↑

Investment Philosophy

At Eiko, we follow a disciplined and research-backed philosophy for identifying scalable investment opportunities in Indian listed equities. Our stock selection framework blends structural themes with business fundamentals to deliver quality portfolios built for both growth and protection.

Sunrise Sectors & Opportunity Size

We focus on emerging sectors that are backed by strong structural tailwinds and high growth visibility. Our objective is to participate in sectors with a large addressable opportunity and multi-year compounding potential. 

Market Leadership & Market Share

Within each sector, we focus on businesses that are either established category leaders or are rapidly gaining meaningful market share. Leadership often translates to pricing power, distribution strength, operating leverage, and greater resilience in volatile environments.

We prefer industries with high profit concentration, where the majority of value accrues to the top two or three players - ensuring durability of earnings even in competitive markets.

Earnings Quality & Reinvestment

We seek businesses with strong visibility on sustainable earnings compounding - driven by operating leverage, margin expansion, and scalable business models.

Our preference lies with companies that consistently generate free cash flows and have the ability to reinvest profits at high incremental returns, without frequent dilution of equity or over-reliance on debt.

We closely track return on equity (ROE) and return on capital employed (ROCE) as indicators of capital efficiency and the strength of a company’s reinvestment engine.

Competitive Advantage

We invest in companies with durable moats - structural strengths that allow them to consistently outperform peers and sustain profitability. Our evaluation focuses on:

  • Core capabilities that are difficult to replicate

  • Cost leadership and operating efficiency

  • Product or process innovation 

  • Brand strength and customer loyalty

  • Favorable industry dynamics, including high entry barriers, supplier advantage, and limited substitution - in line with Porter’s Five Forces

Management & Forensic Analysis

Behind every great company is a trusted leadership team. We back management with a proven track record of strategic capital allocation, clean governance, and consistent execution.

Strong leadership and transparent reporting are non-negotiable pillars of our investment process.

Our evaluation includes:

  • Assessing capital allocation decisions (capex, M&A, dividends, debt)

  • Reviewing disclosures, board structure, and promoter pledges

  • Applying forensic tools to flag inflated earnings, cash flow gaps, or off-balance sheet risks

We avoid companies where management integrity is questionable, because poor governance isn't just a red flag - it's a hidden form of value erosion.

Margin Of Safety 

We invest with a clear focus on downside protection. 

  • Even great businesses can become poor investments if entered at the wrong price

  • Our approach emphasizes valuation discipline - seeking companies where the market price is meaningfully below intrinsic value. Acts  as a buffer against unforeseen risks, market volatility, or temporary business setbacks