By Suhel Khan
There is no investor who is not fascinated by how investing legends like Warren Buffett work their magic. And in India, we have our own ‘super investors’ – geniuses who have built impressive track records and solid wealth by spotting winning opportunities before the average investor does. These “Warren Buffetts of India” have a knack for understanding the market and sticking to a disciplined approach. One thing that is particularly interesting is how they often focus on specific sectors that match their long-term vision.
And the one sector you should look at now is the Software and Services sector. From innovative cloud solutions to essential digital infrastructure, this sector is booming. As per trendlyne.com, a website that tracks investments of these Warren Buffets (holdings over 1%), over 45% of its list of such investors are individually invested in this sector. India’s tech prowess is recognized globally, digital transformation is accelerating, and the demand for innovative software solutions is only increasing. Plus, many IT companies generate strong cash flow and have the potential for rapid scaling. That is a powerful combination for investors who prioritize growth and long-term value.
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Here are 2 capital efficient stocks from the favourite sector that the Warren Buffetts, that super investor Madhusudan Kela holds.
IRIS Business Services Ltd (IBSL)
With a market cap of Rs 793 cr, IBSL offers Regtech solutions to regulators and enterprises.
As a RegTech SaaS company that helps enterprises, business registers, regulators, central banks, stock exchanges, BFSI, and other organizations meet their regulatory compliance requirements through technology-driven solutions like Artificial Intelligence, Machine Learning, and Robotic Process Automation.
IBSL specialises in solutions related to compliance, data, and analytics, encompassing various aspects of the information supply chain and data reporting standards like XBRL and SDMX
IBSL’s current ROCE (Return on Capital Employed) is 27%, which is higher than the median of 18% when compared to peers in the same category. In simple terms, ROCE means the returns a company makes on the capital it employs. In the case of IBSL, the company is making a profit of Rs 27 on every hundred rupees it is investing as capital.
These profits can be used to pump back into the business to expand or pay back to investors as dividends.
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