Maximise Your Wealth with High-Quality Stocks

Identify the stocks that will grow with you

- Chirag Madia, Karthik Anand Vijay and Udhayaprakash

Had you invested `10,000 in Tata Consultancy Services (an IT company) on the day of its listing (August 25, 2004) and held it till now (i.e., April 4, 2023), you would have compounded your investment at 19 per cent per annum to `2.6 lakh.

That is impressive, isn’t it? We bet you want to know how you can pick stocks today that are likely to perform well in the future as well!

In this issue’s cover story, we will unveil the secret of wealth creation.

For guidance, we followed the book of great Indian investor Bharat Shah’s, ‘Of Long-Term Value & Wealth Creation from Equity Investing’. The core philosophy of Shah rests on the fact that highquality companies (as measured by ROCE and other factors) are the best possible options for creating wealth over the long term.

We wanted to see the results of investing in high-quality businesses. Our research showed a clear and direct relation between return on capital and stock price gains over a long term of 10 years.

What will you get from this cover story?

In the following pages, you will find details about the investing philosophy laid out in Bharat Shah’s book. In particular, his philosophy revolves around five key foundational parameters that help investors assess a company.

We have also published an interview with Bharat Shah! We then gave a list of companies, along with insights, that cleared Shah’s filters.

Note that the companies mentioned in this cover story are not our recommendations. They are also not recommended by Bharat Shah. Please research before making an investment decision.

The investment strategy of Bharat Shah

Here are five important parameters suggested by the veteran investor for wealth creation