports that there was undercutting
by some of the developers. Such intense competition leaves very little room for the error and many
players acting aggressively book losses while executing the projects. This was one of the reasons why good
organized players were not reporting many project wins during last one year. Project wins gives a flow of
oxygen to the infra companies. Now the government has also realized and NHAI has made some changes
in the project bidding process to fill the gaps causing excessive competition. We are positive on the sector.
Similarly for power and railway infra also growing rapidly. We have a company that has a large exposure
the segment and growing rapidly in these areas. However, that company also has presence in international
market where it faces some headwinds.
Education/Book publishing
This is a new sector that we see has a window of opportunity due to upcoming changes in the Curriculum.
The National Education on Policy (NEP) was implemented in 2020. It appears to be very progressive
Education Policy. The last major NEP was in 1986. New NEP has to follow by a new Curriculum. However,
the new Curriculum got delayed due to pandemic. The Ministry of Education is actively working on the
development of New Curriculum Framework (NCF). It is expected to be launched by the end of this
calendar year and may get implemented from the next academic year. So far the NCF is revised four times
so far viz. 1975, 1988, 2000, & 2005. The current one will be the 5th
framework. Whenever, a new NCF has
come, it has led to a significant growth for the book publishers for next 3-4 years as old/second hand
books get discontinued. Investors have very limited choices as there are not many listed players in this
space. We have recommended one stock in our Cyclical Bets smallcase.
Metals
We had exited one steel stock earlier and recommended one Aluminum stock. We were of the opinion
that the best in steel sector was behind us. And again, that has played out. We have a neutral coverage
on this sector currently after the correction. On Aluminum sector we continue to remain positive from
valuation front and from cyclical point of view.

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About Us
The founders have a combined experience of 5 decades in the market and well-known in the industry for
providing investor education through different mediums like business channel interviews and newspaper
articles, various forums like CFA institute, management education institutions like MDI, Gurgaon and
various educational webinars, seminars, podcasts.
We thank you again for your continued support and confidence in us. Wishing you best and Happy
Investing.
Regards,
Research Analyst
Aurum Capital
SEBI Registration No: INH000008118
The founders’ contribution to equity investing is chronicled here.
(These are not recommendations)
https://aurumcapital.in/blogs/category/knowledge-series/
PS:
A note about our performance measurement practices and recommendations:
 Our performance remains the same as displayed on the screen for all starting from the
beginning.
 We include all exits to arrive at our performance. We do not remove/hide any stocks
exited by us even if we have booked any losses.
 We give our recommendations in a price range. We do not and will never take the lower
price of the band while calculating buy. Similarly, we do not and will never take the upper
price of the band while calculating gains for exit.
 This, we believe, avoids any bias for artificial gains. It rather reflects performance close to
the reality. We never try to manage our performance. It is as is in black and white and
mostly tilted to benefit the subscribers.
 Please always follow our detailed research and subsequent updates on the company
provided under Current Recommendation section.
 If any questions then these can be raised in Investor Forum section for paid subscribers.

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 Value Investing Research Services: https://aurumcapital.in/services
[up to 25% off, click the link for details]
 Cyclical Bets Smallcase: https://www.smallcase.com/smallcase/cyclical-bets-portfolio-AURMO_0001
[Code: AURUM50, flat 50% off on 1 year plan]