"We are not momentum- or event-dependent portfolio managers"

Harsha Upadhyaya is the CIO-Equity at Kotak Mahindra Asset Management Company, overseeing assets worth over Rs 55,500 crore. He is the third largest active equity fund manager in India and his personality traits reflect in the performance of his funds. In a recent interview, he explained the AMC's GARP investment philosophy and how he manages his funds, some of which are under our list of recommendations. Can you help us understand the framework and the parameters you look at when constructing and managing your portfolios? Our investment philosophy is growth at a reasonable price (GARP). Our portfolios tend to tilt towards growth companies, but we are also conscious of their valuations. We are not momentum- or event-dependent portfolio managers; there's more of a buy-and-hold approach. In fact, our portfolio turnover is one of the lowest in the industry. That's because our philosophy and discipline have been the bedrock of our overall investment process. And that's what gives us an advantage while handling volatility. The investment processes are clearly defined, and every portfolio manager has to adhere to them so that even if there is a change in any of the investment team composition, our investors should not see a different investment approach being followed. The focus remains on three parameters while picking stocks: Business, management and valuations. We look at a company's business performance and its position in the industry. We also examine its scalability, sustainability and whether it has a strong competitive advantage. In addition, we study which factors that drive growth and profitability in that particular business. Secondly, we check the promoters' vision and if their interests align with the minority shareholders. We try to understand their thoughts on capital allocation decisions. Because if these decisions are suboptimal, then ov

This article was originally published on April 03, 2023.