Narnolia PMS

About

Narnolia PMS is meant to be a core buy and hold portfolio for investors who aim to capitalize on the wealth creation opportunity in the Indian economy through equity investing. It started in the year 2012. Narnolia PMS provides a unique opportunity to diversify single PMS investment among 5 different equity and mutual fund strategies all through a single account – helping the investors to prudently allocate their investments in these strategies proportionally depending on their requirements and risk profile. With this the investor gets the freedom to choose their preferred basket of stocks. All strategies are uniquely modeled around various cap and fundamental characteristics of growth and quality. Each portfolio comprises a flexible and judicious mix of companies to have the right kind of stability to sail through the tough times as well as have the ability to outperform in the long term.

Key staff

Krishna N Narnolia, Founder and CMD, is respected and widely known in this industry for his in depth work on Indian growth story with respect to evolution of equity culture and investment opportunities in the country. Under his leadership, the company has emerged as one of the fastest growing and most respected brands in the country.  

Shailendra Kumar, Co founder and CIO, is known for his deep understanding and over two decades of experience in the space of fund management and investment advisory. Under his leadership, Narnolia has been recognised as the “Most Consistent Portfolio Manager of the country” in 2018 and 2019 and also as the “Pioneer and 2nd largest investment advisory of the country” in 2021.

Investment philosophy

Follows a proprietary Multi-Cap fundamental & Quantitative model that processes multiple years of P/L, BS and cash flow data of companies resulting in a portfolio of India Story based Growth and Midcap biased stocks.

It identifies investments within a M (Momentum of earnings), C (Capital allocation strategy), Q (Qualitative Financial ratios) framework which looks at rising momentum in the fundamentals (not necessarily price)

Media

Interview with Mr. Shailendra kumar, Sep 16, 2020, AIF and PIF experts india, https://youtu.be/2nyLRENLzgE  

In this interview, we can see that the Co founder and CIO talks about the characteristics they look for while investing in businesses. They look for companies with higher ROE, ROCE, free cash flows of company or they look for growth in ROE, ROCE, free cash flows of company so that they can invest in quality businesses.

And he also talks about linearity i.e., how gradually those earnings increase so as to know whether they can sustain. Rapid increase in those margins in the short term don’t sustain for longer periods. They also look for return ratios in comparison with peers and the broader stock universe.

He says that they follow a bottom up approach while addressing the market, quality of management of the company, business and financial moat, modeled financial numbers, and multiples of valuation. These are the five m’s that they care very much of. 

Insights on Narnolia PMS, June 22, 2019, Narnolia TV, https://youtu.be/VwNYP9kqjrI?list=PLBOwWTFx4LRNatfSE2MI1jlhVpHU0WTzg 

In this interview, Co founder and CIO, Mr. Shailendra Kumar, talks about their investment philosophy. He says that their approach is ‘growth in value’. It means that they want to invest in businesses that grow in value. They would look for those businesses whose ROE, ROCE, free cash flows are likely to grow and these would come into their radar for selection.

They also have a framework to relate business with business environment, relate leaders with their strategies and operational management capabilities and the impact of all these on company financials like balance sheet etc. He says that they also focus very much on the non-financials like quality of the management, business environment, moat etc.

He also states the reasons for their effective risk management are extensive research and 360 degree understanding of businesses and try to know as much as possible by interacting with all the stakeholders and being disciplined with their investment philosophy. 

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