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Time of India
25-07-2025
- Automotive
- Time of India
Helios is avoiding auto and consumer stocks for now; Dinshaw Irani explains why
Dinshaw Irani , CEO, Helios Mutual Fund , has a negative outlook on the auto sector , particularly PVs, due to EV competition and potential tariff implications. While seeing potential in new-generation EV two-wheeler players, he is wary of stretched valuations in consumer staples and QSRs. Additionally, concerns are raised about the durable goods sector, specifically AC sales, due to unfavorable weather conditions impacting performance. What is your view on auto and auto ancillaries? The India-UK FTA has been signed and there are a lot of products which we are eyeing but in particular, India is planning to lower tariffs on UK cars and to cut average tariff for UK goods to 3% from 15% earlier. What is your view on the automobile sector and not just on this news flow but also the fact that the auto sector is trying to help the market quite a lot? Dinshaw Irani : We do not like the auto space at all because we believe that the demand collapse was mainly driven by collapse in urban demand and the tight liquidity condition. But even going forward with liquidity coming into the system, we do not expect that sector to do well because now there are more options available in that segment. We are talking about basically EVs and frankly the EVs bet is playing out in the two-wheeler space. We feel the two-wheeler segment got robbed over by EV guys. Their growth just disappeared because of EV coming into play. 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One saw a recent listing where we were the anchor and we continue to invest in that stock. The second one is an old hand which was listed last year, corrected a lot and that is also looking very exciting going forward. Given the fact that the management is now revamping the whole show out there, that is another sector to look at in the EV space. In the PV space, I do not think there has been any EV onslaught as of now. But once they do, and frankly, that is what the Trump tariffs are all about. If anything, they are targeting this segment per se. We saw that happening with the UK FTA. Finally, we had to come down to cutting off duties on the automobile space. The same is going to happen with the US. If the deal goes through, there has to be a big compensation for the auto space. So, we are not too keen on the auto space, specifically the PV space. Let us talk about the consumption space because on the staples side, the Q1 updates so far were decent enough to take the stocks higher and the consumer companies are now talking about the recovery in the urban areas which was not the case earlier. What do you make of this and how can investors take a part in the consumption basket, because discretionary as a play has been liked by a lot of these market participants? What is your take on discretionary versus staples and if at all, do you like the space at all? Dinshaw Irani: Though an uptick has happened in staples, look at the valuations of these stocks, They are already fairly stretched. Even in the QSR space, which we used to like earlier, apart from probably one particular pizza player, none of the others have reported good numbers. QSRs are basically impulse spends. But that also not picking up means consumption has not kicked in that much. Live Events You Might Also Like: Best-case scenario is a time correction in market; rebound possible in Q2: Dinshaw Irani A particular company which came out with its numbers, said salt has been a mainstay for them and that growth points out to the growth in entry-level staples. It will be a matter of time before the premium end starts moving up. Frankly looking at the valuations, we are not excited at all. I mean, giving 50-60 PEs, forward PEs for growth rates of 10-11% in the best case scenario, is not going to work for us. So, we would rather avoid these stocks. In the durable space again, AC is a big player within that but AC is a play on weather and this time around the numbers are not looking too great for the AC players. We have seen that one of the players that reported the numbers did not do too well in air conditioning and I do not think that is what we are looking at either. Last time we interacted with you, BFSI, hospitals, and tourism were the spaces that you were liking. Does that conviction continue? Dinshaw Irani: Yes, definitely. I do not think we have been shaken there. The numbers are pretty good for the two major banks reporting the numbers. They have been taken very well by the market. The quality of asset growth has been good. It is obvious that things are working out perfectly for them. On the financial services and insurance numbers, whatever little has been reported by AMCs and the like, have been good numbers and so that continues to be good. When the numbers are reported, we will see that the whole story about the average revenue per occupied bed, arPob as they are called, are on the uptake. As a result, the breakeven levels for new hospitals have come off and that is what we are looking at. The same is the case with hospitality which is again looking good. Indian Hotels numbers were pretty decent. So that trend continues for us. 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Economic Times
25-07-2025
- Automotive
- Economic Times
Helios is avoiding auto and consumer stocks for now; Dinshaw Irani explains why
Dinshaw Irani, CEO, Helios Mutual Fund, has a negative outlook on the auto sector, particularly PVs, due to EV competition and potential tariff implications. While seeing potential in new-generation EV two-wheeler players, he is wary of stretched valuations in consumer staples and QSRs. Additionally, concerns are raised about the durable goods sector, specifically AC sales, due to unfavorable weather conditions impacting performance. ADVERTISEMENT What is your view on auto and auto ancillaries? The India-UK FTA has been signed and there are a lot of products which we are eyeing but in particular, India is planning to lower tariffs on UK cars and to cut average tariff for UK goods to 3% from 15% earlier. What is your view on the automobile sector and not just on this news flow but also the fact that the auto sector is trying to help the market quite a lot? Dinshaw Irani: We do not like the auto space at all because we believe that the demand collapse was mainly driven by collapse in urban demand and the tight liquidity condition. But even going forward with liquidity coming into the system, we do not expect that sector to do well because now there are more options available in that segment. We are talking about basically EVs and frankly the EVs bet is playing out in the two-wheeler space. We feel the two-wheeler segment got robbed over by EV guys. Their growth just disappeared because of EV coming into play. In two-wheelers, we like the new generation EV players which are coming in. One saw a recent listing where we were the anchor and we continue to invest in that stock. The second one is an old hand which was listed last year, corrected a lot and that is also looking very exciting going forward. Given the fact that the management is now revamping the whole show out there, that is another sector to look at in the EV space. In the PV space, I do not think there has been any EV onslaught as of now. But once they do, and frankly, that is what the Trump tariffs are all about. If anything, they are targeting this segment per se. We saw that happening with the UK FTA. Finally, we had to come down to cutting off duties on the automobile space. The same is going to happen with the US. If the deal goes through, there has to be a big compensation for the auto space. So, we are not too keen on the auto space, specifically the PV space. Let us talk about the consumption space because on the staples side, the Q1 updates so far were decent enough to take the stocks higher and the consumer companies are now talking about the recovery in the urban areas which was not the case earlier. What do you make of this and how can investors take a part in the consumption basket, because discretionary as a play has been liked by a lot of these market participants? What is your take on discretionary versus staples and if at all, do you like the space at all? Dinshaw Irani: Though an uptick has happened in staples, look at the valuations of these stocks, They are already fairly stretched. Even in the QSR space, which we used to like earlier, apart from probably one particular pizza player, none of the others have reported good numbers. QSRs are basically impulse spends. But that also not picking up means consumption has not kicked in that much. A particular company which came out with its numbers, said salt has been a mainstay for them and that growth points out to the growth in entry-level staples. It will be a matter of time before the premium end starts moving up. Frankly looking at the valuations, we are not excited at all. I mean, giving 50-60 PEs, forward PEs for growth rates of 10-11% in the best case scenario, is not going to work for us. So, we would rather avoid these stocks. ADVERTISEMENT In the durable space again, AC is a big player within that but AC is a play on weather and this time around the numbers are not looking too great for the AC players. We have seen that one of the players that reported the numbers did not do too well in air conditioning and I do not think that is what we are looking at either. Last time we interacted with you, BFSI, hospitals, and tourism were the spaces that you were liking. Does that conviction continue? Dinshaw Irani: Yes, definitely. I do not think we have been shaken there. The numbers are pretty good for the two major banks reporting the numbers. They have been taken very well by the market. The quality of asset growth has been good. It is obvious that things are working out perfectly for them. ADVERTISEMENT On the financial services and insurance numbers, whatever little has been reported by AMCs and the like, have been good numbers and so that continues to be good. When the numbers are reported, we will see that the whole story about the average revenue per occupied bed, arPob as they are called, are on the uptake. As a result, the breakeven levels for new hospitals have come off and that is what we are looking at. The same is the case with hospitality which is again looking good. Indian Hotels numbers were pretty decent. So that trend continues for us. (You can now subscribe to our ETMarkets WhatsApp channel)
Economic Times
28-04-2025
- Business
- Economic Times
FIIs are back but retail has started selling; stay cautious on auto, IT & FMCG: Dinshaw Irani
Dinshaw Irani, CEO, Helios Mutual Fund, says Foreign Institutional Investors (FIIs) have returned to the Indian market, injecting $3.5-4 billion, signaling active investment. This inflow contrasts with US debt ETF outflows, suggesting a reversal of funds previously moved from India. Concerns remain about high valuations, and retail selling is impacting mid and small-cap performance. Irani remains cautious about auto, IT and certain pockets within consumer space like paints as well as FMCG Help us with your take on the markets because the months gone by have been great for the Indian markets, at least the FIIs have made a comeback. The earnings, especially the kind of disappointment within the IT companies, with the valuations coming to the forefront and investors seem to be liking it. What is your overall mood on the market given that we have already seen a good run-up from those March lows? Dinshaw Irani: The fact is FIIs are back. In the last two weeks, they had pumped in something like $3.5-4 odd billion into the market and the flow was very sustainable because if you look at the emerging market ETFs or India dedicated ETFs, they have not seen much flows. Basically, what this is hinting towards is that this is active money that is coming back and that is quite surprising. If you relate it to what has happened in the US, the US debt ETFs have seen huge outflows. Basically, the money which had moved out of India had gone back to the US because they were worried about valuations, about the rupee, and the fundamentals. So, that money went back to the US, parked itself there and that is what is coming back. The fact is the US per se is now coming under a big question mark. US President Donald Trump has been backtracking a bit and fortunately for the world as such, since he is more worried about the equity markets and it is obvious because twice he has backtracked on big calls that he made in the market. One was obviously the tariffs, once the markets started collapsing, he had to backtrack on those and he gave a 90-day reprieve. Secondly, Trump has been after the Fed chair Jerome Powell, and when the markets went down, he backtracked on that. So, there is some sense prevailing out there, but frankly, it is still too early to call it out. Secondly, the bigger problem is the India valuations. The quarter went by which is now getting reported. The numbers are not that exciting and valuations are feeling a bit stretched because from now on, you will see cuts in earnings which are already happening. Most of the numbers that got reported saw a cut in earnings and that is where the concern is. Frankly, we are just being a bit cautious. We are fully invested though. We have some cash – 3-4% – in a couple of funds, but otherwise we are fully invested. In my long-short fund, we are 61-62% net and ready to pull the big trigger whenever there is a pullback. We have seen Trump actually easing a bit on his rhetoric. Are you happy that this weekend you did not have to wake up to some new rhetoric by him? Was it an easy Monday morning so far for us? Dinshaw Irani: Yes, it was, but the India-Pakistan tension is yet to play out. There something may happen and maybe that will impact the markets. But looking at the past, whenever these events have happened, the markets have only rallied up. Our Indian markets are much more resilient to this. But now the only unfortunate part is the valuations, that is where the concern arises. I do not know how many of you have noticed this but there has been a constant selling by retail I believe in the markets and that is why the midcap and smallcap space has been fairly weak as compared to the largecaps. The largecaps have held up quite appreciably and that is where the major cuts are happening because the IT pack gave a totally disappointing set of numbers. There was a relief rally out there, but I do not think that is sustainable. So, there are quite a bit of question marks right now. You mentioned some sort of a selling pressure coming from the retail investors. No doubt, month-to-date you have a buy figure coming in from the FIIs. But the retail investors getting a bit jittery is a cause of concern. As you mentioned, the valuations are a bit stretched. Where are you looking for value right now given that we have seen a sharp fall, then a rapid rise. Now you are struggling to go ahead and allocate funds, isn't it? Dinshaw Irani: Yes, definitely, because we have our comfort zones. One big comfort zone for us has always been the financial, the BFSI space and we have seen results out there. If anything, they have done fairly well, apart from microfinance and some of the NBFCs reporting disappointing numbers. The bulk of the reportage from that particular segment has been fairly strong, that is one area that we are very comfortable with. Secondly, a set of numbers are yet to be reported by the hospitality sector, and that is going to be a surprise because if you are tracking that sector on the ARR basis, they have been fairly exciting. The numbers are fairly high YoY also. Again, having talked about hospitality, let us talk about hospitals, the healthcare sector. That is another area where we are comfortable with and that is going to report very good numbers going forward. These are the specific areas we are comfortable with and where we are trying to park our money. Which are the pockets that are not looking that great to you because I just cannot get over the fact that at a point when Tata Motors was hitting around Rs 1,000, you guys came ahead and made a short call on not just Tata Motors but the overall auto space was not looking that exciting to you. At this point in time when you are having a cautious stance on the market which sectors are you betting big on? Dinshaw Irani: We remain negative on the auto space. You saw the numbers from Maruti. You heard the commentary from the management. The only space that looks good right now in the auto space is probably the SUV space and unfortunately that is what the US is targeting for India. That is where they want to send their cars in and at zero duties and stuff like that. That will create a lot of competition going forward. EV has been a big disruptor anyways in that space. The second space that we do not like and have been negative for the last probably two-three months is probably IT. Except for some pockets here and there, IT is going to be a major sufferer of what is happening in the US. There is a slowdown building in and that is what the world is betting on today. If you look at the way the bond markets have been reacting in the US, it is obvious that they are looking at a slowdown going forward and if that happens, IT is a big loser because the US market is their biggest clientele. Secondly AI will play a big role in disrupting the existing model of IT, and so that is another reason why we are so negative on IT today. It is better to stay away from that segment. Certain pockets within consumer space like paints, we do not see much growth possibility. I do not think that the rally in paints space is going to sustain given the way the dynamics of the Indian economy today. And of course, FMCG where the valuations are again stretched. There was some amount of uptrading happening, but that has also stopped. I do not think that area is looking good. So, these are a few areas we are very cautious about.
Time of India
28-04-2025
- Business
- Time of India
FIIs are back but retail has started selling; stay cautious on auto, IT & FMCG: Dinshaw Irani
Dinshaw Irani , CEO, Helios Mutual Fund , says Foreign Institutional Investors (FIIs) have returned to the Indian market, injecting $3.5-4 billion, signaling active investment. This inflow contrasts with US debt ETF outflows, suggesting a reversal of funds previously moved from India. Concerns remain about high valuations, and retail selling is impacting mid and small-cap performance. Irani remains cautious about auto, IT and certain pockets within consumer space like paints as well as FMCG Help us with your take on the markets because the months gone by have been great for the Indian markets, at least the FIIs have made a comeback. The earnings, especially the kind of disappointment within the IT companies, with the valuations coming to the forefront and investors seem to be liking it. What is your overall mood on the market given that we have already seen a good run-up from those March lows? Dinshaw Irani: The fact is FIIs are back. In the last two weeks, they had pumped in something like $3.5-4 odd billion into the market and the flow was very sustainable because if you look at the emerging market ETFs or India dedicated ETFs, they have not seen much flows. Basically, what this is hinting towards is that this is active money that is coming back and that is quite surprising. If you relate it to what has happened in the US, the US debt ETFs have seen huge outflows. Basically, the money which had moved out of India had gone back to the US because they were worried about valuations, about the rupee, and the fundamentals. So, that money went back to the US, parked itself there and that is what is coming back. The fact is the US per se is now coming under a big question mark. US President Donald Trump has been backtracking a bit and fortunately for the world as such, since he is more worried about the equity markets and it is obvious because twice he has backtracked on big calls that he made in the market. One was obviously the tariffs, once the markets started collapsing, he had to backtrack on those and he gave a 90-day reprieve. Secondly, Trump has been after the Fed chair Jerome Powell, and when the markets went down, he backtracked on that. So, there is some sense prevailing out there, but frankly, it is still too early to call it out. Secondly, the bigger problem is the India valuations. The quarter went by which is now getting reported. The numbers are not that exciting and valuations are feeling a bit stretched because from now on, you will see cuts in earnings which are already happening. Most of the numbers that got reported saw a cut in earnings and that is where the concern is. Live Events You Might Also Like: Uri or Balakot style, India-Pakistan clash can't be ruled out; may impact stock markets, economies: Swaminathan Aiyar Frankly, we are just being a bit cautious. We are fully invested though. We have some cash – 3-4% – in a couple of funds, but otherwise we are fully invested. In my long-short fund, we are 61-62% net and ready to pull the big trigger whenever there is a pullback. We have seen Trump actually easing a bit on his rhetoric. Are you happy that this weekend you did not have to wake up to some new rhetoric by him? Was it an easy Monday morning so far for us? Dinshaw Irani: Yes, it was, but the India-Pakistan tension is yet to play out. There something may happen and maybe that will impact the markets. But looking at the past, whenever these events have happened, the markets have only rallied up. Our Indian markets are much more resilient to this. But now the only unfortunate part is the valuations, that is where the concern arises. I do not know how many of you have noticed this but there has been a constant selling by retail I believe in the markets and that is why the midcap and smallcap space has been fairly weak as compared to the largecaps. The largecaps have held up quite appreciably and that is where the major cuts are happening because the IT pack gave a totally disappointing set of numbers. There was a relief rally out there, but I do not think that is sustainable. So, there are quite a bit of question marks right now. You mentioned some sort of a selling pressure coming from the retail investors. No doubt, month-to-date you have a buy figure coming in from the FIIs. But the retail investors getting a bit jittery is a cause of concern. As you mentioned, the valuations are a bit stretched. Where are you looking for value right now given that we have seen a sharp fall, then a rapid rise. Now you are struggling to go ahead and allocate funds, isn't it? Dinshaw Irani: Yes, definitely, because we have our comfort zones. One big comfort zone for us has always been the financial, the BFSI space and we have seen results out there. If anything, they have done fairly well, apart from microfinance and some of the NBFCs reporting disappointing numbers. The bulk of the reportage from that particular segment has been fairly strong, that is one area that we are very comfortable with. You Might Also Like: F&O Talk | Sharp rally in sight for Nifty above 24,380, Bank Nifty may resume uptrend beyond 55,600: Sudeep Shah Secondly, a set of numbers are yet to be reported by the hospitality sector, and that is going to be a surprise because if you are tracking that sector on the ARR basis, they have been fairly exciting. The numbers are fairly high YoY also. Again, having talked about hospitality, let us talk about hospitals, the healthcare sector. That is another area where we are comfortable with and that is going to report very good numbers going forward. These are the specific areas we are comfortable with and where we are trying to park our money. Which are the pockets that are not looking that great to you because I just cannot get over the fact that at a point when Tata Motors was hitting around Rs 1,000, you guys came ahead and made a short call on not just Tata Motors but the overall auto space was not looking that exciting to you. At this point in time when you are having a cautious stance on the market which sectors are you betting big on? Dinshaw Irani : We remain negative on the auto space. You saw the numbers from Maruti. You heard the commentary from the management. The only space that looks good right now in the auto space is probably the SUV space and unfortunately that is what the US is targeting for India. That is where they want to send their cars in and at zero duties and stuff like that. That will create a lot of competition going forward. EV has been a big disruptor anyways in that space. The second space that we do not like and have been negative for the last probably two-three months is probably IT. Except for some pockets here and there, IT is going to be a major sufferer of what is happening in the US. There is a slowdown building in and that is what the world is betting on today. If you look at the way the bond markets have been reacting in the US, it is obvious that they are looking at a slowdown going forward and if that happens, IT is a big loser because the US market is their biggest clientele. Secondly AI will play a big role in disrupting the existing model of IT, and so that is another reason why we are so negative on IT today. It is better to stay away from that segment. You Might Also Like: Top-performing India fund sounds caution on stocks, raises cash Certain pockets within consumer space like paints, we do not see much growth possibility. I do not think that the rally in paints space is going to sustain given the way the dynamics of the Indian economy today. And of course, FMCG where the valuations are again stretched. There was some amount of uptrading happening, but that has also stopped. I do not think that area is looking good. So, these are a few areas we are very cautious about.
