Quest PMS

PMS Rating

IME PMS Rating

3 of 5 stars

Decent AMC with weak short-term performance: Quest AMC is founded by 2 seasoned investment professional (Ajay & Bharat Sheth), who have delivered outperformance to the markets over the longer-term, and the PMS recently strengthened the team with the inclusion of Aniruddha Sarkar (who comes in post a successful stint at IIFL). The main concern is relatively weak performance in recent years, which we would wait to improve prior to more actively recommending the PMS for investments.

The PMS/AIF AMC Rating is derived on the basis of our analysis on 5 key qualitative parameters that we use to analyse the quality of a PMS/AIF Provider. These include an assessment of the size of the AMC, the pedigree of the AMC, the pedigree of the team, the value of the investment philosophy & the level of differentiation. These insights of our central research team are documented in the IME RMS, and can be accessed during a consultation call with an IME PMS specialist.

PMS Background

Discretionary AUM (1331cr) | Promoter Category ()

AMC Background

Quess was set up in the 1980’s by Ajay Sheth, as an institutional equity research firm focussed on small & mid caps. On the back of a rich research heritage, they launched their PMS services in 2007 and have scaled into one of the larger PMS houses in India (Top 10-20 ranking).

Investment Philosophy

The investment philosophy is driven by a set of investment principles, that include

  • Management: Unquestionable management track record on ethics and execution capability
  • Strong businesses: Strong leadership position in its domain and within the industry, with strong pricing power and not a ‘me too’ player in the industry
  • Profitability: Companies with strong ROE which are upward trending and steady or growing margins
  • Scalable Opportunities: Companies which have exponential growth potential owing to large addressable market compared to its current size
  • Financial Strength: Strong cash flow generation and ability to pass through difficult times owing to strong balance sheet. Look at manageable leverage in books lower than industry average.
  • Valuation: comfort with enough margin of safety

Portfolio Construction

Portfolio is a blend of ‘Growth’ and ‘Value’ stocks.

  • Growth Stocks (35-45% in sectors such as financials, NBFCs, and consumer discretionary): Companies which are cycle resistant and continue to deliver in all markets typically high EPS growth and high ROCEs
  • Re-rating Stocks (35-45% in sectors such as technology, chemicals, Pharma, and consumer discretionary): Companies which are in a large expansion mode or on the cusp of an industry disruption mode and have the potential for high EPS growth (typically mid-teens) and improving ROEs
  • Value Stocks (15-25% in sectors such as capital goods, autos, cement and telecom): Companies in sectors which have recently seen a downturn and available at deep value typically low teen EPS growth and low teen ROE/ROCEs

Inv Team

Investment Team

Bharat Sheth | 5-star rated FM

Head Equities | 44 yrs Experience | 30 yrs at current firm

Bharat Sheth is a highly seasoned & respected investment professional, having spearheaded the growth of Quest’s advisory & PMS business over the past 25 years. Being part of the core founding team, he has provided the much-needed stability and thought leadership that has helped Quest grow into one of the larger PMS providers in India.

Aniruddha Sarkar | 3-star rated FM

Fund Manager | 16 yrs Experience | 4 yrs at current firm

Past Experience: IIFL AMC (FM)

Aniruddha joined Quest in Feb-2020, after a successful stint of over 10 years at IIFL across various roles including Fund Manager for the MF & PMS and as a research analyst.

PMS/AIF Schemes

PMS & Listed Equity AIF Schemes

Scheme Category Style 1 yr 3 yr 5 yr Since Inc
Quest Multi Large & Midcap GARP 51.4 21.5 20.5 16.8
Quest Focus Flexi Cap Concentrated 45.9 14.8 14.3 14.3
Quest Flagship Large & Midcap GARP 43.4 16.3 16.8 16.8

Returns as of 28-Feb-24.

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Details shared on the public website, are only a short snapshot of the more detailed analysis that resides in our Proprietary Research Management Solution (RMS) – A proprietary cloud-based tool, that ensures that the unbiased research insights of our central research team are shared directly with investors.

Our RMS allows us to operate with a level of transparency, ethics & consistency of insights, that is unparrarelled in the industry. Our RM’s will help showcase the PMS/AIF options that are the most suited for your unique requirements.

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Note: PMS AMC & Scheme Reviews and Ratings are based on IME Capital’s Proprietary Review and Rating Methodology (read more here: AMC Rating & Scheme Ratings). These reflect the unbiased views of our central research team, based on our assessment of the investment value of these PMS/AIF strategies for our investors. We follow a highly stringent rating-criteria, where approximately 50% of PMS AMC’s & strategies would be rated 2-star or below (this is not meant to indicate that these funds are not investment-worthy, but that they do not currently fulfill the requirements we focus on for recommending funds to our investors — based on our internal views on the merit of the AMC/strategy relative to peers). Reviews & Ratings are primarily based on research of publicly available information (SEBI disclosures, PMS websites, PMS-aggregation platforms, webinar recording, media interviews etc.) and no explicit consent is required from AMCs for the same. While we endeavour to do further due-diligence via direct interactions with the investment teams of AMCs, this is typically restricted to AMC’s that meet our foundational fund selection criteria (reviews on lower-rated AMCs are often based solely on publicly available information). The views reflected in our Reviews & Ratings, are our independent views and may not be shared by the AMC’s and the investment teams. Please read detailed disclaimer for more.