'ELSS is not just a tax saver but also wealth generator'

Overseeing a wide range of funds distinctly different from one another - from tax-saving funds to PSU funds, multi-cap funds to hybrid funds - can be daunting for any fund manager. But not so for Dhimant Kothari. It's his everyday job at Invesco Mutual Fund. When we ask him about this, he simply says that each fund's strategy is 'derived from its mandate'. Kothari then proceeds to discuss the factors influencing the performance of the Invesco India ELSS Tax Saver Fund and his approach to creating diversified portfolios in other funds. Here's an edited version of our interaction with him. What first sparked your interest in equity investing? My father used to write accounts in a traditional manner, which led me to pursue my professional degree in CA. During my internship, I realised that traditional auditing and accounting didn't excite me much. Fortunately, my internship at CRISIL sparked my interest in industrial research. In 2004, I began conducting equity research, marking a pivotal moment, as Indian equities and the economy began to flourish then. From that point on, I began to develop an interest in the operations of businesses and, subsequently, in the equity market. You've had a diverse career across organisations like CRISIL, Lotus AMC and CARE Ratings. What are some of the most valuable lessons you've picked up along the way? CRISIL and Care Ratings had the ethos of credit research. There was a financial crisis early in my career during the 2008-09 period. This experience underscored the significance of balance sheets and leverage in my investment strategy. That said, growth is equally important for me when making any decisions in the equity markets. But there is no point in growth if that comes at the cost of a balance sheet or if there is no adequate cash flow convergence. I believe that the balance sheet and cash flow should support the growth. So, leverage and leverage-related ratios play an equally important role for me, and that is what I learned at the start of my career. Can you describe your investment philosophy? What kind of stocks or market scenarios get you excited? At Invesco Mutual Fund, we have a proprietary categorisation framework under which we identify stocks based on their characteristics and link each of them to the various financial parameters. We categorise or classify businesses into leaders, high-growth companies and tu