Would you call it an interview or chat over coffee? The verdict is still not out on that. However, one thing is certain that Viral has a knack of making the interviewers feel at ease with his friendly personality. Since Viral has worked with insurance company and fund house, he has tasted both the worlds - capital preservation and capital building through investment.
His journey so far…
Viral’s first brush with stock market came in the 90’s while assisting his retired grandfather with equity investments. Viral grew interested in the stock analysis. Around that time, he was working with TCS in an IT & consulting role. His budding interest in investing motivated him to move to a finance profile.
Narrating his journey so far Viral smiles and mentions, “It’s a funny coincidence but so far every 4-5 years, there has been a change in my profile.” After TCS, his next role was as an assistant fund manager at Reliance Nippon Life AMC analysing IT, oil & gas, real estate and retail sectors. Post that, he joined Reliance Nippon Life Insurance as CIO before moving to Essel Finance AMC as a CIO. He believes these moves have deepened his understanding of market and helped him develop a holistic view towards investing.
What does Viral bring to the table?
Viral focusses on two key aspects:
Team building
- He is in the process of strengthening the research team to build expertise as a data backed AMC
Fine-tuning the portfolio
Viral has been refining the existing portfolio with the aim of
- Diversifying holdings
- Making it in line with SEBI rules on scheme re-categorisation
- Boosting performance by taking up to 15% tactical allocations
Investment style
A self-professed growth investor, Viral prefers investing in reasonably valued stocks having long-term growth potential. India is one of the fastest growing economies with GDP growth of around 7% and inflation around 4%. In such a scenario, having a growth-oriented approach would help you reach your target returns sooner, opines Viral. He believes that with the initial pain on implementation of major structural reforms like GST and demonetisation behind us, the growth benefits are likely to seep into the economy.
Stock selection
The core principle driving investment decision is “Increase in profitability translates into increase in share price.” Thus, profitability evaluation is the primary step on which the stock stock-selection process rests. Let us briefly look at their stock selection process.
Step 1: Category selection: Is based on growth potential and profitability
Step 2: Category evaluation: Involves understanding the competitive advantage and market share enjoyed by the companies in the category
Step 3: Stock selection: Involves evaluating which investments would yield more value – investing in market leader or investing in second or third ranked company in the category.
Stock exits
Viral does not condone taking exit decisions based solely on valuations. Though he does not recommend staying invested at illogical levels, he believes the right time to exit is when the investment rationale has been violated i.e. the company’s long term growth trajectory is not in line with your expectations.
Equity market view
He believes that equity markets are likely to be volatile on back of global headwinds and upcoming general elections. However, market will offer investment opportunities, as valuations are expected to converge towards mean.
On corporate earnings growth, markets are likely to see it in FY 2019-20. However, recent market rally is despite less earnings growth. Going forward, we will have good earnings growth but lenient rally.
Bullish sectors
|
Sector |
Rationale |
|
Auto & Auto Ancillaries |
|
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Private Banks |
|
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Insurance |
|
|
Consumer Goods |
|
|
Capital Goods |
|
Neutral sector
|
Sector |
Rationale |
|
IT & Software |
|
Wait and watch sector
|
Sector |
Rationale |
|
Pharmaceuticals |
|
Getting to know Viral
An avid reader, Viral’s face lights up when he talks about books. Here are a few books from Viral’s library:
- On business: The Outsiders: Eight Unconventional CEOs and Their Radically Rational Blueprint for Success by William N. Thorndike
- On life: Man's Search For Meaning: The classic tribute to hope from the Holocaust by Viktor E Frankl
- On life: When Breath Becomes Air by Paul Kalanithi
- Our favourite cricket heroes: The Test of My Life: From Cricket to Cancer and Back by Yuvraj Singh
- On our heroes: India’s Most Fearless: True Stories of Modern Military Heroes by by Shiv Aroor and Rahul Singh
He believes that there is a lot to be learnt from different walks of life, lessons which can be applied while investing. So, on this note we close this interview and grab a book from Viral’s recommended List.
