Birla AMC Core Equity

Investment Strategy

The Core Equity Portfolio follows a benchmark-agnostic approach within a large-cap universe, aiming to identify high-quality businesses capable of delivering consistent long-term value creation.

Investment Philosophy

The strategy focuses on identifying “recurring winners”—companies that have demonstrated an ability to consistently create shareholder value. Sector selection emphasises areas that are structurally important for long-term wealth creation.

The portfolio construction is supported by proprietary intellectual property and screeners, combined with extensive fundamental research to identify future leaders. A comprehensive alert system is also used to track industry-level valuation trends.

The strategy follows a value-oriented approach, seeking to identify medium- to long-term mispriced companies and invest at a discount to intrinsic value to generate alpha.

Investment Process

• Universe Construction: Build the investment universe using a combination of quantitative and qualitative screeners, evaluating metrics such as ROE/ROCE, leverage, debt-servicing ability, and management quality.
• Filtering & Validation: Eliminate companies that do not meet screening criteria, while identifying potential catalysts such as micro or macro turnarounds, demergers, deleveraging events, or management changes.
• Portfolio Optimisation: Narrow the universe to 50–60 stocks by assessing risk–reward profiles and targeting opportunities with potential upside of up to 100% over 3–4 years.
• Final Portfolio Selection: Construct a concentrated portfolio of 25–30 high-quality companies with strong growth potential and favourable upside characteristics.

PMS Background

As part of one of India’s top-five mutual fund houses, Birla AMC PMS benefits from the substantial research depth, broker and corporate access, and distribution strengths of the broader mutual fund platform. However, the PMS business operates as an extension of the AMC rather than as a founder-led investment platform. As a result, the PMS has historically seen higher investment team churn, limited skin-in-the-game at the CIO level, and relatively loosely defined investment philosophies compared to investor–promoter–driven PMS houses.

PMS Investment Philosophy

Birla AMC PMS follows a value-oriented investment framework aimed at generating long-term alpha by combining quantitative screening with fundamental research. The philosophy emphasizes sustainable growth, favourable industry structures, and disciplined valuation.

Investment Tenets

• Focus on sustainable long-term growth in select industries with favourable operating conditions.
• Preference for businesses and sectors that consistently create value through structural advantages.
• Use of quantitative screeners supported by bottom-up fundamental research.
• Value-investing approach to identify mispriced opportunities and generate alpha.

Investment Approach

The strategy employs a blended top-down and bottom-up approach to construct a portfolio of 25–30 companies.

• Top-Down: Identifies “recurring winners” by focusing on sectors growing faster than GDP and operating in favourable industry environments. Companies selected through this lens typically demonstrate consistent profitability and strong return ratios (ROE, ROCE).
• Bottom-Up: Identifies mispriced companies trading at a discount to intrinsic value using Piotroski scores and detailed fundamental analysis of business strategy, management quality, and execution capability.

Investment Process

1. Universe Screening: Monthly tracking of the investment universe using quantitative filters such as recurring winner screens, Piotroski score, ROE, and leverage (D/E).
2. Fundamental Validation: Elimination of approximately 80% of companies through detailed fundamental research, including management meetings, dealer and channel checks, and plant or factory visits.
3. Valuation & Upside Assessment: Further filtering based on valuation discipline and potential upside, targeting opportunities capable of delivering up to 100% returns over 3–4 years.
4. Portfolio Construction: Final selection of 25–30 high-quality companies with strong growth prospects and attractive risk–reward profiles.

Suitable For

Investors seeking the comfort of investing with a large, established AMC brand, while aiming for higher risk–return potential than traditional mutual fund strategies.