Arora said he expects the latest West Asia conflict to cool down after reports that the US sought a ceasefire through intermediaries. While oil prices may not fall as sharply as before, he believes markets will gradually look beyond geopolitical developments.
He added that markets are quick in discounting these things once there is evidence of de-escalation.
Arora said Helios Capital continues to avoid the IT services sector because the challenge goes beyond market sentiment.
“There are two kinds of uncertainties in the world. One is market uncertainty, and one is business uncertainty,” he said. “Our guys are buying market uncertainty, not realising it’s a business uncertainty.”
Arora argued that AI-driven revenue growth is coming at the expense of traditional IT services rather than adding to overall growth. He said investors are focusing too much on quarterly beats despite weak revenue expansion.
He also questioned the investment case for companies growing at low single-digit rates despite lower valuations.
“If you say I will grow 1% and then you grow 1.5%… how does it matter beyond 30 minutes?” Arora said, adding that investors should focus on businesses capable of delivering double-digit growth.
Instead, Helios Capital is increasing its exposure to India’s listed new-age companies. Arora said traditional investors should spend more time understanding businesses that are creating new markets instead of focusing on short-term fluctuations in established sectors.
Helios Capital currently owns stakes in companies including Eternal, Paytm, Groww, Shadowfax, Delhivery, CarTrade and PhysicsWallah. Arora said these companies are building new businesses and deserve deeper analysis despite many of them still reporting losses.
Arora said that the investment in HDFC Bank has disappointed over the past five years, but the stock now looks inexpensive. However, he is not increasing exposure until there are clearer signs of improvement in growth and performance.
For the full interview, watch the accompanying video
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