RCS - Ashoka India Equity - Results analysis from Kepler Trust Intelligence

Ashoka India Equity Investment TrustAnnouncement

11/03/2025 12:30

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RNS Number : 2271A  Ashoka India Equity Investment Tst  11 March 2025

Ashoka India Equity (AIE)

11/03/2025

Results analysis from Kepler Trust Intelligence

Ashoka India Equity (AIE) has released its half-yearly results for the six
months ended 31/12/2024. The share price total return for the period was 5.6%
and the net asset value (NAV) total return was 5.7%, well outpacing its MSCI
India IMI Index, which was down 2.7%.

The scale of outperformance reiterates AIE's impressive long-term returns.
Since 31/07/2018, the date post-IPO when the Company was fully invested, AIE
has delivered 96.7 percentage points of outperformance, with a 197.3% return
compared to 100.6% from its benchmark.

AIE's strong stock selection, particularly within the small- and mid-cap
(SMID) segment of the market, has helped to contribute to this outperformance.
Key contributors over the half-year period included IKS Health, which helps
physicians automate and digitise their more manual tasks and allows them to
focus on healthcare delivery.

Andrew Watkins, chairman of AIE, said: "The speed of India's growth has led
some to question over-inflated valuations and this has had a negative impact
on stocks, particularly those in the mid-cap and smaller-cap sectors where
this Company has overweight positions. There are genuine reasons to remain
optimistic for India's long-term growth prospects with attendant index-beating
investment returns likely for our shareholders."

Management, led by WhiteOak Capital Partners' Prashant Khemka and Ayush
Abhijeet, continue to deliver stellar returns, providing impressive capital
growth, of 5.7% in NAV total return turns, during a period in which the
benchmark, the MSCI India IMI Index, saw a negative return of 2.7%. Those
figures flatter the benchmark, too, as, unlike Ashoka India Equity's (AIE)
numbers, they do not deduct taxes.

In our view, these results cement AIE as the sector-leading Indian equity
investment trust. AIE's strong outperformance has helped the trust win a
Kepler Growth Rating for 2025.

In December, the board approved a non-material change to AIE's investment
policy that allows exposure to unquoted companies to rise to 12% of gross
assets.

Management notes that this exciting area provides ample opportunities for
potentially index-beating returns. Certainly, much of AIE's good performance
has stemmed from management's ability to exploit and to generate alpha within
this under-researched space.

The managers have recently earned approval to increase the trust's maximum
number of holdings. This is to take advantage of the expanding universe of
smaller companies in India following the country's impressive growth.

Despite a recent pull-back, we believe that India remains one of the stand-out
regions globally, benefitting from several tailwinds.

AIE's diversification and balanced investment approach, in our view, provides
investors with a risk-managed way into what is an exciting region with
significant alpha potential.

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