India’s Best Fund Managers 2021

Contrarian Captain Cool

Balance sheet, cash flows and capital allocation — these are Invesco Mutual Fund’s Dhimant Kothari’s touchstones

India’s fformer cricket captain MS Dhoni earned his moniker Captain Cool by taking risky bets and backing them with enviable calm. He delivered victories by placing his trust in younger players when others looked askance, promoting himself up the batting line when required even when others doubted his motives and refusing to counter sledging with abuse.

Dhoni inspires Invesco Mutual Fund’s Dhimant Kothari, who can relate to the cricketer’s “controlled aggression and conviction”. Both are good at spotting diamonds in the rough and both can wait patiently for the stones to breakthrough with their brilliance.

Kothari, who is partial to value stocks and “growth (stocks) at a reasonable price”, prides himself on picking up stocks at their earnings as well as valuation-cycle lows. He says there is a wrong perception about value, that is, buying low P/E stocks.

“There cannot be a cut-off P/E that a value fund should restrict itself. If the current stock price is factoring only 15% growth, whereas the company can potentially deliver 20% growth, then there is value arbitrage or opportunity. Also, if the company is growing at 15-16% but the P/E is 20x, then it is still a reasonably valued company or growth available at reasonable price,” he mentions.

This fund manager was initiated into the world of finance early. His father was a traditional bookkeeper, writing books of accounts in Gujarati, and the younger Kothari would accompany him to his office and banks, and for cash collection. While he found the work interesting, he noticed that his father was not getting paid enough for his effort and realised a professional degree could make a huge difference. Therefore, along with his graduation in commerce, he decided to pursue chartered accountancy.

During his internship, Kothari found accounting and auditing less exciting than he had imagined. He needed a new direction and found it as a research analyst with Crisil in 2004. “That stint helped me build in-depth understanding of sectors and develop strong analytical rigour,” says Kothari. Seven years later, in 2011, he joined Invesco as a buy-side analyst and tracked commodity stocks for eight-and-a-half years. In 2018, he was made a fund manager and in two years, he was given charge of Invesco’s biggest funds — Invesco India Tax Plan and Invesco India Contra Fund.

Today, he oversees more than 50% of Invesco’s AUM.