Amey Kulkarni of Candor Investing presented his in-depth investment thesis on Ashiana Housing (NSE: ASHIANA) at Asian Investing Summit 2018.

Thesis summary:

Ashiana Housing is a real estate developer with a long growth runway in a country with 1.3 billion people, including 275 million families. Ashiana is a conservatively financed, well-run real estate operation in a country that is rapidly urbanizing, with a housing shortage in urban areas estimated at 18 million units.

Ashiana is run on a business model similar to that used by Mohammed Yunus to build the Grameen Bank in Bangladesh: “First check what the industry peers do and then go and do the exact opposite.”

Given that construction is financed by advances from customers, the company requires little external capital, except during a severe cyclical downturn. Ashiana, with average pretax ROIC of 25+%, is available at an earnings yield (five-year average pretax cash from operations to enterprise value) just below the ten-year government bond yield.

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About the instructor:

Amey Kulkarni is an investor in Indian public markets, following a bottom-up investment philosophy. Amey has worked closely with top managements of multi-national corporations in India, including L&T, Jindal Steel, and Siemens for almost a decade in roles in business development, business planning, and project management. At Candor Investing, Amey invests in companies that have the potential to grow five-fold in five years or ten-fold in ten years. Amey invests in companies deriving competitive advantage from unique or innovative business models.