What's Common Between InfoEdge, Shaily Engineering and This Smallcap Market Leader?

The global business landscape is full of stories that create lasting impressions and become famous case studies.

Southwest Airlines is one such case.

Let's travel back to the US airline industry in the 1970s. It was brutal - cutthroat competition leading to thin margins - companies desperately trying to out-frill each other with fancy lounges, meals, and perks that cost more than they brought in.

And then entered a small airline in the arena with a very unconventional approach:

What if we stop trying to look like everyone else? What if we simply fly more often, faster, cheaper and focus on what people truly value?

So, they threw out the frills.

No elaborate lounges. No fancy meals. No confusing seat classes. Just quick, convenient, affordable flying.

In an industry obsessed with hubs, Southwest quietly built a point-to-point network across mid-sized cities that bigger airlines didn't care about.

The result?

Shorter flights. Happier passengers. Lower costs. And a brand-new market of people who had never flown before - car travellers who suddenly realised a travel could be at the speed of a plane, and at the price of a car.

Southwest didn't just take market share. It created a new market.

And that is the heart of what makes great companies great: They don't fight in crowded red oceans. They sail into blue ones.

When we investors hear "blue ocean," we often think of flashy startups - the Olas, Zomatos, Airbnbs of the world.

Brilliant ideas, yes. But most of these are powered by deep-pocketed venture capital and often miles away from sustainable profitability. Very few companies manage to create a blue ocean without burning billions.

And this is where something fascinating comes in to play, It's something I've spent years tracking.

Optionality

Optionality is the tiny seeds that companies plant quietly which sometimes grow into giant value engines.

Optionality is tricky. You can't forecast it on spreadsheets. You can't model the upside at the beginning.

But when it works, the payoff is non-linear - the kind that turns good companies into extraordinary ones.

Take InfoEdge.

Its core Naukri business was already strong. Yet it backed platforms like Zomato and Policybazaar long before the market understood their potential. Those optionality bets created massive value as these entities got listed.

Or take one of my favourite recent examples - Shaily Engineering.

A few years ago, it was best known as a reliable plastic components manufacturer with Ikea as its anchor customer. A comfortable place to be... but not extraordinary.

Then came its bold, high-gestation bet: Drug delivery devices for global pharma companies.

This was a regulated field, needing complex and precision engineering and a long gestation period. Exactly the kind of optionality that tests management conviction.

Today, that "drag" has become the company's growth engine - powering its work in GLP-1 therapies, insulin delivery, migraine treatments, and more. In some of these, Shaily is the exclusive device supplier.

As markets woke up to this shift, the stock re-rated sharply. Healthcare is now on track to contribute half of the company's revenue in the next three years. A classic optionality story unfolding in front of us.

So, where else is this happening? Which listed Indian companies are quietly planting seeds that could change their future?

One name jumps out immediately...

Sanghvi Movers - Asia's largest and world's fifth largest crane rental company. It's deeply entrenched in sectors like wind energy, infra, cement, power, mining, infra, and construction.

The company is financially disciplined with net debt to equity at 0.36 and return ratios at 16%+. Its stock price is at a price to earnings multiple of 18.

But the real story is happening outside India.

The company has begun expanding into Saudi Arabia - a market where over US$ 2 trillion of construction, giga-projects, mining, utilities, and global events are planned under Vision 2030.

It's an underserved market. High demand. Huge scale. Sanghvi wants to become one of the top three players over the next five years.

Will it involve upfront investments and gestation? Yes.

Will returns dip temporarily? Possibly.

But if this optionality plays out, Sanghvi could unlock a new growth curve - just like InfoEdge did with Zomato and Shaily did with healthcare.

And that's what makes optionality so irresistible - affordable risks, disproportionate pay off in case it plays out well, and a chance to rewrite a company's destiny.

In the coming days, I'll share more about the optionality-driven opportunities I'm tracking - including one that I believe is being massively underestimated by the market right now.

Until then, keep your mind open, because the biggest wealth creators rarely look like winners while they are just starting out on the path to optionalities.

Please note that no stock view is implied through this article. It is purely for information and educational purposes.

Happy investing.

Warm regards,


Richa Agarwal
Editor and Research Analyst, Hidden Treasure
Equitymaster Research Private Limited (formerly Equitymaster Agora Research Private Limited) (Research Analyst)