"If a stock is fairly valued, its liquidity allows to sell and buy back later"

We interviewed Mr Rohit Singhania, Co-Head - Equities at DSP Mutual Fund. He has been part of the AMC for almost 18 years now and is one of the better persons to help us understand the DNA of DSP's investment philosophy. The conversation helped us understand his assessment of current market conditions, and the idea behind the team's emphasis on focusing on business fundamentals, while also gaining valuable insights into the dynamic investment strategy of DSP Tax Saver Fund. The following is an edited transcript of the interview. Roughly 30 per cent of DSP Tax Saver Fund's portfolio is in mid- and small-cap stocks. Is this your market cap strategy? There is no set number in my mind. Traditionally, the fund has around 60-65 per cent allocation in large caps. But it's not that we have that as a sacrosanct number. It's got to do with my investment style, where I am okay taking short-term calls when I see pockets of opportunities. So will have a large cap bias. Unlike several other DSP funds that adopt a buy-and-hold approach, this fund exhibits a more dynamic investment strategy. We observe frequent entry, exit and reappearance of stocks within a short span. Coming to our core philosophy, we buy a company with good management and good or improving business and balance sheet. Which is what every fund manager in India likes, right? For me, the overlay is the price you are paying today - have you built in adequate margin of safety in valuation. Because, if you're buying a stock today, you're hoping the stock will appreciate over the next one to three years. There are certain points in the same sector when there are two similar businesses: one is a one-star business, and the second is

This article was originally published on July 07, 2023.