'We may see 6.5-7 per cent growth over medium term'

Having joined Axis AMC just two years ago, Ashish Gupta has brought significant changes to the fund house's investment strategy. These reforms have led to the outperformance of several funds, which Gupta attributes to enhanced diversification - making them "more agile" and capable of "generating consistent alpha every month". In this interview, Gupta, the CIO of Axis AMC, sheds light on the reforms he has implemented to strengthen the fund house's research and risk management processes. He also outlines the strategies to sustain the strong performance of funds like Axis Bluechip, ELSS, Mid Cap, Small Cap and Growth Opportunities. Additionally, Gupta shares why he anticipates a moderate economic growth despite the recent market correction and finding quality businesses at reasonable prices. At Axis, what key changes have you made to strategy, research or risk management? I will categorise the situation into three key areas: people, processes and portfolio. One significant change was to expand and bolster the investment team. When I joined two years ago, we were four fund managers; today, we have 10 equity managers and 16 analysts, up from seven. This expansion was necessary as the Indian market has grown, and there are multiple sectors and themes to cover. Today, as an investment house, we cover nearly 450 companies, double from two years ago. By bringing in more fund managers, we ensured that a dedicated expert managed each product rather than one manager handling multiple products. This helped us reduce the overlap and similarity across funds. If you're running funds actively, having distinct funds is very difficult. Now, on average, each fund manager manages mostly two schemes. Coming to the process, we made significant changes, including introducing the model portfolio. We tightened the guardrails around our investing process. Two years ago, our portfolios were highly concentrated, with nearly 18 per cent of our total AUM in just five stocks. This was due to a high degree of commonality in stocks across various schemes, and secondly, within the schemes, the top five or 10 holdings were a large part of the AUM. To address this, we broadened our set of fund managers, each investing with the same principles and be