This issue of Outside the Box newsletter is authored by Jatin Khemani. Jatin shares his key observations from analyzing market leaders across industries in India.
One common advice I find veteran investors passing on to next-generation investors is to look for companies dominating their industry and enjoying entry barriers ensuring their profit pool share is protected.
Now, ideally, we may think that the top 3-4 players by market share in any category should be qualified as ‘dominant players’ even if their respective market share is in single digit. However, for the purpose of this research, I have restricted my analysis to only those companies that enjoy at least a 35% share in their respective categories.
You must be thinking that it is quite a stringent filter and there would only be a handful of companies that will make it to the list – after all, we are a free economy with enormous capital chasing opportunities on one side and ever-tightening regulations in the form of competition commission etc., on the other.