'I'm slightly more tilted towards value. That doesn't mean I'm agnostic to quality and growth'

Abhishek Singh, fund manager at DSP Mutual Fund, oversees the equity portions of three hybrid funds - Arbitrage, Equity Savings and Regular Savings Fund - and manages AMC's large-cap offering - DSP Top 100. In March 2024, he took over the reins of AMC's aggressive hybrid offering, DSP Equity & Bond, one of our recommended funds, which prompted us to speak with him. In this interaction, he discusses the portfolio changes in the pipeline and provides insight into some of the finer aspects of his investment style. Your portfolios may not have consistent growth or quality but a consistent value bias. How do you assess whether the 'value' in your stock picks is not a value trap? Typically, when people think of value, they think of statistical value such as low price-to-book (P/B) and price-to-earnings (P/E). When we think of value, we don't think of statistical value. We refer to the difference between the intrinsic value based on conservative assumptions and market price. Suppose a company's intrinsic value is Rs 100, and the stock is trading at Rs 80. Then Rs 20 is the value that you want to capture. That is what we mean by value. Some stocks could be valued at 30 times P/E, and some stocks may not be valued even at 5 times P/E because their ROIC is negative or cash generation is

This article was originally published on April 10, 2024.