Aparichithudu.....: The Unusual Billionaires

This book had been on my to-do list for quite some time, and finally, I was able to accomplish the task. Needless to say, it's a very insightful book, literally taking you back in time and allowing you to see how some of the great companies have evolved, what makes them great, and how to identify such gems (in stock market investors' parlance, the multi-baggers).

Saurabh Mukherjea discusses the success stories of eight Indian companies and their founders. Some of the unique traits of each of the companies are listed below:

Asian Paints: Seven decades of excellence

Founders: Champaklal H. Choksey, Suryakant C. Dani, Arvind R. Vakil, and Chimanlal N. Choksi.
Asian Paints' success lies in its strong distribution network and brand.
The company has a focus on product innovation and customer satisfaction.
The founders emphasized quality and operational efficiency.

I can vouch for Asian Paints as a happy customer, in the span of 10 years have painted my entire house using Asian paints. They stand out in quality, variety, and availability.

Berger Paints: 250 Years in the making

Founder: Lewis Berger.
Berger Paints' success is attributed to its innovation in products and processes.
The company emphasizes customer-centricity.
Berger Paints has a legacy of strong leadership.

Page Industries (Jockey): Jockeying from Manila to Bangalore

Founder: Sunder Genomal
Page Industries found success through its exclusive license to manufacture Jockey products in India.
It followed a disciplined and focused approach to brand-building.
The founders emphasized ethical business practices.

The first time I knew about this company was when I was exploring for good stocks in the stock market, I was shocked by the share price. I used to wonder who would buy this stock. After reading the book, I regretted what a gem this is and I missed it. I knew the brand Jockey much before the company :).

Axis Bank: Confounding the skeptics repeatedly

Axis Bank's growth is tied to its customer-centric approach.
The bank's founders established a culture of risk management.
It focused on technology and customer service.

HDFC Bank (under Aditya Puri's leadership):

HDFC Bank's success is attributed to Aditya Puri's leadership and vision.
The bank prioritized risk management and maintaining a strong balance sheet.
It invested in technology to enhance customer service.

I am a customer and investor in this company and have not been happy in recent times. The stock has been a laggard in the stock market, despite some good numbers. It is one of the highest-earning companies on the street. I'm hoping that some synergy benefits will yield from the recent merger with HDFC in the coming days.

Marico: From commodity trader to FMCG giant

Founder: Harsh C. Mariwala.
Marico's success came from its focus on the consumer and product innovation.
The company had a strategy of entering underpenetrated markets.
It established a culture of entrepreneurship within the organization

Titan Company:

Founder: Xerxes Desai.
Titan Company succeeded through innovation and diversification.
The company's founders emphasized product quality and design.
It adapted to changing market dynamics and consumer preferences.

I am a happy investor in this company

Astral Poly Technik: To the brink and back

Astral Poly Technik's success is tied to its focus on product quality and innovation.
The company invested in research and development.
It established strong relationships with customers and distributors.

I can recommend them as a customer because they are the best in the market. The story of Astral is nothing short of a thriller. The way the company rose from the ashes like a phoenix shows the mettle of an entrepreneur and the belief in the vision, which are important for achieving success

In the book, Mukherjea explores the unique strategies, philosophies, and management approaches that set these companies apart and allowed them to achieve exceptional results in the stock market. Each company's success is attributed to a combination of factors such as visionary leadership, innovation, customer-centricity, and a focus on long-term value creation. Readers can gain deeper insights into these companies and their founders by referring to the book for a more comprehensive understanding of their unique secrets to success.

Some Mental models and principles from the book.

Long-Term Focus: Prioritizing long-term value creation over short-term gains is a recurring theme in the book. Successful billionaires maintain a patient approach to investing and business growth.
Economic Moat: The concept of an economic moat, inspired by Warren Buffett, is emphasized. Companies with a durable competitive advantage and strong barriers to entry are preferred.
Quality Over Quantity: Successful investors and businesses focus on high-quality assets and opportunities rather than diversifying excessively.
Financial Discipline: Conservative financial management, prudent capital allocation, and a focus on cash flows are crucial for long-term success.
Conservative Debt Management: The billionaires featured in the book tend to avoid excessive leverage and prioritize maintaining strong balance sheets.
Market Leadership: Many of the billionaires' businesses are market leaders, benefiting from market dominance and pricing power.
Founder-Centric Approach: Visionary founders play a pivotal role in shaping the companies and ensuring their continued success.
Corporate Governance: The book underscores the importance of good corporate governance practices in building and maintaining investor trust.
Sustainable Growth: Rather than chasing short-term profits, these billionaires prioritize sustainable growth and building businesses that can endure over time.
Value Investing: Some of the principles of value investing, such as buying undervalued stocks and focusing on intrinsic value, are evident in the book.
Frugality and Efficiency: The importance of running a lean and efficient operation is highlighted as a way to maximize profitability.
Innovation: While a long-term focus is crucial, successful billionaires also invest in innovation to stay relevant and adapt to changing market conditions.
Scalability: Many of the businesses discussed in the book have successfully scaled their operations, often leveraging technology and efficient processes.
Consumer-Centric Approach: Some billionaires prioritize understanding and catering to consumer needs and preferences to drive business growth.
Margin of Safety: The idea of having a margin of safety when making investments is mentioned, reducing the risk of capital loss.

Saurabh Mukherjea introduces the concept of the "Coffee Can Portfolio." This portfolio approach is derived from a historical investment practice that was inspired by the way people in the Old West used to store their valuables in a coffee can buried in the backyard. The Coffee Can Portfolio is essentially a long-term, buy-and-hold investment strategy that emphasizes simplicity, patience, and minimal intervention.

There is a website that I used to screen stocks, You may also check it out. Screener.

There is a ready-made screener, called "Coffee Can portfolio". Below is the query

Sales growth > 10% AND
Sales growth 10Years > 10% AND
Return on equity > 15% AND
Average return on capital employed 10Years > 15% AND
Market Capitalization > 1000

While you may get a good list of stocks when you run that query please note there is no guarantee that each of those stocks is good. You will need to do a thorough analysis and there are many other metrics one needs to look into before deciding on investing in a stock.

Disclaimer: This post is not a recommendation to buy any stocks. Please do your own research before buying any stock.

Bonus Trivia: There is a term in stock market fraternity for the blue chip stocks like those mentioned in the book. Its called 'BAAP' stocks. BAAP stands for Buy At Any Price.