Transcript: How Mutual Fund Managers Find Multibaggers Ft Aditya Khemani

TITLE: How Mutual Fund Managers find multibaggers? Ft. Aditya Khemani CHANNEL: Mutual Funds with Groww DATE: 2025-10-25

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(Raw auto-generated transcript — predominantly Hindi/Hinglish with garbled English transliteration. Preserved verbatim from the YouTube caption track for reference. The summary note is the reliable artifact.)

सपोज उन्होंने 5 कैटेगरी डिसाइड किया है में भी पर कैटेगरी 2 स्कीम में डाल सकते है so it to ten schemes is more than in। आप देखेंगे asset management industry all companies are midcap, not even one company is a largecap; you take a wealth management industry, not even one company is there in largecap; you take exchanges, a commodity exchange, an equity exchange — on the listed side not one company is a largecap; you take auto ancillary as a sector — not even one largecap auto ancillary, all are small cap, mid cap. Typically signs everyone talking about small cap, mid cap is the usual sin. Secondly, if you look at small midcap — suppose small midcap is 50 percent up but earning is 15 percent, so there’s a lot of rerating in that price movement.

हेलो फ्रेंड्स, मेरा नाम अमृता रोरा है, वेलकम बैक टू म्यूचुअल फंड की बात… आज हमारे इस एपिसोड में पहली बार हमारे साथ हैं Aditya Khemani, fund manager at Invesco Mutual Fund. Aditya has over nineteen years of experience in the equity market and currently works with Invesco as fund manager, equity, with effect from November 2023. In his last assignment before joining Invesco, Aditya was working with Motilal Oswal Asset Management India as fund manager. In the past he has also worked with companies like SBI Funds Management and Morgan Stanley. Aditya holds a Bachelor of Commerce from St. Xavier’s College, Calcutta University, and a PGDM from IIM Lucknow.

[Full raw transcript continues in the cached source file: /tmp/yt_cache/GhB5ujZcjCU.txt — the original caption track is heavily corrupted by auto-transliteration. The Full Story section below is the cleaned, reliable rendering of this conversation.]

Key topics covered (verbatim themes from the conversation):

How many mutual fund schemes an investor should hold (8–10 max; 3–4 categories, 2 funds each).
Definitions: large cap = top 100 by market cap, mid cap = 101–250, small cap = 251 onward.
Why small/mid caps are NOT as risky as people assume (a “mid cap” today can be a ₹1 lakh crore market cap company making ₹2,500 crore profit).
Why interesting/emerging sectors live mostly in small/mid cap: hospitals, EMS (electronics manufacturing), CDMO (pharma contract manufacturing), AMCs, exchanges, wealth management, auto ancillary.
Why banking is the exception — large cap banks have better deposit franchise/trust and bigger tech spend, so small/mid cap banks are handicapped.
How to find multibaggers: don’t chase them. Identify good management + good business compounding 15–25% earnings, hold, keep tracking. 25% CAGR = 10x in 10 years; 15% CAGR = 4x in 10 years. One multibagger hides ten failures.
Invesco’s process: bottom-up, high-conviction, ~300 stock universe, 45–50 stocks, absolute-return focus (15%+ earnings floor), promoter passion (“fire in the belly”) as a key qualitative filter.
Realistic return expectation: 13–14% (not the 2020–24 frenzy 15%/month). Lower inflation (3–4%) means 13% today does the work 15–16% did earlier.
Active vs passive: outperforming the index is much harder now (more analyst coverage, more concalls, more PMS/family offices, no information edge). Alpha now comes from portfolio construction, not stock picking alone.
Valuation: very important but subjective/art. DCF logic — 60–70% of a growth company’s value sits in terminal value, which is a narrative. Can’t judge on next 2-year P/E alone; need the long runway.
Red flags of an overheated small/mid cap: everyone talking about it (sin), and price up far more than earnings (rerating). Valuation is the biggest tell.
Cycles are long (small caps cracked 50–60% in 2018; 2020–24 was a goldilocks period). Take a 5–7 year view.
Allocation is individual (risk appetite, age, temperament, when you need the money).
If forced to pick 2 equity categories: a midcap fund and a small cap fund (pure plays, 65% true-to-label exposure each).

Closing host summary (Hindi) recapping all of the above. Standard SEBI disclaimer at end.