UTI Large & Midcap Fund has posted top quartile performance over 3yrs and 5 yrs timeframes, driven by Srivatsa’s nuanced and differentiated approach to stock picking.
He has a contrarian bent of mind – instinctively delving deeper into ignored segments of the market while studiously avoiding momentum chasing. This approach has got him most recently into IT services and Oil &Gas sectors, ahead of most.
He got into private sector banks ahead of the pack and is now taking profits in this segment to fund his more recent purchases in IT and oil/gas.
When evaluating large caps, he is very valuations focused and believes strongly in reverse DCF calculations to see what implied growth rates are being suggested by current stock prices. Where these growth rates don’t make sense, he stays away – a policy that has kept him away from highflying convenience retail platforms.
When delving into small caps and some segments of midcaps, he looks for growth above all else, as there continue to be good picks in under-researched spaces of the broad market.
He believes that markets may struggle a bit until we see broader signs of earnings revival.
He also cautions against getting too complacent about a thaw in US-India relations – if the additional 25% punitive tariffs remain in place for the next 6 months, there will not only be a lot of impact on key labour intensive sectors like textiles, gems & jewellery etc, but also implications for banks which have lent sizeably to export focused businesses.