Latest news with #EnvisionCapital
Economic Times
24-06-2025
- Business
- Economic Times
GST 2.0 and infra push could power India's next growth phase: Nilesh Shah
Tired of too many ads? Remove Ads Tired of too many ads? Remove Ads Popular in Markets "You have seen the reaction to gold prices , to crude oil prices . All of this we seem to be getting into kind of an environment of moderate inflation , subdued inflation, that has traditionally always been a challenge or a pain for India. So, clearly, honestly from a sentiment point of view and the emerging macro fundamentals, this is a great situation to be in," says Nilesh Shah , MD & CEO, Envision Capital I do not know about the multibagger ideas, but yes, today's interaction could not have been on a better day that when truce has been announced, ceasefire has been announced. At least it puts to rest any of the kind of geopolitical issues or tensions which probably the market had, got reflected a bit of that yesterday but thankfully today we are back to pretty much like business as usual or back to normal. And it honestly augers very well for the market. It augers well for have seen the reaction to gold prices, to crude oil prices. All of this we seem to be getting into kind of an environment of moderate inflation, subdued inflation, that has traditionally always been a challenge or a pain for India. So, clearly, honestly from a sentiment point of view and the emerging macro fundamentals, this is a great situation to be yes, from a pure macro and especially external macros, probably a lot of good news is out there. It is more about now what we do in terms of our own internal policy measures, economic reforms, and I am not talking of the big bang reforms, but just a few things could pretty much further not just the sentiment but also further lift up the fundamentals and contribute to earnings growth, I clearly believe something that we really need to look forward to and watch out for in 2025 is clearly going to be the GST 2.0, I mean that is something which has been in the works in terms of enough of reports out there in the media that the government is looking to now take GST to the next level whether it is in terms of cut in tax rates or whether it is in terms of rationalising taxes or reducing tax slabs and ease of implementation, all of that, I clearly believe that that is something which is probably less spoken about, less appreciated but I actually believe that is going to be very-very powerful, so that is two is upping up the spend on infra. I mean, this financial year the spend on infra pack was kind of pretty much at 3% which was in line with what it was last financial year. But there is room for that to kind of go up. I clearly do not think we have seen any peak of spending on infrastructure, till we get to at least 5% to 6% of the GDP which itself is growing. So, I probably believe that in the next few years you will probably see infra spend probably double or maybe even go even higher than these are some of the things which will continue to be very-very big growth drivers. These are things which will basically encourage businesses to grow and expand. So, on the whole, yes, apart from the global macros, I also believe our own domestic macros, policy measures, there is still lot of room for many things to I do not think because ultimately… I mean, this is a space, especially the largecap it has basically just been growing in about single digit. I believe that for a growth market like India where we have so many other growth options, unless you are essentially hugging the benchmark or want just basically the basic kind of largecap market returns, honestly as a bottom-up investor you probably do not have a compelling reason to be in largecap might be a good place to hide when there is enough correction and these are anyway very capital efficient companies and strong on governance as well. But beyond that, there is really nothing significant to really look out for. So, even in good times they were growing in single digits. If the US economy were to get challenged, global economies were to get challenged, even trying to grow in high single digit could be a huge-huge challenge for the big IT course, pockets remain in the midcap, smallcap IT space where they are specialising in specific domains, those kind of opportunities can remain, but otherwise the big IT companies, the best is behind absolutely. I mean, that has clearly been one of the strongest growth bastions that India has in the consumption space. Clearly post covid over the last five years the whole wave of premiumisation has caught on to the alcobev space. Indian companies have been hugely successful in being able to launch brands which essentially have got well received by consumers and Indian alcobev companies are only increasing their relevance to an ever growing consumer base in India. So, I still think it is still early are still very early on in terms of matrices like our per capita consumption and individual players continue to be on the journey of premiumisation which is driving their realisations, revenues, margins, cash flows. So, I still believe that the sector itself, the category itself still has many-many years to go.
Economic Times
24-06-2025
- Business
- Economic Times
Big banks may struggle, but smaller credit plays set to outperform: Nilesh Shah
"These are some of the categories or sectors or individual companies which have done really well, especially in the recent months or in the last one years. So, we continue to be very-very positive. Financialization of savings, financialization of the economy is not just a multi-year kind of an opportunity, it is a multi-decadal opportunity and I believe it is one of the most strongest investment themes that India as a market has to offer to investors," says Nilesh Shah, MD & CEO, Envision Capital. ADVERTISEMENT But why is that category not doing well? Well, as a theme, it is logical. As an idea, it is safe. As a concept, these are good companies. But if one looks at even the grand old daddy if I may use the word United Spirits, it has not created wealth the way other stocks have created in last five years. Nilesh Shah: So, clearly, first is, within the entire consumer space, it is probably United Spirits maybe over the last three to five years and we own a few stocks in the space, so just a disclaimer including United Spirits. So, over the last three to five years clearly United Spirits has delivered reasonably good returns. It has delivered returns which are ahead of a lot the large consumer companies. So, to that extent, it has done pretty well, not too bad both in absolute terms and relative terms. But obviously the homegrown players like Radico Khaitan which we have been owning as well for a very long time, they have done exceptionally well. So, yes, and United Spirits itself has been going through a lot of rejig in terms of its business strategy, its portfolio, it has kind of shedded its portfolio, what we call as the popular segment, and is now substantially a premium kind of a segment. So, to that extent this itself has basically taken some time, it has taken a lot longer for the business to now stabilise itself. But clearly will it be able to grow substantially higher than the category? I do not think so because its base is so large, its market share is so large, so the big boys will find it or the big giants will find it very difficult to grow at a substantially higher pace. It is obviously the homegrown ones which are going to do relatively better. ADVERTISEMENT So, from a three-year standpoint, what is looking like a theme where whether it is a midcap idea associated with that theme or with that template, but you see earnings visibility of 15% to 20% on a CAGR basis. Nilesh Shah: Yes, absolutely. I mean, I think that has really been the segment where most of the tier II, tier III companies across sectors have been growing at that kind of pace whether we start with IT services or consumer or some of the cap goods companies, those are on a very broad basis companies are growing in high teens which is a great situation to be in in context of where the economy is growing at 6-7% in real terms, 10% to 11% in nominal terms and the earnings of the large companies or the Nifty companies are probably at best growing in high single digit or maybe low double digit or the early teens versus that clearly across sectors we see the next level of companies growing at significantly higher pace. So, that is a great kind of situation to be in. ADVERTISEMENT What about your view on financials? Last time you were very bullish on financials. They have seen quite the runup before geopolitical action took over. I remember, you being positive on IDFC First Bank as well. Does that conviction continue? Nilesh Shah: Yes, I think across the board financials, banks is a great place to be in. Of course, we all know that their balance sheet condition is amongst the best. We have not seen balance sheets which are as strong. Clearly, the growth continues to be there, especially for some of the smaller banks, some of the specialised credit plays and some of the other verticals within financial services which have been growing extremely well, be it online investment platforms or online insurance distribution platforms or online payment fintechs. These are some of the categories or sectors or individual companies which have done really well, especially in the recent months or in the last one years. So, we continue to be very-very positive. Financialization of savings, financialization of the economy is not just a multi-year kind of an opportunity, it is a multi-decadal opportunity and I believe it is one of the most strongest investment themes that India as a market has to offer to investors. ADVERTISEMENT So, what is a better idea, stick to let us say stock broking firms or buy AMCs or buy into intermediaries like NSE and CDSL or it is time to go back to banks? Nilesh Shah: It will have to be a combination of both. There is really no overlap. When we talk of banks, there are credit plays, banks of course will benefit as s long as we see the markets continue to be strong, that will continue to attract lots of capital. It is an easy place to deploy significant amount of capital for managers. So, to that extent the big banks will continue to kind of do relatively fine. But more importantly specialised credit plays will do very-very well. Clearly with falling interest rates, especially NBFCs, HFCs will continue to do very well. Smaller banks again have a strong possibility of outperforming, especially smaller banks which have built a critical mass. So, this as a pack will do very well. And on the other hand businesses which are linked to capital markets, businesses linked to online insurance distribution or payments as a space will kind of demonstrate growth rates beyond the 20-25%. So, I would still believe that a portfolio approach works better. A combination or a bouquet of high-quality franchises within the financial space will continue to deliver market beating returns. ADVERTISEMENT What about your holdings when it comes to the entire capital market theme. Angel One is a stock that you have been bullish on, but that stock has not done all that much YTD in the last six months. Do you continue to hold and other than that capital markets what is looking good right now? Nilesh Shah: It has probably actually done relatively well in the last three to four months after a selloff that it had witnessed about 12 months ago. Clearly, a lot of the sell-off was based on a lot of the measures that were taken to bring slightly more kind of calmness in the derivatives market and some of the other regulations which were introduced or policy tweaks which were introduced to ensure that capital markets become a more efficient and a more safer place for investors and traders. So, as a reaction to that, some of the capital market oriented companies did kind of get impacted. But we clearly believe all that is behind us. Valuations are still reasonable especially for the online investment platform. Just to talk about Angel One, yes, we continue to own it. We have been owning it for a long time and we intend to kind of keep owning it. Just to put things in perspective, very recently Groww got valued by private equity players at a significant premium to essentially what some of the other publicly listed online trading platforms are trading at. So, it just shows what long-term investors are looking at as far as this category goes, as far as this space goes. So, to that end, it continues to make sense to own some of the market beating leaders out there. (You can now subscribe to our ETMarkets WhatsApp channel)
Time of India
24-06-2025
- Business
- Time of India
GST 2.0 and infra push could power India's next growth phase: Nilesh Shah
"You have seen the reaction to gold prices , to crude oil prices . All of this we seem to be getting into kind of an environment of moderate inflation , subdued inflation, that has traditionally always been a challenge or a pain for India. So, clearly, honestly from a sentiment point of view and the emerging macro fundamentals, this is a great situation to be in," says Nilesh Shah , MD & CEO, Envision Capital . You have a reputation that when you come on air you will give multibagger ideas and the ideas what you give they may make money, that is the reputation you have earned. So, what do we start with market view or straight off to multibagger ideas? Nilesh Shah: I do not know about the multibagger ideas, but yes, today's interaction could not have been on a better day that when truce has been announced, ceasefire has been announced. At least it puts to rest any of the kind of geopolitical issues or tensions which probably the market had, got reflected a bit of that yesterday but thankfully today we are back to pretty much like business as usual or back to normal. And it honestly augers very well for the market. It augers well for India. You have seen the reaction to gold prices, to crude oil prices. All of this we seem to be getting into kind of an environment of moderate inflation, subdued inflation, that has traditionally always been a challenge or a pain for India. So, clearly, honestly from a sentiment point of view and the emerging macro fundamentals, this is a great situation to be in. They say good news and good price rarely comes together. Are we reaching what could be called as peak of good news because frankly there is nothing to really get worried about. Tariff seems to be getting settled. Interest rates have come down. Liquidity has increased. Promoter deals are back. What else could take the market higher? What could be the trigger because everything now what we wanted suddenly you have it on in front of you? Nilesh Shah: So, yes, from a pure macro and especially external macros, probably a lot of good news is out there. It is more about now what we do in terms of our own internal policy measures, economic reforms, and I am not talking of the big bang reforms, but just a few things could pretty much further not just the sentiment but also further lift up the fundamentals and contribute to earnings growth, I clearly believe something that we really need to look forward to and watch out for in 2025 is clearly going to be the GST 2.0, I mean that is something which has been in the works in terms of enough of reports out there in the media that the government is looking to now take GST to the next level whether it is in terms of cut in tax rates or whether it is in terms of rationalising taxes or reducing tax slabs and ease of implementation, all of that, I clearly believe that that is something which is probably less spoken about, less appreciated but I actually believe that is going to be very-very powerful, so that is one. Live Events And two is upping up the spend on infra. I mean, this financial year the spend on infra pack was kind of pretty much at 3% which was in line with what it was last financial year. But there is room for that to kind of go up. I clearly do not think we have seen any peak of spending on infrastructure, till we get to at least 5% to 6% of the GDP which itself is growing. So, I probably believe that in the next few years you will probably see infra spend probably double or maybe even go even higher than that. So, these are some of the things which will continue to be very-very big growth drivers. These are things which will basically encourage businesses to grow and expand. So, on the whole, yes, apart from the global macros, I also believe our own domestic macros, policy measures, there is still lot of room for many things to happen. When we interacted last, I remember you had a view on it wherein you said you were positive on the space. You also said that if Infosys corrects a further 10-20%, it would start looking like an attractive buy. Now with everything that has been happening globally, especially since Accenture's numbers have come, is that challenging your view on it at all? Nilesh Shah: No, I do not think because ultimately… I mean, this is a space, especially the largecap it has basically just been growing in about single digit. I believe that for a growth market like India where we have so many other growth options, unless you are essentially hugging the benchmark or want just basically the basic kind of largecap market returns, honestly as a bottom-up investor you probably do not have a compelling reason to be in largecap IT. It might be a good place to hide when there is enough correction and these are anyway very capital efficient companies and strong on governance as well. But beyond that, there is really nothing significant to really look out for. So, even in good times they were growing in single digits. If the US economy were to get challenged, global economies were to get challenged, even trying to grow in high single digit could be a huge-huge challenge for the big IT companies. Of course, pockets remain in the midcap, smallcap IT space where they are specialising in specific domains, those kind of opportunities can remain, but otherwise the big IT companies, the best is behind them. What about your view on the entire alcobev space? You have been positive on that space. We have not seen much happen on that front as well. Are you still looking positive there? Nilesh Shah: Oh, absolutely. I mean, that has clearly been one of the strongest growth bastions that India has in the consumption space. Clearly post covid over the last five years the whole wave of premiumisation has caught on to the alcobev space. Indian companies have been hugely successful in being able to launch brands which essentially have got well received by consumers and Indian alcobev companies are only increasing their relevance to an ever growing consumer base in India. So, I still think it is still early on. We are still very early on in terms of matrices like our per capita consumption and individual players continue to be on the journey of premiumisation which is driving their realisations, revenues, margins, cash flows. So, I still believe that the sector itself, the category itself still has many-many years to go.
