India's Best Fund Managers 2019

Bargain Seeker

Where most investors see trouble, Anil Shah sees an opportunity and that has helped him stay ahead of the game

Pratibha Dixit

In mid-2018, India’s entertainment sector found itself in the limelight for not so pleasant reasons. On the one hand, moviegoers were annoyed at the exorbitant prices of food and beverages served inside multiplexes. On the other, there was the security risk of allowing outside food inside. Add to that, there were poor profits from big-budget films over the previous 15 months. The confluence of these factors led to EV/ Ebitda multiples dropping from one-year forward of 18x to about 12x for PVR, the biggest listed multiplex chain in India. The Supreme Court (SC) order to allow outside food into movie halls was expected to dent PVR’s revenue and its stock crashed from Rs.1,463 in June 2018 to a 52-week low of Rs.1,085mid-July. However, when most people saw trouble, Anil Shah, fund manager at Aditya Birla Sun Life (ABSL) Mutual Fund, sensed an impending boom. “We never owned PVR, but it has always been on the radar. Food or films continue to be the preferred choice of family entertainment in India and it is a theme that is unlikely to break. Secondly, the valuations had corrected. Thirdly, for the food ban part, we met lawyers and analysts on both sides to understand the worst case scenario. And I didn’t think that this issue can stick too long. Fourthly, the first mover advantage of PVR as a multiplex is here to stay,” he says. Thus, in August, he invested in PVR and increased allocation to 2.5% within two months. And needless to say, his bet paid off. “Over the past six months small and mid-caps have given a negative return owing to a declining market. PVR on the other hand delivered positive return,” says Shah. Since then PVR’s stock has risen by 46%. The impact of the SC order has been muted with PVR registering profit after tax growth of 38.96% and 18.01% in June and September quarter respectively. Such calls have made Shah one of the most bankable mutual fund managers in India. At ABSL Mutual Fund, Shah manages Equity Fund and two other thematic funds: GenNext Fund and Manufacturing Equity Fund. The thematic funds have delivered returns of 16.58% and 6.41% since inception. Over the six years that he has managed ABSL Equity, the fund has given return of 18.98% with assets under management (

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