Women’s day: How a simple newspaper reading habit led Shibani Kurian down the fund management path

An avid reader, Kurian shares that books and music are her childhood memories that she carries even today. But it was Kurian’s habit of reading business dailies that attracted her towards economics.

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“When you are a good student in school, you are expected to take up science as subjects in 11th and 12th. However, my parents, especially my father, would insist that me and my younger brother read business papers. I felt then that I was more suited for a career in economics and hence, I chose subjects, which included economics, mathematics, commerce and accounts,” she recalls.

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Kurian graduated with a B.Sc. Honors in economics from St. Xavier’s College in Kolkata and later during her MBA, she was exposed to different aspects of finance such as equity research, investment banking, financial management and accounting. “Though the bent of my mind was always finance, my MBA days helped sharpen it out and focus specifically on a career in equity research. So when I got placed from campus in UTI Mutual Fund in 2000, I started as an equity researcher,” Kurian said.

Road to fund management
Kurian started off her career at UTI MF, where she spent around six years as a banking analyst. She then moved for a year-and-a-half, to a firm called Dawnay Day AV Financial Services, which was a UK-based wealth management firm in India.

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Post that, in November 2007, she joined Kotak Mutual Fund, as a banking analyst and economist. Within the Kotak framework, the initial part was as an analyst, tracking banks. Later, Kurian also started tracking the technology sector. In September 2015, she took over as Head of Equity Research and eventually became a fund manager.

At present, she manages five equity schemes and heads the equity research team consisting of 16 analysts.

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Kurian shares that she has never felt that Indian fund management is dominated by men.

Her grandfather gave her a key advice when she was choosing between economics and science as subjects in school. “He told me that whatever I do, I have to do it to the best of my abilities. This is something that I have always carried with me. It didn't matter whether there were more men or women, I just wanted to excel in my chosen field,” Kurian said.

Cash is reality
After more than 20 years of professional experience, Kurian follows one investment mantra religiously – When you're analysing a company, profit is sanity, and cash is reality, while top-line is vanity. “We tend to get carried away by growth and revenue growth, but we need to look at balance sheets and cash flows closely. They tell more about the character of the company and the management, than just looking at what is apparent, which is the top-line growth,” Kurian said.

This mantra has helped her identify stocks that will be multi-baggers, but also avoid pitfalls. “Markets are always volatile and they follow cycles. And in down cycles, you also have to be able to avoid stocks, which are pitfalls. Cutting your losses or making less mistakes is very important as is identifying winners. And that's the mantra that I have followed,” she said.

The two sectors of 2024
Kurian also managers two sector funds; Kotak Banking & Financial Services and Kotak Healthcare.

According to Kurian, the banking and financial services sector has seen a drastic transformation over the years. “It's no longer just a sector, which comprises public sector banks, private sector banks and NBFCs,” she says. Even within non-banking financial services (NBFCs), there are asset financiers, housing finance companies and microfinance companies. Within banks, there is the public sector, private sector, old generation banks and  small finance banks. Futher, there are various capital market plays, such as insurance.

“We believe that in terms of risk-reward, looking at growth, ROE, as well as valuations, some of the larger private banks and some of the larger public sector banks are well placed, from a growth, ROE and valuation perspective. We are also positive on select NBFCs, specifically, the asset financing NBFCs, specifically the auto-financing pack. On the insurance space, we are selective because of the regulatory uncertainty that exists at this point in time,” she said.

On the healthcare side, Kurian likes companies which are focused on specialty pharma, companies which are present in the domestic space where growth is fairly structural in nature.

When it comes to contra calls, Kurian is betting on large private sector banks and select large public sector banks, which have been clear underperformers in the last one year. The other contra call is recovery in rural demand.