In an interaction with Kshitij Anand of ETMarkets, Somil Mehta, Head of Retail Research at Mirae Asset Sharekhan, emphasised that sustainable wealth is built over the long term through a structured approach rather than impulsive bets.
He highlighted the importance of consistent monitoring, risk management, and understanding business fundamentals, noting that investors often fall into the trap of treating stock ideas as one-time opportunities instead of long-term commitments.
As markets evolve and information becomes more accessible, Mehta believes that sticking to a disciplined process—not chasing trends—is what ultimately drives meaningful returns. Edited Excerpts –
Kshitij Anand: Let us start with the fact that retail participation has definitely increased, more so after COVID, because of the rise in DIY investing. But has research also evolved at the same pace over that period of time? What are your views on that?Somil Mehta: Yes, definitely. Participation has gone through the roof in the last five years after COVID. In the last five years, the number has reached 21 crore Demat accounts, which is really very good for the economy as participants are becoming more aware of wealth building, research, and more avenues for investment ideas.
Now, coming to research, it has not evolved that much compared to participation. What I have seen in the last five years is that people are going to social media and taking tips and information from there, but that is not how it works. It should be more discipline-based—that is how I see it. Discipline should be about your position sizing, how much risk you can take, what kind of age bracket you are in, and where you want to reach at a certain age. These are the parameters that you really need to understand and then take these research ideas into account.
Kshitij Anand: Absolutely. In fact, like you rightly said, research is now available on almost every platform, and I think it is more about how easily it is accessible. However, there is no structured process on how investors act on research calls. So, are there any mistakes you foresee when you talk to clients? They might have information about a research call, but I am sure that in the process of implementing or executing those calls, there are mistakes that investors should be aware of—mistakes they might not even realise they are making.
Somil Mehta: Yes, there is one mistake that almost everybody makes, which I have seen over the last decade. People treat these research ideas as one-time ideas. They need to be convinced about the idea, read the research reports, and build a risk management system for themselves. It could be a simple one—I do not expect anyone to build a very complex institutional-level or algo-level risk management system—but there has to be a basic framework.
Investors should invest in the right ideas in a systematic way. You cannot have all your eggs in one basket. You need to have gold, equity, a bit of bonds, and even FDs. People say that FDs are not useful, but they are real, liquid, and give you peace of mind. This is how I see it. The mistake investors make is that they take ideas as one-time bets and then leave them.
Kshitij Anand: Tell us something—when you give a buy recommendation or when there is a report with a buy call on a stock, how should investors read that? Is it price-sensitive, time-sensitive, or consensus-driven? How should one interpret it? Usually, what happens is that one brokerage house might give a buy, while another might have a completely different view.
Somil Mehta: Absolutely, and that is why we have a Research Centre now. The Research Centre gives you a complete idea and structure for building your wealth. Even for trading, it has to be structured and disciplined.
Now, if the question is how an investor should look at it—there are short-term, medium-term, and long-term perspectives. If you are talking about short-term, that is definitely trading. Trading requires very strict discipline and risk management. Your position sizing, loss-taking ability, stop-loss levels, and targets—all of that need to be tracked regularly.
Now let us move to the medium term. Medium-term investing is more about positional views or positional trading. These ideas are typically for more than three months and aim for around 10–15% upside or downside. Whether you are going long or short, discipline is equally important—position sizing, stop-loss, and targets remain critical.
Now let us come to the long term, where real wealth is created. This requires patience and a high level of discipline. You need to focus on research reports published by analysts, read them carefully, and understand the future prospects of a company—what they are doing and how they are positioned in the current environment. Given today’s scenario, many companies are being tested, so understanding the broader context is also important.
Long-term investing will definitely help build wealth, and this is how investors should approach it. The Research Centre provides short-term, medium-term, and long-term ideas on a single platform.
Kshitij Anand: And I think there is one word that you mentioned, and that is actionable research. So, what does actionable research really mean? If you can help simplify the term for investors.
Somil Mehta: Actionable insight, basically actionable ideas, means whether you can act on that idea. It cannot just be information. Actionable ideas mean understanding what the company is doing, what the future prospects are, what the targets are, what the upside potential is, and what can go wrong. All of that needs to be there in the research report, and investors are supposed to read that and need to read that.
We write it in the report. We give them a very concise, summarised report. It is not like institutional reports that are 40–50 pages long. For retail research, we provide a concise, summarised report of three or four pages. Investors should read them and then act on them.
Kshitij Anand: And how has this format evolved over a period of time? Like you rightly pointed out, for institutions the format is slightly lengthier, but for retail investors it is more compact. Is that how it has evolved over time so that it can be consumed in a manner that is more preferred by them?
Somil Mehta: Absolutely. If you look at institutional-level research reports, they are around 50–60 pages or even more. That is required for institutional research and participants because they want to know each and every detail.
But if you compare that with retail, retail investors require a very summarised report. They do not need to go into extreme detail. If you have that summarised report ready, with key points and key charts that give a visualised idea of what could happen or what could go wrong—because things can go wrong as well—then retail participants will have better control over what they are doing at that point in time.
So yes, for retail research, content consumption is very important, and that content has to be shorter. It cannot be too long. Videos of two to three minutes or five minutes also work really well, and we do that at the Research Centre as well.
Kshitij Anand: Absolutely, because I wanted to ask you—demand for bite-sized research has also amplified over the past few years, thanks to the Gen Z population or Gen Z investors who have recently entered the market. A lot of video explainers are also highly sought after. This is something that has really grown significantly in terms of demand, and a lot of news and research is being consumed in this manner. So, is this also something that you are facilitating as part of the Research Centre process?
Somil Mehta: Yes, absolutely. What we have done is start making videos on our reports. We are not making videos for all reports, but we are creating them for sector views quarterly, for our annual market outlook, for the budget, and for Diwali as well.
We make these small videos, which could be two minutes to seven or eight minutes long. That kind of duration is now required for today’s generation. As you rightly said, Gen Z requires this kind of content to understand what is happening.
One example I will give you—I do a weekly video where I provide updates on the markets, on Nifty and Bank Nifty, including levels and targets. This helps participants, especially short-term participants, to analyse and understand what a research centre or research analysts are doing and thinking. These kinds of initiatives really help.
Kshitij Anand: And, in fact, while going through the research, I am sure a lot of investors would have one thing in mind, and they are actually watching the video for one thing—finding the next wealth creator or the next multi-bagger.
Somil Mehta: See, everybody wants to…
Kshitij Anand: This is something—if I am scrolling through this video, I think what I want is information on how I can create or build wealth, or whether there is a stock that can actually double or triple from here, and whether that would be a short-term or a long-term call. But is there a structured process to this?
Somil Mehta: Wealth can be created only in the long term. Now, there has to be a structured way. There is no fixed multi-bagger concept. Yes, you invest in a good company today, and if you believe that this company is going to perform very well in the future and has a lot of potential, you hold on to it for some time.
Holding on to it requires discipline and patience. When you do that, you make money. For example, if I tell you today to invest in XYZ company and say that it will perform very well over the next 10 years, but you buy today and sell tomorrow, that is not going to help anyone. You would have missed out on that multi-bagger.
So, there has to be discipline, there has to be patience, and you need to understand the scenario and the future prospects of the company, and then wait for it.
Kshitij Anand: Absolutely, and that is the right methodology to go by. How important is transparency in the research reports that you publish?
Somil Mehta: It is the most important part. If you are not transparent, trust and credibility will never be built because, at this point in time, information is freely available. If you are not transparent, you will never be able to gain that trust. So, transparency is definitely very important.
Kshitij Anand: Let us also talk a little bit about the Research Centre. I hope this also plugs the gap that we have discussed in our conversation. How would you like to sum it up?
Somil Mehta: The Research Centre is one place where you get everything, and we are trying to bridge the gap that we have already spoken about. What we provide in the Research Centre includes fundamentals, technicals, derivatives, and macro insights, and we are also going to start covering global macros as well.
These are very important aspects of the market, and participants who watch these videos or read these reports will get everything in one place. So yes, traders and investors—everyone—will get institutional-level, high-quality research reports in one place.
Kshitij Anand: And who are the investors who are likely to benefit from this?
Somil Mehta: As I said, we have both retail and institutional segments on the Research Centre, and I am currently heading the retail side. Retail participants will get everything related to equities, commodities, and ETFs.
In commodities, you will get reports on gold, silver, and other commodities. In equities, you will have reports on markets like Nifty and Bank Nifty. You will also have reports on individual stocks, as well as curated baskets of stocks.
These are some of the initiatives we have taken. If you want to build a portfolio, you can go to the fundamentals section, review our coverage reports, and act on them. There are sector reports and many detailed stock-specific reports across sectors, which you can choose from and invest in.
Kshitij Anand: And if some investors want to understand how the process works, is there any grace period or a free trial period that they can avail at this point in time to try out the Research Centre?
Somil Mehta: Absolutely. There is a 15-day trial period. We want investors and participants to explore the platform, see the quality of the reports and videos we create, and then go for full-fledged participation and involvement with the Research Centre. There is a lot of support from our broking side as well as our customer service team. So, please feel free to explore it.
Kshitij Anand: So, do you think you have set a standard for research reports, and this could be considered the OG of research platforms that investors can have? Do you see this as a trend that will only evolve further from here?
Somil Mehta: Absolutely. There is a lot to be done. I am very sure people will follow this trend. If a participant is getting everything in one place—short term, medium term, long term, fundamentals, technicals, derivatives, macros—then there is nothing like it. It becomes the best place for a retail investor.
Institutional investors already get research reports from institutional analysts and dedicated segments. However, retail participants are still not very aware of these offerings, and that is why we want to reach out to everyone and help them understand how they can build wealth using our ideas.
Kshitij Anand: Let me ask you about another issue—or rather, a concern or habit of investors. Many investors tend to hold on to a stock in their portfolio for emotional reasons. Is it attachment? Is it like a ‘baby’ in their Demat account? How do you deal with such situations? I am sure you receive many queries where investors do not want to let go of a stock, even if it is loss-making or its prospects are weak. Even after reading Research Centre reports, they sometimes fail to act on them.
Somil Mehta: Absolutely. I completely understand your point. People often struggle to let go due to emotional attachment. Once they have invested, they feel connected to the stock. When they read a research report and are convinced about the company’s future prospects, they start believing in the story and expect it to become a multi-bagger.
However, research reports are not one-time documents—they are updated regularly. For example, if today we believe that an XYZ company can deliver a 20% upside and release a report, but tomorrow the situation changes and the company starts underperforming, we will issue an update explaining what has changed and revise our view accordingly.
Investors need to stay disciplined. They must continue reading and monitoring updates on the ideas and reports they have acted upon. For investors, reviewing reports on a quarterly basis is sufficient—you do not need to track them daily. However, for short-term traders, more frequent monitoring may be required.
For long-term investors, it is important to revisit the latest reports periodically, understand any changes in outlook, and act accordingly. This discipline is essential.
Kshitij Anand: In fact, you did bring up a very valid point. A lot of investors act on one research report but do not follow up on the updates provided by the Research Centre. That is very important, especially for long-term investing, because if you invest in something and then forget about it… I think those days are gone when you could pick one stock and, after 18 or 20 years, things would just work out…
Somil Mehta: You would have a multi-bagger.
Kshitij Anand: Yes.
Somil Mehta: No, so you have to choose right. You have to choose correctly, and that is why we are here—we choose the right stocks. And even if, for example, we have not done the right research—just hypothetically speaking…
Kshitij Anand: No, but things are also evolving day by day. We have recently seen periods like trade wars and other developments. Situations keep evolving, and that also impacts businesses.
Somil Mehta: …businesses as well, yes, absolutely. And that is where things can go a little wrong. We should make sure that we read these updates. Once we read them, we understand the scenario better.
And if your stock is down, I do not believe in averaging. As you said, I do not believe in averaging losing positions at all. When you are incurring losses, do not average down. Read the reports. Understand what is happening with the company, what the scenario is, and where it is getting impacted, and then act accordingly. But if you are losing on something, do not average down.
Kshitij Anand: Also, tell me something—what is the standard time frame for a research report? Is it 6 months, 9 months, or 12 months? How does the format work?
Somil Mehta: For short-term, it is probably a week.
Kshitij Anand: For technicals?
Somil Mehta: Yes, for technicals and derivatives, it would be one week or maybe up to a month at most. For fundamentals, it is typically one year, so it is long term.
If you are investing based on fundamental research, you have to make sure that you stay invested for at least one year. This kind of discipline is what helps generate returns. If you stay invested for a year and then evaluate how the company has performed, you will see the results.
We cover both large companies and midcap companies. You will be surprised to see, after one year, how these companies perform and what kind of returns can actually be generated.
Kshitij Anand: In fact, let me also ask you one thing, because you did mention position sizing in the conversation. Let me pick your brain on that, because it is very important for any investor. I mean, for institutions, definitely, but even for individual investors—how should they go about position sizing when constructing a portfolio? How can the Research Centre help them do that?
Somil Mehta: Position sizing—we do not construct a trading portfolio or a long-term fundamental portfolio with a defined risk management structure for anyone. We definitely provide ideas and recommendations. But as you rightly said, risk management is the most important part, and position sizing is one of the most important aspects of it.
Now, if I have to give an example, let us say you have Rs 1 lakh and you want to start investing with that amount. The first thing you should do is keep at least 20%, a minimum of 20%, aside and not touch it at all. That is for worst-case scenarios. So now you have Rs 80,000.
Out of that Rs 80,000, I would say keep another 20%—let us say Rs 20,000—for stop losses and drawdowns. Now you are left with Rs 60,000. You can deploy this Rs 60,000 equally across six different ideas.
Once you have these six ideas in your portfolio, you track them. If you lose some money in any of them, you can use the Rs 20,000 reserved for stop losses and drawdowns to invest in a different idea—but not in the same one, because you are already losing there. As I said earlier, you should not average your losing positions.
Now, these six ideas should be tracked over time. If you are trading short term, you should track them every week. If you are investing for the long term, you should review them at least quarterly. Also, the investment amount should be equal—you should not invest Rs 20,000 in one stock, Rs 10,000 in another, and Rs 5,000 in a third. Keep equal allocation across all six ideas, and you are good to go.
Kshitij Anand: It is like that core and satellite approach, something like that.
Somil Mehta: Absolutely. If you say your core is Rs 40,000, that would be your base, and your satellite would be the Rs 60,000, which keeps rotating. If you are a medium-term investor doing positional trades, once you hit a stop loss, you exit that position and enter a new idea with the same amount.
However, the money you lose has to be replenished from your core, and you reinvest it again. This kind of discipline will take you to the next level. But do not expect miracles—discipline and patience will gradually help you build wealth.
Kshitij Anand: Absolutely, and you rightly pointed out that what works is the process—not another random idea or something seen on social media, or any other view you might have on the market. So yes, follow the report, follow the research, follow the process, and maintain discipline. These are the only things that will help you find the next wealth creator, or at least have it in your portfolio before it becomes a consensus idea.
Somil Mehta: Yes, absolutely—discipline is key. We provide ideas, but as a participant, you have much more to do. You need to maintain discipline, have your systems in place, ensure proper risk management, and keep updating yourself on the ideas you are invested in. These are the things you need to incorporate into your day-to-day routine.
Kshitij Anand: Also, I will ask you one more thing—so we have a buy consensus, but when does a sell consensus come in? What are the trigger points that indicate it is time to reduce positions or advise investors to scale down their exposure to a stock?
Somil Mehta: When we initiate a buy call on a company, we are confident that the numbers are strong, the balance sheet is solid, the future prospects are promising, and the product the company is selling is of good quality.
Now, when we update to a sell or exit, it is usually because something has changed. For example, if the quality of the product deteriorates, or if external factors weaken the company, we reassess our view. When do we start giving sell or exit signals for a stock where we had a long-term positive view? It is when the product is no longer as strong, or if performance weakens over two or three quarters…
Kshitij Anand: The earnings have not really…
Somil Mehta: Yes, when the numbers start declining or overall performance weakens. There can be multiple factors, but all of these are updated in our research reports. You will be able to see them there. Updating is the most important part. Every quarter, you should read the report, and you will get those signals.
Kshitij Anand: I think that is very important because once an investor keeps following the reports and understands what actions to take next, the wealth creation process continues smoothly. If there is a deviation in the original thesis, it will be reflected in the report, and that is when investors can take note and act accordingly in their portfolios. Let me add one more question—how important is management quality? What kind of weightage do you assign to it?
Somil Mehta: It is definitely the most important part because leadership plays a crucial role. I will give you an example—I have always been inspired by the Tata Group and Ratan Tata sir. He has been a role model and has built an empire. That kind of leadership is very important.
If you do not have strong leadership or management, you cannot build the future. They are not just building a company—they are building a future for themselves, for the country, and for investors. So yes, management quality is the most important factor.
Kshitij Anand: And as we progress, and India prospers from a macro point of view, with plans to become the third-largest economy, a lot of companies are now getting listed across different segments. There is a lot of automation, AI, and new-age businesses coming in. How is the valuation methodology changing over time? Each new business presents a new experience for you as well—how do you evaluate these businesses now?
Somil Mehta: Yes, exactly. There are different methods to evaluate valuations, of course. Recently, we have seen many companies coming in with very high valuations, but even those valuations are being respected by the market, and that is absolutely fine.
If you see a company growing in the future and believe it can reach those levels, and if it has strong scalability—whether in India or globally—then such valuations can be justified. New-age businesses come with very different valuation frameworks, and we have our own ways to evaluate them.
Kshitij Anand: If we look at the year 2025, we have seen a lot of companies getting listed. To build on your point, there have been more than 300 listings across the main board and SME segments. While the Research Centre may not actively track SMEs, it does focus on the main board. How do you view the kind of activity we are seeing in the primary market—good, bad, or mixed?
Somil Mehta: The IPO market is doing very well, mainly because the broader market is strong, the economy is doing well, and businesses are performing well. That is why IPO activity has picked up.
Many new-age companies have entered the market and performed well. We should look at this positively. It is good for the market and for investors, as they now have more companies and new ideas to explore.
I am not saying that traditional ideas are fading away—they are still very strong. Large-cap companies like L&T, Reliance, and the Tata Group continue to perform well. However, new-age companies provide more options and new wealth-creation opportunities, possibly even multi-baggers.
So yes, I am very positive on new-age companies, and IPOs should be viewed with a constructive and open mindset.
Kshitij Anand: Also, one more thing—if someone is a very conservative investor and not very active, is there a way within the Research Centre to build a portfolio that is more conservative and relatively low-risk?
Somil Mehta: Yes, absolutely.
Kshitij Anand: For example, a portfolio focused on dividend-paying stocks?
Somil Mehta: Yes. We do have research reports on such stocks—companies that offer high dividends and are relatively stable, with steady growth. These are typically large companies with high valuations.
I would not say they are completely risk-free, as there is always some level of risk, but they are relatively safer. You can go through our research reports and build a portfolio around them. If you want a relatively low-risk portfolio, you can focus on top 50 companies and identify those that offer good dividend yields.
Kshitij Anand: Any final advice for investors?
Somil Mehta: Build a portfolio with discipline and patience. Ensure your risk management is in place. Do not overdo things. Keep reading research reports from the Research Centre.