India’s Best Fund Managers 2021

“Everything about the market recovery is not froth”

Axis Mutual Fund's Jinesh Gopani on why he is betting on IT and consumption stocks

Faisal Magray

Last year was unpredictable for sure but what has been equally surprising is the market hitting an all-time high. Jinesh Gopani, fund manager at Axis Mutual Fund, says that increase in home loans disbursal and fewer job cuts indicate that things did not turn out as bad as was expected. He tells Outlook Business how digitisation has mitigated the disaster that was COVID-19, and how the fund is betting on the innovation happening in venture investing.

What has been your strategy through the market volatility, when it cratered last year, and now as it has hit an all-time high recently?
Frankly, we had never anticipated the lockdown. The economic activity went down to zero. The initial period was spent understanding health issues and their impact on the economy. If you recall, even before the COVID-19 crisis, economic activity had been slowing down for two years; GDP growth had declined from 8.5% to 4.5% over that period. So, even before the pandemic struck, we had been investing only in opportunities that would see good growth irrespective of the economy. Fortunately, we were also sitting on a decent amount of cash, which was 7-10% on average across our funds.

When the lockdown happened, the only thing we did was to see how balance sheets of our companies would be affected and move to those which had the resilience to withstand this difficult period. Ex-financials, most of our companies are debt free, so we handled that initial period well, when the market was down 35% during March. Since financials is a leveraged sector, we cut some of our positions and went into pharma. The next few months we were cautious and, by August-September, when we sensed that the recovery was good and the bounce-ba

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