Look at growth and value

A post graduate in management & systems from the Indian Institute of Technology (IIT), Delhi, Shailendra Kumar, co-founder and chief investment officer of Narnolia Securities, has acquired more than two decades of experience in the investment management industry.

Known for his deep understanding of investment theories, stock selection and portfolio allocation as well as ability to combine fundamental analysis, statistical analysis, option pricing, macro trends and theme studies in building financial market strategies, Kumar has developed and implemented all four major investing and trading strategies for his company: value, growth, mean reversion and momentum. His preferred investing style has always been ‘growth in value.’

Formerly, a research scholar at the department of management studies, IIT Delhi, he co-founded the investment advisory firm, Narnolia Securities. As its CIO, Kumar is engaged in overseeing research, mentoring portfolio managers and acting as portfolio manager for some of the funds and portfolios. He supervises two Sebi-registered long equity PMS schemes, namely Narnolia Velox India 3T and Narnolia Velox Eagle 3T. He also manages Stratsbay Fund, a Sebi-registered AIF Category III fund.

Kumar believes that the US-China trade war would bring in a correction of sorts in the market. After every rhetoric on tariff, Kumar sees steps of reconciliation by both sides, which amply indicates that there is very less chance of escalated tariff protection war by larger global economies. Though the period of adjustment will surely see some fall in global trade and its resultant negative impact on global GDP growth, he believes that the period of adjustment will be volatile but not destabilising.

Looking at India, Kumar says that domestically, the rise in crude and other commodity prices implies the possibility of a revival in the inflation trajectory. Though, the RBI in its last credit policy has hinted of a long pause in rates, the pressure on inflation from rising crude price, low appetite for emerging market bonds, tightening US bond market and liquidity swinging from surplus to deficit, imply that bond yield may remain elevated in India.

Investment strategy

“We follow a simple bottom-up approach for investing. We have a philosophy of picking stocks that have growth-in-value characteristic. By this we mean companies where return on equity, return on capital employed or free cash flows are improving in a sustainable manner. Sustainability requires taking a closer look at the macro outlook around the business and management intent and execution capability.”