logo
Cash flow, return on capital key to identifying wealth creators: Priyankar Sarkar of Square 64

Cash flow, return on capital key to identifying wealth creators: Priyankar Sarkar of Square 64

Time of India21-07-2025
In the latest edition of ETMarkets PMS Talk,
Priyankar Sarkar
, Co-Founder of
Square 64 Capital Advisors LLP
, shares insights into his investment philosophy and strategy that have helped his newly launched
multicap fund
deliver impressive returns.
Sarkar emphasizes the importance of consistent
cash flow generation
and incremental
return on capital employed
(ROCE) as key metrics for identifying long-term
wealth creators
.
Focusing on a disciplined,
value-oriented approach
, he highlights how combining patience with selective investing in high-quality businesses can unlock sustainable growth over time. Edited Excerpts –
Q) Thanks for taking the time out. Please take us through the performance of the fund in June when you Multicap fund clocked more than 19% return?
Explore courses from Top Institutes in
Select a Course Category
Project Management
MBA
CXO
MCA
Public Policy
Data Science
Product Management
Data Science
Management
healthcare
Finance
Technology
Operations Management
Healthcare
Artificial Intelligence
Design Thinking
Leadership
others
PGDM
Others
Cybersecurity
Data Analytics
Degree
Digital Marketing
Skills you'll gain:
Portfolio Management
Project Planning & Risk Analysis
Strategic Project/Portfolio Selection
Adaptive & Agile Project Management
Duration:
6 Months
IIT Delhi
Certificate Programme in Project Management
Starts on
May 30, 2024
Get Details
Skills you'll gain:
Project Planning & Governance
Agile Software Development Practices
Project Management Tools & Software Techniques
Scrum Framework
Duration:
12 Weeks
Indian School of Business
Certificate Programme in IT Project Management
Starts on
Jun 20, 2024
Get Details
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Bo Derek's Probably The Most Gorgeous 68-Year-Old.
Paperela
Undo
A) Leading the gains is our largest holding, which has surged by an impressive 61.6%. It is a company in the aerospace and defence space with a very healthy and growing order book.
A mid-sized upstream oil and gas company, which holds the second-largest weight in our portfolio, has also shown strong performance with a 26.5% increase.
Our third-largest company is a life insurance company that is part of the Nifty 50 index, which had modest gains of ~5% for the month of June.
Live Events
These results underscore our balanced approach, capturing high-growth potential while maintaining exposure to stable, long-term value creators.
Q) It is a newly launched fund, but the numbers are impressive especially for the past few months. Please take us through the investment objective?
A) Our goal is to compound capital steadily over time without taking undue risk. We follow a disciplined, value-oriented approach, focusing on high-quality, consistent compounders temporarily overlooked by the market.
This disconnect often creates a favourable risk-reward equation, allowing us to enter at attractive valuations. We believe growth and value are joined at the hip, true value lies in sustainable growth trading at attractive prices.
Simply put: buy quality when it's out of favour and let compounding do the heavy lifting. It's not about chasing momentum, but about patience, conviction, and a long-term perspective.
Q) Being sector and market cap agnostic gives you wide flexibility. How do you ensure diversification and risk management without restricting yourself to specific segments?
A) We do run a fairly concentrated portfolio, but we ensure adequate diversification by limiting exposure to any one sector, typically, we avoid having more than two holdings from the same space.
Our value-conscious investment style acts as a natural risk filter. We're not in the business of paying up for growth, which helps us avoid frothy valuations and the risks that come with them.
This bottom-up discipline allows us to stay selective, reduce downside risk, and compound capital efficiently over the long term.
Q) How do you assess management quality, especially when investing in family-owned companies versus professionally run firms? Are there different evaluation parameters?
A) Management quality is a cornerstone of our investment process. We prioritize companies led by leadership teams with a proven track record.
We remain vigilant for red flags such as frequent equity dilution or questionable related-party transactions. Additionally, in professionally managed firms, incentive alignment plays a crucial role; we carefully assess ESOP structures and compensation policies to ensure management's interests are closely tied to long-term shareholder value creation.
Q) You hold a portion of your portfolio in liquid ETFs. Could you share your strategy behind maintaining cash equivalents in your portfolio? Is it tactical or a consistent allocation?
A) We currently maintain a portion of the portfolio in liquid ETFs, and this is a tactical decision rather than a structural allocation.
There's an old market adage in the equity markets that says you either get good prices or good news, seldom at the same time.
In the current environment, particularly in the mid and small-cap segments, valuations are stretched, and sentiments are running high.
That calls for a degree of restraint. We believe it's prudent to keep some dry powder ready. This cash position gives us the flexibility to deploy when more compelling opportunities emerge.
Q) Let's talk about markets. Well, we have seen volatile 1H2025 but bulls managed to have an upper hand. How do you see markets panning out for the rest of the calendar year?
A) There are numerous macroeconomic factors in flux, ranging from inflation dynamics and interest rate policies to global geopolitical developments.
Given this complex backdrop, the market appears somewhat elevated at current levels. This suggests the possibility of a meaningful correction, either in terms of price or time, before we can expect a sustained rally.
In such an environment, it has become increasingly difficult to scout for genuine value opportunities.
Q) What is your wealth creation mantra which have worked for you? It could be a ratio or metric which you always track.
A) Over the years, I've realized that cash flow is paramount. If a company has generated positive operating cash flow consistently for the past decade, it's a strong signal that's hard to overlook, as very few companies meet this benchmark.
Alongside cash flow, I closely track incremental Return on Capital Employed, which has been a reliable metric in identifying quality wealth creators.
Orange background

Try Our AI Features

Explore what Daily8 AI can do for you:

Comments

No comments yet...

Related Articles

No smart meters for farmers, rollout limited to industrial, commercial consumers: AP energy minister
No smart meters for farmers, rollout limited to industrial, commercial consumers: AP energy minister

Time of India

time40 minutes ago

  • Time of India

No smart meters for farmers, rollout limited to industrial, commercial consumers: AP energy minister

Visakhapatnam: Energy minister Gottipati Ravi Kumar underscored the critical need to raise public awareness about smart electricity meters. He clarified that no smart meters have been installed for agricultural connections in Andhra Pradesh, affirming that the rollout is limited solely to industrial and commercial consumers. He directed the Discoms to proactively educate people, clarifying the smart meter policy and dispelling any misinformation or apprehensions about the technology. A comprehensive review meeting was held on Monday by Minister Gottipati Ravi Kumar, with participation from APEPDCL CMD Immadi Prudhvi Tej, to assess power supply within the APEPDCL jurisdiction. Officials reported that power supply aligns well with demand and emphasised that in nine out of eleven agriculture-focused districts, nine hours of continuous electricity is being reliably supplied to farming consumers. The minister emphasised that misconceptions circulating on social media must be addressed through structured outreach efforts. He called on officials to engage directly with consumers, providing accurate information on where and why smart meters are being deployed, ensuring that any doubts are resolved before installations proceed. Addressing infrastructure concerns, the Minister expressed concern about supply disruptions and instructed officers to proactively tackle low voltage issues. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like If you have a mouse, play this game for 1 minute Navy Quest Undo He inquired about the status of the RDSS (Revamped Distribution Sector Scheme) works and directed that local contractors be engaged to accelerate project execution. The Minister also reminded officials that central funding for Phase II of RDSS will be sanctioned only after the successful completion of Phase I. The Minister reiterated that no smart meters are being introduced in the agricultural sector, reaffirming that installations are restricted to industrial and commercial consumers only. He acknowledged the spread of false rumours on social media regarding smart meters and firmly instructed officials to launch public education efforts to dispel such misconceptions. He emphasised that smart meters should be installed only after receiving affirmative consumer feedback. Officials also briefed the energy minister on the progress of the PM Surya Ghar scheme, noting that Eluru leads in implementation, followed by Visakhapatnam, West Godavari, and East Godavari. Acting on directions from chief minister Chandrababu Naidu, the energy minister instructed officials to ensure that at least 10,000 Surya Ghar solar connections are provided per constituency under the scheme. The review meeting was attended by directors, CGMs, and senior officials.

Leo Daily Horoscope Today, July 29, 2025: See beauty through the eyes of gratitude
Leo Daily Horoscope Today, July 29, 2025: See beauty through the eyes of gratitude

Time of India

timean hour ago

  • Time of India

Leo Daily Horoscope Today, July 29, 2025: See beauty through the eyes of gratitude

Today invites you to look at life with a thankful heart. Even small things you often ignore carry blessings. Instead of worrying about what is missing, notice what is already working well. A shift in your view can lighten your mood and attract more positivity. Challenges may still exist, but they will feel lighter when you hold gratitude in your heart. Simple joys, kind people, and lessons from daily life will appear more meaningful. Let thankfulness become your guiding thought today. Leo Love Horoscope Today In love, show appreciation rather than expecting too much. If you are in a relationship, notice the good in your partner and express it. Small compliments or a gentle hug can make a big difference. If single, be grateful for the space to understand yourself better. Instead of feeling alone, enjoy the peace that independence brings. When your heart is thankful, it glows with warmth. This glow attracts real love. Be gentle, not demanding. Love will find its way to a heart that is open and thankful. Leo Career Horoscope Today Career-wise, you may feel the urge to move ahead quickly, but today's strength lies in patience and appreciation. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like 40+ Celebrity Couples When They First Got Together vs. What They Look Like Now BridesBlush Undo Thank your team or a colleague for their support. This will strengthen workplace bonds. If working alone, feel proud of how far you have come. Your gratitude will reflect in your work and attract good outcomes. Do your part with full heart and let the universe reward your steady efforts. Leo Money Horoscope Today Money matters become easier when you shift your focus from lack to sufficiency. Be mindful of what you already have. A peaceful financial mindset grows from appreciating small gains. Avoid impulse spending and take joy in saving even a little. You may find an old bill or item that reminds you of how far you have come. Stay calm and grounded in money matters. Gratitude today will help you build security tomorrow. Leo Health Horoscope Today Your body and mind respond well when you live with gratitude. Tension in shoulders or heaviness in the back may ease when you take a moment to feel thankful. Focus on what your body does right, not just on discomforts. Drink warm fluids and stay close to nature if possible. Your energy will rise when you smile from within. Do not rush your meals or overthink. Rest and recharge with peaceful thoughts. Your overall well-being begins with appreciation for the present. Discover everything about astrology at Times of India , including daily horoscopes for Aries , Taurus , Gemini , Cancer , Leo , Virgo , Libra , Scorpio , Sagittarius , Capricorn , Aquarius , and Pisces . Read your detailed Horoscope Today and Horoscope Tomorrow here.

RTO Flyover Likely To Open by August-End
RTO Flyover Likely To Open by August-End

Time of India

timean hour ago

  • Time of India

RTO Flyover Likely To Open by August-End

Nagpur: The much-delayed flyover on Amravati Road is likely to open for the public next month. The national highway (NH) division of the state public works department (PWD) has completed three of the four slabs of the RTO bridge, which was reconstructed to accommodate the landing of the flyover. However, with several other works yet to be completed, the NHAI is all set to miss the revised deadline of July 31. The fourth slab, which will be part of the Bole Petrol Pump to Law College Square approach road, is still pending, and construction is set to start soon. Authorities are now planning to open the flyover for traffic by the end of August. According to PWD officials, most of the work related to the flyover is complete. Works not directly linked to the flyover, such as footpath construction and beautification, will continue even after the opening. Streetlights have been installed on the flyover. For concretization of the road between University Square and Futala, the PWD has sought permission from the traffic department to close one side of the existing road. "Continuous rain affected the construction work, but now we are back on track. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Emergency Generators in Guayaquil: (Prices May Surprise You) Emergency Generator | Search Ads Search Now Undo We have planned the slab of the flyover landing on August 2. The fourth part of the bridge reconstruction will be done soon," a PWD official told TOI. The official also claimed that once the slab of the flyover landing is done, they would speed up the work on the retaining wall. The flyover is being built at a cost of ₹245 crore. It was proposed along with the Wadi Flyover as part of the ₹478 crore Amravati Road Traffic Improvement Project (ARTIP) to reduce congestion on the busy stretch. Both flyovers are a vital part of ARTIP, spearheaded by the Ministry of Road Transport and Highways (MoRTH). **Box: List of Pending Works** - Slab laying of the landing of the flyover. - Retaining wall construction on the Bole Petrol Pump side. - Construction of the fourth part of the RTO bridge. - Construction of the remaining part of the old Ravi Nagar bridge. - Reconstruction of squares at Ravi Nagar, Bharat Nagar, and others. - Concretisation of roads below the flyover on both sides between University Square and Futala. - Footpath and drainage line construction.

DOWNLOAD THE APP

Get Started Now: Download the App

Ready to dive into a world of global content with local flavor? Download Daily8 app today from your preferred app store and start exploring.
app-storeplay-store