Interview with Chirag Dagli, Vice President, Equity | DSP Mutual Funds | Healthcare

Radhakrishnan Chonat: Dear listeners, today I have the distinct pleasure of hosting a seasoned professional and a distinguished name in the world of finance, Mr. Chirag Dagli, who currently serves as the Vice President in the equity team at the DSP Mutual Fund. 

Now, with a rich career spanning over two decades, Chirag brings a wealth of experience and expertise to the table. Chirag’s impressive professional journey spans stints at HDFC AMC, Aviva Life, ICICI Securities and more. His role as the fund manager for the healthcare fund at DSP Mutual Fund reflects his deep understanding of the pharma and healthcare sectors, both in India and internationally. As a chartered accountant with a bachelor’s degree in commerce, I’m sure Chirag’s analytical prowess and financial acumen shine through in his investment philosophy.

Chirag’s commitment to his craft is evident in his focus on generating positive returns while actively avoiding potential pitfalls in the portfolio, and I’m looking forward to explore more of his thought process. His keen eye for identifying companies with favorable ROIC, EBITDA growth and strong operating cash flow showcases a well-rounded investment strategy. 

So my dear listeners, join us for an enlightening conversation as we dive into Chirag’s insights on the healthcare sector, his investment philosophy, and the unique challenges and opportunities of managing a thematic fund.

So Chirag, welcome to the Fund Manager Series of AlphaStreet. 

Chirag Dagli: Thank you so much. Thank you for having me.

Radhakrishnan Chonat: Excellent. Chirag, before we get into the thematic fund, we would like to know your journey. You are a rank holder CA, so walk us through your journey so far and any highlights that you look for.

Chirag Dagli: So nothing fancy really. Very simple, born and brought up in Mumbai, did my chartered accountancy along with my bachelor’s in commerce and became a chartered accountant very early on. I was always passionate about the equity markets, investment banking as it is called. At that time, it used to be one of the — back in 2001, it used to be one of the very premium paying jobs. So I didn’t know much about investment banking, but the thought was that this pays well, looks like very close to equities, so this is what I want to do. 

Fortunate enough to get a job just after my qualification as a chartered accountant with ICICI Securities. Started there, spent about a year in credit and risk management, and then thereafter, got into equity research at ICICI Securities.

Thereafter, for the next decade or so, it has been at ICICI, Citi, a couple of other places, smaller, shorter stints, but largely with ICICI and Citi through their research desks — equity research desks and then thereafter, after a decade or so of sell side, went on to join the buy side at HDFC Mutual Fund, spent about eight years there and then thereafter last three years at DSP. 

So broadly, half and half in buy and — buy side and sell side, and nothing fascinating in terms of the journey itself. It has been a very boring journey in some sense. So that’s broadly — yeah.

Radhakrishnan Chonat: Interesting. You’re being humble. So let me ask you the big difference that you felt between being part of the sell side versus the buy side.

Chirag Dagli: So I think the buy side teaches you a lot in terms of, it tells you every day that where you are wrong and where you are right. Right? More often than not, you go wrong. In a sense, every decision you take will test you whether you are right. You’ll be right today, you’ll be wrong tomorrow, you’ll be right day after, and then you’ll be wrong again. Right? So the buy side teaches you a lot of humility. On the sell side, while a lot of what you do in terms of analytics and in terms of how we analyze companies, what you look at and so on and so forth, that remains, that is very individual — that is who I am as an investor. Right? That doesn’t change whether I’m at the buy side or at the sell side. 

But the buy side, it — you evaluate each and every decision that you take, whereas on the sell side, you — I mean, you broadly are known for a few names and you dwell in that a lot more. So sell side is a lot about fewer names, lot more depth. Buy side is a lot about very, very broad coverage and depth, nevertheless. But on the buy side, there’s a lot of help available as well, because a lot of sell side is helping you. So that also is there. That is a little bit different. But otherwise, as who you are, doesn’t change. How you do some of these things will be tweaked a bit here and there, but at core, who you are, that doesn’t change whether you are at the buy side or at the sell side. 

And that’s very important for an investor to figure out, because in the market, everything goes up, things go down, all sorts of things are happening, right? This is a market of day traders, investors who invest for five years, investors who invest for decades, investors who invest for multiple years, and the market is formed by all of these guys, right, and many more. So you have to identify who you are and then thereafter — then things start to fall in place. So I think it’s very important, that doesn’t change whether you’re at the buy side or at the sell side.

Radhakrishnan Chonat: Very interesting insight. So one of the things, Chirag, I was reading your profile. So you emphasize buying businesses below their intrinsic value. Now, how do you balance this approach? In this — as we mentioned, very dynamic and often unpredictable sector that you are part of, healthcare sector. So what are the things that you keep in mind? 

Chirag Dagli: So I think the conquest of intrinsic value, right, that we are all at, it is in some sense trying to keep looking at businesses in a different way. And it’s a very dynamic analysis, as you rightly pointed out. In every market context, in every context of what’s going on otherwise in the world, that value — that intrinsic value in some sense will change, right? And not a whole lot, but some bit for sure, right? 

And you have ranges in your mind and you try and triangulate where — see, you are looking for the obvious ones, right? You’re not looking for a 5%, 10%, 20% trade. You are looking for the obvious ones which are just sitting out there, right? If I were to give an example, think of it, even a lay investor can do this, provided you have competence on that industry or whichever way, right? 

Let’s say, just for the sake of example, you’re a –if you’re a trader in the steel market, right, and you have some sense of what it costs to manufacture a million tons of steel, right? You will have some sense and you have some understanding of the market and so on and so forth. This is probably your family business. You understand the steel business. You have some sense of what it costs to make — start manufacturing a million tons of steel. Now there you have an asset in the secondary market, which probably manufactures a million tons of steel. And you are likely that you are involved with that company, you’ve sold their volumes in the market and so on and so forth. You have an extreme sense of understanding that this is what it takes to manufacture to build this business, right? A concept we call replacement cost. Right? 

Now, during a down cycle in steel, when the whole market is worried about what’s going to happen to China, what’s going to happen in the next quarter, what’s going to happen tomorrow, day after, what’s happening in Russia, markets are concerned about all of those things and more, right? Now, you, on the other hand, are sitting somewhere in some part of the world, but you know that it costs so much. And if you’re able to get a steel company with everything else that ticks the boxes, but you are able to get that at half the replacement cost, there you are, right? That’s where your intrinsic value is. You know that it is going to cost me, let’s say for the sake of argument, 100 to build this asset today. And I’m getting some other listed company at, let’s say, 50, right? Then I know that this is the intrinsic value.

You don’t even need to do a lot of stuff. You are staying within your circle of competence. You don’t need to go out and you don’t need to be right every day. That’s going to be your trade of the year, right? Or trade of whatever years to come. Because, make no mistake, the market will gravitate from a 50. When the cycle goes up, the market will say, anyway, it costs 100 to build this factory, let me — the fair value of that price is probably 200. So you made 4 times the money. And by staying in your circle of competence and not moving out of your circle of competence.

That’s what we are trying to do, that we are trying to stay within our circle of competence. Look at various ways of analyzing business and earnings analysis, book value analysis, 360-degree feedback in terms of vendors, channels, suppliers, all of that is the usual process. And we can — we will complicate it a lot, right? Because we do this for a living, so I want to give a lot of color around that. We do a very, very complicated job, but at heart, really, it is as simple as the example that I just gave.

Stay within your circle of competence, keep increasing gradually, expanding that circle of competence and look for intrinsic value. And you’re looking for the obvious ones. You’re not looking for 5%, 10%, 20%. If you start looking for the obvious ones, they will flow at you. You will be a little worried to buy them, that’s a different point. That’s a more temperamental issue, but it’ll flow to you, when you’re looking for that. That’s how at least we think of it. That’s how at least we evaluate — at least I evaluate businesses and try and triangulate it with everything else, right? There’s a whole list of things that we do: price to earnings, EV/EBITDA, price to sales, takeout values, all of those things, analysis of the financials, all of those things we do. But at heart, this is what it is. 

Radhakrishnan Chonat: Very interesting. You mentioned circle of competence, and I was looking at — I’m trying to figure out what is your criteria for stock selection because the healthcare fund has a broad spectrum. You have pharma companies, you have diagnostics, you have hospitals, you have CDMOs. So with such a diverse subsector within the pharma, how do you navigate and make sure that you’re picking from within the circle of competence? So, any insights on that? 

Chirag Dagli: So on healthcare, very clearly, you have to build competence. See, the sector has these multiple subsectors, right? Very, very different drivers for each of those. And we look at each of those very, very differently, right? And we keep asking ourselves that I have INR100 to allocate in healthcare. Is hospitals today going to be larger than diagnostics? Is diagnostics today going to be larger than exporters? Is that going to be larger than India? And so on and so forth. The benchmark also plays a little bit of a role here. 

But you have to improve your understanding of these businesses, and that evolves every day. Just because I’ve covered the sector for two decades does not mean that I won’t learn anything, right? Because every day, new companies are coming, every day, new businesses are evolving. Businesses that did not exist 5 years, 7 years, 10 years back are now coming up for listing, right? They are tapping the public markets. So you have to keep understanding, evaluating all of these businesses. 

In terms of this sub-segmental weight of how we kind of manage, see, I think we have some ballpark numbers in our minds. For example, diagnostics is a relatively small-ish sector, so it can’t have a 25% weight in the portfolio. Hospitals, on the other hand, is a large-ish sector. It will have more weight when you look at the overall portfolio. So that’s how we think about it. 

Then, within diagnostics, you try and look at which are the better businesses at similar valuations between the two, which one will you buy. And I’ll give you a simple example of how we differentiate between hospitals and between diagnostic companies, right? Two hospitals, both trading at similar multiples as far as EV/EBITDA multiples, or whichever other multiple that the market broadly looks at, right? In case of hospitals, markets, look at EV/EBITDA multiples. 

Two hospitals, very similar EV/EBITDA multiples that they’re trading at. How do we differentiate between the two? One has an occupancy of 78%. Another one has an occupancy of 64%. Right? 78 is a very, very high number. Generally, hospitals peak at 80%, right, occupancy. So you know that this company is likely punching above its weight in terms of occupancy. The other one, on the other hand, probably has some scope to go from 65% to probably a 75% kind of a number. It is very likely that the one with 78% occupancy has very high margins as well. So his margins are above, his earnings are above, he’s very, very close to his peak potential in some sense, right, whereas the other one is not so much closer to its peak potential.

So in my mind, I am thinking between similar multiples — at similar multiples between the two businesses, I think the one with 65% occupancy probably has a slightly longer runway to grow versus the one at 78%. So that’s one.

The other one is, let’s say, two diagnostic companies, one pathology company — one pathology-only company; another one, a mix of radiology and pathology, right? And lot of disruption happening in pathology with the online players, etc. The ROIC of pathology is very, very high and the entry barriers are next to nothing, right? So you realize that pathology as a business is far more prone to disruption, and that disruption is happening. Radiology on the other hand is probably not as much prone to disruption. 

So between the two, at similar multiples, in my mind, I’m thinking, let me buy a business which is actually less disruptible than the one which is more disruptible. But the multiple what I’m paying for is very, very similar. So can — which one will grow faster and which one is less disruptible is the one that I will want to buy. That’s how we kind of differentiate and then own a specific percentage of our portfolio in these businesses. 

Radhakrishnan Chonat: Excellent insight. So you mentioned moats [Phonetic]. So one of the things that I saw that you have — your fund has a mandate of about 25% allocation to global stocks. And without getting into names, I saw that’s an interesting mix of your global allocation with huge moats, Da Vinci robotic companies and stuff. So that I felt was very interesting. So how do you identify such opportunities in the international markets? And within healthcare space, you mentioned there is lot of innovation happening, companies that were not even in your radar two years ago are suddenly surfacing. So how do you keep up? And what’s the thought process behind the international exposure, which is very unique to this fund? 

Chirag Dagli: Good you brought that up. So, look, I think what are we trying to do in international, right? We’re trying to basically solve for a problem. Which is that problem? Problem is that as an Indian, as a healthcare customer, I am consuming some services, right? But I am not able to invest in those services because these are largely businesses that have been built by multinationals, right? And what are those buckets? Those are buckets like medical equipment, genomic research. We are far behind. As Indians, we are far behind in those newer technologies, if one were to say.

So, that is the problem statement, that as an Indian, you, me, we are all consuming these services. Increasingly we are going to do more robotic surgeries, increasingly we are going to do a lot more implants. We are going to be open to some of those things. Their share in the healthcare wallet of the consumer is going to keep increasing. But I have no way of playing those themes if I restrict myself to investing only in India.

So how do you solve for that? You basically go out. That’s the very simple point. The idea is not to go out and buy every or any healthcare company globally or something that is [Indecipherable], let me go and buy. That’s not the idea. The idea is very simple. Something that’s adding to India’s healthcare GDP, but I am not getting a slice of that, how do I participate? So that’s one way.

The other is that there are select segments, like medical equipment, genomics, where India just does not have a play. That’s not going to change. Not today, not tomorrow, not probably three, four years down the line either. Right? So even if there are some segments where Indian businesses are available, that one, two asset which is available has a lot of scarcity premium because they are attuned to one theme, which is a very big theme, and markets are pricing those very few assets in India up, whereas in the global market, if you see, these are far more mature, deep markets. Those — that scarcity premium does not exist. 

So we can actually buy better quality businesses at cheaper multiples attuned to the same long-term big theme that we want to kind of buy in. Right? Biologics is one of the examples. There are multiple players globally available on them, just very, very few in India. So that’s how we kind of think of trying to solve for problems. As an Indian investor, while I want to benefit from that theme, I want to buy better businesses at better prices. Right? So that’s the other bit. 

The one common theme that you see across all our international names is that, look, we are sitting miles — thousands of miles away from the main markets of these. Right? So a lot of ideas come to us from our own companies. These are companies who are using these services, right? You use — you talk to a user of a robot, you talk to a user of a — to a doctor, to a hospital. That feedback loop is very critical for us because we talk to the customers of these multinationals and we have a sense, and then you go back and do a lot more work around that and so on and so forth.

 But the most important piece is that all of our international assets have a typical razor and blade business model, right? They are platform companies. They are– they sell the machines. They sell the machines cheap. They don’t want to make money on the machines. They do make some money, but that’s not the part of the core business. The core business is the consumables that are used on those machines. Right? Very typical razor and blade. Once I sell you a razor, I know that this customer is going to keep coming back to me for my blades, because if he has to use these razors, he has to keep coming back to me, right? 

All of our companies in the international bucket, or most of the companies in the international bucket, fall in that category where they are platform companies, they sell the machines, but 80% of the business is sustainable, recurring, keep coming — the repeat customer keeps coming back to me because I’ve sold him the machine. Now that customer is mine for life, right? Or whatever, 10 years, till the life of the machine. 

So that’s a very important trait that we look for, because that creates sustainability of the business. And we appreciate that we are miles away from the main markets of these businesses. And to that extent, we’re looking for a little more stability, like Warren Buffett says, right? Rule number one, don’t lose money. Right? So we don’t want to take undue risk on the business. We’ll do all the channel checks. We’ll do all of those. But still, when you have this razor and blade business model, it is likely that these businesses will be far more sustainable than some other business where you need to do a lot more channel checks to stay ahead of the curve. Sorry, it’s a slightly longer answer, but… 

Radhakrishnan Chonat: No, no, no. These are the insights that we are looking for, the thought process behind and how do you connect. So let’s say, you have a hospital in your portfolio, you talk to them — talk to the doctors and they are very happy with a particular robot, and then you figure out which is the company that is manufacturing and then you — so that’s an excellent approach. 

Sticking to the global theme, see, regulatory challenges with regards to the majority of your portfolio, generic APIs, export formulations, you’ll never know when an FDA notice will come and for no reason the stock will fall. So one, how do you sit through such volatility? And two, how do you manage risk with regards to that? 

Chirag Dagli: Sure. Two, I think, very, very important questions. If you see, the only way that you can manage the FDA risk is to diversify. Right? It’s something that you cannot manage. And we do a lot of channel checks. We meet a lot of people who give us comfort around companies, their specific processes that they have, the kind of quality of people that they have, and so on and so forth. But many, many of these have gone wrong over a long period of time. Right? And now I realize that it’s very difficult to forecast some of these things.

So it’s one of those high-impact, low-probability events. We don’t know when it will hit us. So now, do I get scared by that, is the question. Answer is no. So, two points there. One is companies themselves are aware of this because promoters own a lot more of their company, they also realize that this is far more. So Indian companies have now learned to diversify this risk. A lot of their important products, they’ll file from multiple facilities and so on and so forth, the concept we call derisking, right, in some sense. It may not work always, but if it works for a large part of your large pipeline, then you are home. So that’s first point.

But nevertheless, whenever news flow comes on regulatory aspects, etc., it creates a volatility as far as the stock price is concerned. Right? 

Radhakrishnan Chonat: Correct. 

Chirag Dagli: So as a fund manager of my healthcare portfolio, the hope is that not all of our companies will go through a bad FDA inspection at the same point in time. Right? You’re basically diversifying their risk away. So that’s the other way. If I see history, by and large, FDA inspections have actually thrown up more opportunities because invariably on the day of that FDA news, etc., etc., markets have likely overreacted.

Radhakrishnan Chonat: True.

Chirag Dagli: Right? So it’s very important to ask yourself, what am I paying for this company and what am I getting in return. Right? And goes back to my earlier point of intrinsic value, that you have in your mind, an intrinsic value of this company, which is a range, which is not an exact number. It is a range and it can vary 10%, 15% here and there. You can’t be very precise about these things, but you have some sense. And again, like I’m saying, you’re looking for outliers, right? You’re looking for the big hits. 

And we’ve seen that FDA news flow throws some of those opportunities, right? Because there is news  flow, because the stock will be volatile, it has thrown opportunities, provided you know the intrinsic value of what you’re buying, the company that you’re buying. Right? If that happens — and I’ll give you an example, I’m sure a lot of my industry colleagues do this, but nevertheless, let me spend a minute on this one.

Let’s say there’s a company which is an exporter and an India business as well, and there’s an FDA warning or whatever, some action on their exports business and which is a question mark on their exports business. But the stock price reaction is such that the market capitalization is justified by only the India business, right? It’s a very simple thing and you’ll be able to see that, right? As a lay investor, you will be able to see that. Look, what I’m paying for is just the value of the India business. The exports business is anyway free. The factories are there today going through some FDA regulation, whatever issue, but at some point, they’ll come back. If they don’t come back, the promoters will stop this business, right, and get some salvage value out of the business. 

What am I paying for this? Nothing, right? I’m paying nothing for the exports business. But there is some value of that export business. Let the market — if I’m willing to see through the noise, right, then I can make money. The benefit of a healthcare fund is that I can size myself, right? I don’t need to take disproportionate risk. I will size myself accordingly. And then I have multiple portfolios. Things may sometimes go right, sometimes wrong. As long as you diversify, life is broadly okay, which is one of the reasons also, we recommend that people don’t take pharma exposure, direct stocks or whichever way, probably through an active healthcare scheme, because that diversifies the FDA risk completely. 

Radhakrishnan Chonat: Very, very interesting. Sort of shifting gears. Looking ahead as well as looking back, healthcare was in focus three years ago at the peak of COVID. You probably were in a unique position to understand what’s happening around companies. So one, looking back, what has been your experience, one, going through such a pandemic, at the same time having to figure out which are the good investing opportunities? Second, looking ahead, what are your views on the future growth prospects for healthcare sector in general in India as well as globally? 

Chirag Dagli: Okay, so looking back, I think COVID came and COVID went, right? By and large, the business has had some impact. COVID business has had some benefit on some of the companies, right? There were some supplies where, for a few quarters, people did for a couple of products, etc. By and large, if you look at the sector itself, right, when you look at the overall industry, did the industry benefit a lot from — did the listed companies benefit a lot from COVID-related business? The answer is no, right? A lot of money was made in vaccines where we don’t have a listed play, really. A lot of money was made by the smaller hospitals. Again, we don’t have too much to play over there. 

So by and large, COVID came and went as far as the business itself is concerned. The business itself doesn’t have too many cycles, right? In a sense, if you look at basic healthcare, earnings have compounded — the index itself, the earnings have compounded at about 12%, 13% over the last decade. That trajectory doesn’t seem to be changing. That trajectory remains. You may have a couple of years’ high growth, couple of years’ small growth, but by and large, that trajectory keeps moving up if you ignore the noises in between. 

So that trajectory did not change much in COVID, barring a couple of companies which made some money, right, which had some unique things for COVID that came and that went away, right? But the equity markets have their own cycles, right? Sometimes they may like pharma, sometimes they may like infrastructure, sometimes they may like real estate, other times they may like banks. And they will look at, okay, now pharma will do well, let’s fund pharma out of banks. Oh, now industrials will do well, let’s fund industrial out of pharma, and so on and so forth. 

So equity markets have their own cycles, but the business itself, outside of the US generic business, which is roughly, give or take, 20% of business exposure for DSP Healthcare Fund, there’s nothing which is cyclical in the business per se. And each of the sub-segments, whether it is hospitals, pathology labs, exports, India formulations, APIs, CDMO, all of these have scope to grow early double-digit kind of growth. So that prognosis remains and has remained.

Markets have their own cycles. We did not — I mean, healthcare as a sector did not do well in the first half of calendar year ‘23. Probably for nine months of calendar year ‘23, we did not do well, and then caught up and then now again back in favor. So capital markets have their own cycle, which is fine, but the business itself does not have much of cyclicality. 

The only aspect which is cyclical in the entire business, like I spoke about, was the US generic business. That business over the last two, three quarters has seen a bit of an uptick after probably 12, 13 quarters of weak-ish growth. Last three quarters have been good. This is on the back of pipeline launches and so on and so forth. Likely that this continues for the next couple of years, at least a year for sure. Thereafter we’ll see.

So this is a cycle, but it’s only about 20% of the portfolio, is how we kind of think of when we think of the overall healthcare sector. 

Radhakrishnan Chonat: Okay. If I were to ask you sort of a wish list that you have, sticking to the healthcare theme, one of the things that — and I think everyone is aware of is the insurance penetration. Health insurance penetration is pretty low in India. So if I were to ask you sort of, what is your ideal wish list that you would like to see healthcare in general in India, what would it be?

Chirag Dagli: Yeah. I think improving access, very, very clearly. We are a poor country, large part of the country is poor. So improving healthcare access definitely is one of the aspects. Insurance is one of the ways of improving that access. At least you’re solving for paying capacity, right? But all the same, there also needs to be capacity building in healthcare, good quality beds. Today, those are available to people like you and me, but not to a large part of the society. When we look at 130 crore population, 140 crore population, to a large part of that, some of these services are not available.

So clearly that improvement of infrastructure, healthcare infrastructure, is something which is where we have miles to go. We have a long, long — we have a lot of work to do on that aspect, right, a lot of work. So that’s clearly something that wherever — whenever we start, there’s just so much to do, we’ll have to keep improving and so on. So that’s one aspect. 

The other aspect is that even today, I think for a lot of — for us versus the developed world, a lot of their outpatient services are still — are paid by insurance, whereas in India, outpatient is still paid by self-pay, in some sense.

Radhakrishnan Chonat: Right, right, right.

Chirag Dagli: So that is another one which can potentially improve outcomes. If you’re able to solve for these OPD services being provided either by insurance or some other way, that can also go a long way. There are some models that are under works, but still very early nascent stages as far as that work is concerned.

But these are the two very important aspects: increasing healthcare access and that includes everything, right? Increasing the number of doctors, availability of doctors in the smaller towns, availability of better healthcare services in these smaller towns, all of those things. We have a long, long way to go there.

Radhakrishnan Chonat: Right. So Chirag, sort of to wrap up, we spoke at length about your fund, about the healthcare sector. But apart from obviously tracking all these companies, doing channel checks, doing research and all that stuff, how do you spend your off time? Let me put it that way. What are your hobbies and how do you chill out? 

Chirag Dagli: So, chilling out — I mean, I like to travel, spend time with family, travel with my family. That’s one of the important things. Apart from that, watching movies, I used to read a lot, but over the years, non-work-related reading has come down because there’s just so much reading to do, work-related. And over time, I just feel that if I were to read a book within that time, I could probably read a couple of annual reports. And guess which one gives me better — I don’t know, probably reading annual reports. So that is the — I mean, it’s a bit of a challenge. I know it’s not right, but at least the kind of phase that I’m in today, a lot more reading at least is related to work. And hobbies are broadly still travel and watching movies.

I try to visit new places, meet new people. At least you get to learn so much from the people you meet. And those could be village people, city people, tribals, I mean, the way they live, the way they — there’s just so much to learn from people’s lives because they’ve spent years doing that. And you can see the benefits of if they follow a particular thing for a very long time, that consistency delivers something excellent. So there’s so much to learn when you travel, when you see — meet people from different cultures, how they do different things, how they do things very differently. So, yeah, I mean, I spend most of my — either — if I’m not working, then I’m either with family or traveling. 

Radhakrishnan Chonat: Excellent. Excellent. So, Chirag, you sort of pre-empted my last question that I always ask: recommend books. Since you said it’s all work related, let me frame it this way. If — for my listeners, this is, if they are interested in the healthcare theme, what are some of the 101 or primers that are there? Any books to get an understanding, or if not, within the annual reports, which three annual reports would you recommend reading to get an idea or lay of the land? 

Chirag Dagli: Sure. I think you should read annual reports. That helps a lot of context. And most of the leading pharma companies, whether it is a Sun or a Cipla, Lupin, Dr. Reddy’s, they have very, very good annual reports around, at least, pharma as a business. Apollo Hospital has a very, very good coverage around — about the hospital, about healthcare. So, yeah, these are the two businesses that you probably want to understand a lot more. Pathology business is relatively simpler. I mean, you can go through annual reports, but the business itself is something that you would probably understand easier. 

But I think some of these companies, their annual reports have a lot of information about what are the basics of the business, the broad numbers in terms of market opportunity and so on and so forth.

Radhakrishnan Chonat: Excellent, excellent. Chirag, it’s been an absolute pleasure catching up with you, getting your insights, figuring out how you evaluate companies, especially related to the pharma. Look forward to more such interactions with you, and thanks a lot for sharing those insights. 

Chirag Dagli: Thank you so much. Thank you so much for hosting me. Have a good day. 

Radhakrishnan Chonat: You too.