Rohit Singhania: From Analyst to Indian Equity Fund Manager

Rohit Singhania’s journey in the financial industry began in 2000 as a sell-side analyst. He transitioned to the buy-side in 2005, joining DSP Merrill Lynch’s PMS division. This shift marked a significant change in his approach, as he began to focus more on risk management and macroeconomic factors. In 2010, Singhania was given his first fund to manage – the DSP T.I.G.E.R. fund. Over the years, he took on more responsibilities, managing multiple funds and eventually becoming Co-Head of Equities at DSP Mutual Fund.

The DSP Approach: Collaborative Learning and Growth : Singhania highlights DSP’s unique approach to team development. The firm has a dedicated “Internal Day” every Wednesday, where the entire equity team discusses ideas, recent meetings, and important articles. This collaborative environment fosters cross-sector learning and helps analysts develop a broader understanding of the market. Singhania emphasizes the importance of grooming and developing team members, just as he was mentored during his career.

Investment Philosophy: Beyond Past Performance : When analyzing companies, Singhania looks beyond past performance. He focuses on understanding the factors that drove a company’s success in the past and evaluates whether these factors will continue to be relevant in the future. He also considers companies that may be currently underperforming but have the potential for future growth. Singhania’s approach to valuation involves a combination of historical data, peer comparisons, and forward-looking analysis.

Sector Preferences and Macroeconomic Views : Currently, Singhania favors sectors such as financials, healthcare, auto, and telecommunication. He emphasizes the importance of understanding macroeconomic factors and their impact on various sectors. While acknowledging geopolitical risks, Singhania advises against trying to predict binary events and instead focuses on understanding how different businesses might be impacted by potential scenarios.

Active vs. Passive Investing in India : Singhania believes that active management still has a significant role to play in the Indian market. He points out that while passive strategies have performed well in recent years due to the narrow breadth of market performance, the evolving nature of Indian businesses provides opportunities for active managers. He suggests that a blend of fundamental analysis and quantitative strategies could be effective in the Indian context.

Management Quality and Corporate Governance : DSP employs a forensic analyst to dig deeper into companies’ structures and promoter holdings. This additional layer of scrutiny helps identify potential risks that may not be apparent from standard financial analysis. Singhania stresses the importance of understanding a company’s governance structure and the promoter’s other business interests when making investment decisions.

Conclusion: Rohit Singhania’s journey from a sell-side analyst to a seasoned fund manager at DSP Mutual Fund offers valuable insights into the evolution of Indian equity markets and fund management practices. His emphasis on collaborative learning, comprehensive analysis beyond financial metrics, and the importance of understanding both micro and macro factors provides a holistic view of successful fund management.

Singhania’s approach to investing, which combines traditional fundamental analysis with modern quantitative techniques and forensic scrutiny, reflects the changing landscape of Indian equities. His views on active management in India suggest that there’s still significant value to be added by skilled fund managers in this market.

For investors and aspiring fund managers alike, Singhania’s experiences and insights offer important lessons on the complexities of managing equity funds in a dynamic and evolving market like India. His career trajectory and investment philosophy underscore the importance of continuous learning, adaptability, and a multi-faceted approach to equity investing in today’s complex financial landscape.