In his quarterly newsletters, Surjitt has been warning over the last 6 months about earnings growth slowdown to single digits – not just for FY25 but also continuing to FY26.
His focus across 3 PMS products that he manages – Core Equity (which is quality focused), India Equity (which is growth focused) and Phoenix (which is small cap oriented) continues to be to own stocks that have high visibility of earnings growth well ahead of market averages.
Strong earnings profile of stocks coupled with portfolio beta less than 1 (less volatile compared to market) and sharpe ratio above 1 (positive alpha) are metrics he monitors closely to ensure sound portfolio quality.
Tactical cash positions built across Nov and Dec 24 in Core Equity and Phoenix (11-12% of portfolio) are helping portfolio performance in this correction and should enable him to deploy into his target stocks when they come into his buy zones.
Core Equity’s 1 yr returns underperformed its broad market benchmark Nifty500 Multicap 50:25:25 TRI due in part to a couple of high conviction healthcare stocks which have been in the top holdings, underperforming markets during 24.
India Equity has performed in line with its broad market benchmark on a 1 yr basis while Phoenix has underperformed its small cap benchmark over the same period.
Surjitt is encouraged by the last 6 months performance, where all 3 have delivered healthy alpha over their respective benchmarks. He hopes to continue this recent outperformance into 2025 as well.
He is now warming up to large cap IT services majors, where management guidance is now positive after a long time.