Irani said, “We keep adding to the positions where we have heavy conviction, which is obviously our new-age companies, where we are totally very clear that there’s a structural growth story playing out, even though they have exponential valuations, but the exponential growth justifies that valuation. So that’s one segment.”
The domestic investor flows have remained resilient, giving the fund house room to keep adding to stocks where it has high conviction.
Irani said the fund has been increasing exposure to select auto ancillary companies, which he views as precision engineering businesses with strong global demand. He expects these companies to benefit from the growing number of free trade agreements (FTAs) and sees them gaining greater visibility as global opportunities expand.
The strengthening of the yuan against the Indian rupee has also improved the competitiveness of Indian companies compared with Chinese suppliers, Irani said. This could benefit Indian manufacturers as companies globally continue to explore China-plus-one strategies.
Irani said Helios Mutual Fund has added names such as Sona BLW Precision, while remaining selective within the broader auto ancillary space.
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A major attraction of the precision engineering segment is the stickiness of customer relationships. Irani said it can take several years for companies to establish themselves as suppliers, particularly in sectors such as aviation. Once a company wins a major customer, the relationship can result in recurring orders for several years.
The fund house is also positive on the logistics segment, particularly companies that are positioned to benefit from the growth of e-commerce and quick commerce.Irani said logistics businesses act as key enablers for new-age companies and could benefit from rising consumption among younger consumers. He specifically pointed to companies such as Delhivery and Shadowfax as beneficiaries of the expansion in e-commerce and quick-commerce activity.
On HDFC Bank, Irani said Helios has increased its position, although the holding remains below benchmark levels. He said the bank’s challenges cannot be attributed solely to a change in leadership and highlighted the need to address issues around its traditional lending businesses, CASA deposits, net interest margins and fee income.
Irani said a change in leadership could improve sentiment around HDFC Bank, but the longer-term opportunity would depend on how the bank addresses these operational and structural issues.
For full interview, watch accompanying video
