Super Fund Manager 2024: How this multi-cap money manager finds his timing and themes to emerge triumphant

Can you tell us how they stack up in terms of contribution to your performance.

Our top five contributors to performance for the year have been Oracle, Zomato, Ashoka Buildcon, Pokarna, Kalpataru Projects , Jyoti CNC, HPCL and Fortis.

As a sectoral call, construction did very well for us as we were Overweight much before election believing capex would get front-ended ahead of election, and it paid off. Here, we had skipped the larger names, and went heavily Overweight on smaller names that were regionally or state-dependent in terms of project execution. So we avoided bad projects, and stayed with those that executed well, so our Overweight call did very well.

In financial services, our success was because we could pick smaller PSU names which matched the earnings growth of private sector, but were available at a steep discount.

There were some specific stocks where we bet big as we saw the value shifts were in our favour. We saw earnings growth momentum building up, even though the market was negating it and the stock wasn’t resonating with the market. The 'global parent' narrative emboldened us to bet on one stock that rallied for almost three weeks continuously, once it started moving.

Another big contributor was consumer services (Zomato). We were very early in identifying the turning point in terms of growth rates and the path to profitability, both in food delivery and quick commerce. Healthcare was another space where a couple of names varied significantly in terms of performance, and we bet on turnaround in one of them. When growth started to come, it was pretty sharp, leading to margin expansion and multiple expansion, and it paid off richly.

Any segments that surprised you this year?

Consumers delivered some performance, though we weren’t expecting as much. The same with IT. As for negative surprises, we had one name in the media sector where the stock was quoting realty cheap and an M&A was to come through, and it didn’t. But we moved out.

What are your top three sectoral weights right now?

Financial Services is around 21.5%, Automobile is +12%, IT is close to 10%, FMCG has close to 8% weight, and Oil and Gas has close to 8%. In terms of Overweights, Automobile is the biggest one. Media is another sector where we have a significant Overweight—Media and Entertainment, Consumer Services, and Construction.

In the quick-commerce space, are you still bullish for next year, considering competition can come in and spoil the party?

We are keeping a very sharp eye on all the developments in this space. As the sector gains traction, it’s bound to attract a lot of competition.

What’s helping the incumbents is the significant cash which they’ve built over the last 6–12 months. They’re raising money, and I don’t think it’ll be easy for anyone to displace them.

Your outlook and strategy for 2025?

Earnings next year are going to be challenging. Whenever you see pockets of earnings growth, you need to be there to capture opportunities. Because if earnings don’t come through, the multiples won’t hold. Money-making next year won’t be easy. So, you need to find opportunities with strong earnings growth. Even if multiples contract, you’ll still be able to generate returns for investors.

Overall, what is your expectation for next year in terms of performance?

I think we’ll have to fight our way to be at the top of the sector, honestly.

This will be the first year in many years where we might see slower growth, perhaps around 5%. What’s your outlook?

If you look at the numbers for FY26 as per various estimates, we’re still in the low teens. I don’t expect it to drop to single digits. I would be surprised, and negatively so, if it did. Especially after the muted growth this year, I don’t see that happening. A lot of the earnings expectations may already be priced in, but we’ll only know the full impact as company earnings start coming in.

Some money seems to be flowing into the US markets, which is leading to selling elsewhere.

On the energy side, I think oil prices should cool off a bit, which would be beneficial for India. Overall, I don’t expect smooth sailing, particularly with tariffs still a potential concern. There will likely be noise, if not significant disruptions.

If you had to call out one big risk for the coming year, what would it be?

One potential risk is that inflation could pick up again, which would affect consumption and data trends.

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