Utpal Sheth on Lessons from Dalal Street Legends: Valuation Discipline, Conviction, and the Human Factor

In a nod to the broader global reset, Sheth pointed out that various international frameworks—from the WTO to NATO—are being reshaped.

Utpal Sheth, a key lieutenant to the late Rakesh Jhunjhunwala and founder of The Trust Group, has had a ringside view of some of Dalal Street’s most influential investors—his own father Ramesh Sheth, Asit Kotecha of ASK Group, Vallabh Bhanshali and Nimish Shah from Enam, and of course, Jhunjhunwala himself. He shared timeless insights gleaned from decades of working closely with the legendary investors in an exclusive interview on The Wealth Formula with N Mahalakshmi.

One of the earliest influences for Utpal Sheth came from his father, Ramesh Sheth. “He used to talk about a concept called growth phase. He was a big believer in that—that every company goes through a growth phase. In today's lexicon, effectively, we use the word inflection point,” Sheth explained.

“When you have a growth phase or inflection point combined with a favourable mega trend and leadership attributes and intangibles, that becomes magical.”

Another key learning was around valuation discipline. “That was something I learned from all of these investors,” he said. “That discipline was most valuable when they were investing in high quality companies. Having valuation discipline when you're investing in companies which don't have that high quality is very different.”
To get such companies at a price that makes sense, he said, “there must be some temporary cloud on those companies. Otherwise, you will not get those high quality companies at that valuation. The ability to look through that temporary cloud and perceive that the high quality is sustainable beyond it—I think that was a fantastic skill set.”

Sheth also underscored the importance of conviction—something he said was particularly embodied by Rakesh Jhunjhunwala. “There may be stocks which somebody else may have identified before Rakeshji, but Rakeshji's ability to back his conviction, to thump the table and build a very meaningful position… not just because he had a larger portfolio, but also that he made it much larger as a percentage of his portfolio. He made his winners count.”

“You could see that conviction in each one of them. Whenever they talked about the companies that they believed in, their passion and excitement would be dripping.”

Asked to share a personal memory, Sheth recalled something Rakesh often told him: “We value people for who they are and not for what they have.” “Very simple,” Sheth said. “But yet profound.”
Another common trait? Their ability to read people. “Whether it is in the business world or outside, their ability to recognise the quality of people was fantastic.”

“And finally,” he added, “to be a realist and to be practical. Rakesh used to say, good business is a gain to you without a loss to me, or a gain to me without a loss to you. So he would always tell me to think win-win in whatever we did. Having that grace, having that larger heart was important. And again, that was a common characteristic in all the others that we discussed.”

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