How We Build a Portfolio

QVT Research Methodology: Quality, Value and Trend

A structured process for the proposed model portfolio and focused stock research, with explicit criteria for selection, exclusion and review.

01

Defining the Universe

The investable universe for each portfolio is drawn from all publicly traded equities on the NSE and BSE meeting a minimum market-cap and liquidity threshold appropriate to that portfolio's mandate (large-cap, smallcap, or sector-focused).

02

Research — The QVT Framework

Every constituent is evaluated against three pillars developed and refined by the research desk:

  • Quality — balance-sheet strength, cash-flow conversion, promoter shareholding and pledge trends, related-party transaction discipline, litigation and regulatory history.
  • Value — valuation relative to intrinsic worth and to listed peers, using P/E, EV/EBITDA, P/B, and return ratios as appropriate to the sector.
  • Trend — earnings and revenue trajectory, sector tailwinds, and shifts in institutional (FII/DII) ownership.

For new listings, this extends to a full DRHP/RHP due-diligence process — extracting restated financials, risk factors, related-party disclosures, and use-of-proceeds detail directly from the offer document before any position is considered.

03

Constituent Screening

  • Stocks qualifying on the QVT criteria above are shortlisted for further review.
  • Liquidity filters are applied to remove thinly traded or illiquid names.
  • Names with unresolved governance red flags — rising debtor days alongside reported profit growth, negative operating cash flow, withdrawn credit ratings, or unexplained promoter-stake changes — are excluded pending clarification.
04

Portfolio Construction & Weighting

Screened constituents are weighted according to the stated strategy of the portfolio (equal-weight, conviction-weighted, or market-cap-tilted), with position limits designed to manage single-stock concentration risk.

05

Rebalance

Each portfolio is reviewed on a fixed schedule (typically quarterly). The research desk reassesses every constituent against the QVT criteria and realigns weights — or replaces holdings — for the following period. Any interim exit driven by a governance or accounting red flag is communicated to subscribers ahead of the scheduled rebalance.