Decoding drivers of our intrinsic premiums/discounts
began May 2025 at 2.2x Price-to-book, vs. 3.8x and 3.3x for MSCI India and MSCI World respectively. Excluding ‘Financials’, our discounts are even starker. It is critical to underscore this because we do not have any exposure to ‘Financials’, while it is the largest and second largest sector for MSCI India and MSCI World respectively. As large as our discounts stand today, we make the argument that intrinsically our biggest holdings deserve to mostly trade at material premiums over their domestic, emerging market, and global peers alike.
The exhibit below breaks down value drivers of our top-6 holdings (accounted for 87% of our long-book at the beginning of May 2025) into 5 buckets — Revenue growth, cash cycle, capital efficiency, taxes, and profitability. These were then stacked against their most comparable domestic, emerging market, and global peers to identify which bucket(s) drives our intrinsic value premium or discount relative to these peers. Our overall estimated premium or discount is also noted in the rightmost column. The idea of this exercise is to objectively look beneath the hood of headline multiple differentials.
Except for effective tax burdens, where Indian businesses expectedly lag most global peers, most other value buckets for our holdings were drivers of intrinsic premiums (in contrast to the discounts at which these names currently trade). We estimate that our median holding in this exercise deserves >20%, >60%, and >70% premium over domestic, emerging market, and global peers respectively.
For requesting more details on our book’s current and historical valuation differentials, please reach out to or .
DISCLAIMER: The information, opinions, estimates and projections contained in this note were prepared by managers of Minerva India Under-served and constitute its current judgment as of the date of this note. The information contained herein is believed to be reliable and has been obtained from sources believed to be reliable, but we make no representation or warranty, either expressed or implied, as to the accuracy, completeness or reliability of such information. We do not undertake, and have no duty, to advise you as to any information that comes to our attention after the date of this fund brief or any changes in its opinion, estimates or projections. Prices and availability of securities are also subject to change without notice. This is not a prospectus and does not constitute investment advice or an offer or solicitation to buy or sell any designated investments discussed herein. Neither Minerva Asset Advisors, nor its officers, directors, agents, or employees make any warranty, express or implied, as to the suitability of any fund as an investment or of any kind whatsoever, or assumes any responsibility for, and none of these parties shall be liable for, any losses, damages, costs, or expenses, of any kind or description, arising out of this newsletter or your investment in any fund. You understand that you are solely responsible for reviewing any fund, its offering and any statements made by a fund or its manager and for performing such due diligence as you may deem appropriate, including consulting your own legal and tax advisers.
