"I travel across the country to hunt down small caps with
explosive profit potential" - Richa Agarwal

Richa Agarwal is the editor of two extremely successful stock recommendation services in the smallcap space - Hidden Treasure and Phase One Alert - as well as Equitymaster Venture, a service which recommends Indian stocks in the technology space.

Richa has over 14 years of experience in financial markets.

After getting her MBA in Finance from Symbiosis International University in Pune, Richa went to work for HSBC group.

Though based in India, Richa was tasked with providing analysis for UK and Hong Kong based companies. But she always questioned whether she could provide effective analysis of a company from 7,000 km away.

This led her to Equitymaster, where, as a Research Analyst, she could focus solely on Indian companies. It also let Richa deploy her favourite investment strategy - Boots on the ground research.

Smallcap Guru

Richa specialises in the practice of bottom-up stock picking. This style of stock picking is well suited to smallcaps. She never recommends a stock without first talking to the company's management.

While most analysts do all their research from a stuffy office, Richa goes the extra mile. She has travelled hundreds of thousands of kilometres in search of new investment ideas for her subscribers.

One week, you will find her in Bengaluru, interviewing the management of a small IT firm. The next week, she'll be on the factory floor of a cotton mill in Delhi. She has discovered many smallcap stocks in this manner which went on to become multibaggers.

After meeting the promoter of a packaging company in Hyderabad, Richa came away impressed. The financials and the growth prospects were impressive. But Richa also noticed the promoter's passion for his work.

She realised that to stay ahead of the curve, he was willing to focus deeply on the company's products and processes. It was this focus that helped this small company become the market leader in its niche as well as the go-to supplier for big names like Asian Paints and Castrol.

Richa knew she had discovered a company worthy of the title 'Hidden Treasure'.

She didn't waste time in recommending the stock to her subscribers. After her recommendation in March 2016, the stock went up more than 4 times as of September 2021.

*Past performance does not guarantee future returns

On another occasion, she discovered a small microfinance company in Ahmedabad with a strong customer base of female co-operative workers.

The case was so compelling that she recommended the stock right away. After the recommendation in Phase One Alert in February 2017, the stock went up 2.5 times by the September of 2021.

*Past performance does not guarantee future returns

Richa's due diligence is the reason behind the success of her recommendations

Over the years, Richa and her team has made profitable smallcap recommendations to Hidden Treasure subscribers.

Some of Hidden Treasure's superhit recommendations are...

• 1,400% in eClerx Services in less than 12 years
• 1,058% in Balkrishna industries in less than 7 years
• 553% in Coforge in less than 7 years
• 489% in City Union Bank in less than 7 years
• 330% in Can Fin Homes in 2 years

*as on 30th September 2021

"Prior to Hidden Treasure, I was looking at a flood of investment advises from various sources such as Money Control, ICICI-Direct etc. I was basing my investment decisions on these recommendations. The Hidden Treasure subscription price was attractive and the actionable recommendations came at an easy to manage monthly interval.6 to 7 of the recommendations have been a hit. These are acceptable odds to me. Good value for money. The Hidden Treasure team is doing an excellent job and service to the subscribers. My compliments to the team."

- Mohammed R Khan, Chennai

Richa believes small companies, unlike their bigger counterparts, have a longer runway for growth as well as higher potential upside. However, it's important to be very selective in this space.

Here's Richa in her own words...

• 'There are thousands of companies listed under the smallcap category.
  
  But only a few are likely to break the mould of a smallcap and upgrade to a midcap, or potentially even a largecap in the long term.
  
  Using a bottom up approach maximises your chance of picking potential winners. This means focusing on business specific fundamentals and valuations, along with macro factors.'
  
  - Richa on picking winning smallcaps

Richa on Avoiding Losses

Richa's management meetings have also helped her find stocks to avoid.

After visiting a niche healthcare firm in Nashik, Richa discovered the company's fate was not in the hands of its management. Rather it was decided by government policies of developing countries where it sold its products.

Needless to say, she didn't recommend the stock.

During the 2020 lockdown, Richa and her team focused on recommending 'essential stocks'.

Due to the focus on avoiding companies struggling to cope with the disruption, her subscribers received recommendations with low downside and high upside.

Her long-term orientation and focus on strong fundamentals keeps her away from recommending loss making IPOs too.

This is what Richa had to say about loss-making IPOs like Paytm...

• 'If any of these loss making companies with upcoming IPOs comes closer to profitability, I believe there will be a better time in future to own them rather than at the time of IPO.
  
  In the meantime, I'll focus on companies with proven business models and managements, where profits and cash flow generation is a norm, and not a distant dream.'

Richa Online

Follow Richa's videos on this YouTube playlist - Smallcap Multibaggers by Richa Agarwal.

Richa's views on smallcaps have been published in - CNBC TV18, Economic Times, ET Markets, Financial Express, Business Today, The Week, India TV, ABP News, and IIFL.

You can follow Richa on her Telegram Channel - Small Cap Fortunes - where she shares her views on smallcap ideas to create long-term wealth.

Also check out Richa's stock screener.

Richa on India's Booming Internet Economy

"I was scared of investing in smaller companies. I had been reading about it in your newsletters and decided to give it a try. I am more comfortable with your recommendations. The entire portfolio is doing very well."

- Pankaj Varma, Panchkula

When not traveling for work, or interacting with managements on Teams or Zoom calls, Richa travels for adventure.

When not 'scuttlebutting' companies for her research, she immerses herself in reading fiction.

Click here for a 30-day, risk-free trial of Richa Agarwal's Hidden Treasure.