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Kotak Midcap Fund: Does the Turnaround Still Hold Up?
Image source: juststock/www.istockphoto.comFund manager transitions make investors nervous for good reason. A mutual fund's entire personality, which sectors it leans into, how much cash it holds, how quickly it cuts losing positions, often traces back to one person's judgment.
And when that person leaves after 14 years, the fund that emerges on the other side is not guaranteed to resemble the one investors signed up for.
That is roughly what happened at Kotak Midcap Fund.
Pankaj Tibrewal, who had run the scheme (then named Kotak Emerging Equity Fund) for 14 years, ceased to be its fund manager effective 30 November 2023.
Atul Bhole took over on 22 January 2024. In June 2025, Kotak renamed the fund, along with six other schemes across the AMC, from Kotak Emerging Equity Fund to Kotak Midcap Fund, a cosmetic change with no bearing on the mandate.
What Bhole actually did with the portfolio is a more interesting story compared to name change.
Here's what happened...
Kotak Midcap Fund Portfolio: Then and Now
Through the sector run-up into early 2024, Power, Defence, and Capital Goods between them made up roughly 30-32% of the fund's portfolio, a concentration typical of the broad infrastructure and manufacturing rally that dominated midcap investing at the time.
Following the 2024 general election results, Bhole cut that combined exposure down to around 16-17%, trimming it by roughly half, just before these sectors corrected sharply from their highs.
The capital freed up went into two areas most midcap managers were avoiding: IT and healthcare. The fund built a nearly 19% allocation to mid-cap IT names and around 11% to healthcare.
These are well above the typical category averages.
Notably, specific stock calls paid off: Fortis Healthcare gained roughly 81% over the following year, JK Cement around 59%, and Dixon Technologies about 43%.
This was, by any measure, a well-timed and contrarian call. The fund went from third-quartile performance through mid-2024 to top-quartile over the following year.
It is also exactly the kind of call that looks obvious only in hindsight. At the time, buying IT and hospital stocks while everyone else chased capex and defence names required a manager willing to be out of step with the crowd.
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