India Capital Growth – A return to earnings growth

Earnings figures for the companies in India Capital Growth (IGC)’s portfolio are increasing as India puts the disruptive effects of demonetisation and the introduction of the Goods and Services Tax (GST) – both of which were covered in QuotedData’s March 2017 note – behind it. Rising oil prices may be a headwind but India’s domestically focused economy should be relatively sheltered from a global trade war. Gaurav Narain, investment adviser to IGC, thinks we could see the companies in IGC’s portfolio reporting average earnings growth of at least 20% a year for the periods ending March 2019 and March 2020.

IGC’s focus on mid-and-small-cap companies has allowed it to deliver superior performance to competing funds (see page 11). As present, this is not reflected in its share price. The management team is working hard to narrow IGC’s discount, however.

Mid-and-small-cap listed investments in India

IGC’s investment objective is to provide long-term capital appreciation by investing (directly or indirectly) in companies based in India. The investment policy permits the company to make investments in a range of Indian equity securities and Indian equity-linked securities. The company’s investments are predominantly in listed mid-and-small-cap Indian companies.

IGC : India Capital Growth – A return to earnings growth