Edited excerpts from a chat:
Given your emphasis on the BMV (Enterprise mannequin + moat + valuation) framework, how are you making use of it at present in gentle of the time correction that the Indian fairness market has seen in 2025?
Amidst the time correction, the broader indices have proven resilience, with the Nifty50 up 4.5% in October, supported by wholesome macro indicators equivalent to a producing PMI of 59.2, rising GST collections, and regular credit score development. The RBI has maintained a impartial stance, holding the repo price unchanged at 5.5%, aiming to stability development and stability. On this context, the BMV framework continues to information our strategy, with emphasis on potential earnings development, high quality of administration, and valuation self-discipline, alongside a bottom-up technique to establish firms with superior and sustainable earnings development. With earnings momentum steadily enhancing and macro fundamentals intact, the main target stays on companies with strong fashions, sustainable moats, and affordable valuations, notably in sectors the place earnings visibility is enhancing.
Whenever you discuss “moat” within the BMV framework, which sectors or firms in India at present meet that definition for you, and that are you avoiding?
Moat stands for sustainable aggressive benefit. Whereas it usually applies to firms, there are additionally sure sectors the place India could have an edge over world friends because of entry to low-cost sources, expertise, or expertise. In that sense, all our portfolio firms possess a moat of some kind. A typical instance is massive non-public banks, which have efficiently decreased their price of funds relative to rivals by means of expertise, introducing financial savings merchandise, and sustaining wage accounts with massive firms, giving them entry to a big pool of low-cost funds. Equally, metallic firms in India, with entry to high-quality sources at affordable costs, are examples of sustainable aggressive benefit. A few of these metallic producers are among the many lowest-cost producers globally. Excessive-moat companies, in consequence, are likely to generate excessive RoEs over time.
How do you learn the Q2 earnings season at a broad stage, and the way has that modified your portfolio?
The Q2 FY26 earnings season has began on an encouraging word, with outcomes from 216 firms within the Nifty 500 displaying round 9% year-on-year development in each gross sales and revenue after tax. The info displays stronger-than-expected traction in capex-driven sectors equivalent to capital items, infrastructure, and industrials. There has additionally been a notable enchancment in non-public capex developments and order inflows. In banking, regardless of the autumn in repo charges, margin compression has been restricted, and credit score development stays wholesome, supported by festive-season demand and GST rationalization. The general takeaway is that the market is witnessing early indicators of restoration, that are anticipated to maintain into the second half of FY26.
Between massive non-public banks, small non-public banks, and PSU banks, which one do you suppose will outperform in 2026?
Early earnings developments point out that enormous non-public banks have maintained sturdy operational efficiency with restricted margin compression and continued mortgage development. PSU banks have additionally proven enchancment, aided by higher mortgage development and decrease credit score prices. Primarily based on this, the relative energy seems stronger in massive non-public and PSU banks.
The place do you see thematic alternatives for the subsequent 12–18 months?
We consider home consumption stays a shiny spot. A mixture of GST price cuts, benign inflation, and monsoon is more likely to help demand. Moreover, the upcoming eighth Central Pay Fee’s wage revision in early 2026 is anticipated to supply an additional increase by growing family incomes. This stimulus, mixed with sturdy authorities and personal capital expenditure, makes themes round consumption, infrastructure, and capital items favorable areas for the approaching 12 months.
2025 is essentially the 12 months of time correction. Do you see the tide handing over favor of bulls in 2026, given a number of triggers?
Pushed by macro resilience, sturdy home demand, and international inflows, Indian markets have seen a broad-based restoration over the previous few weeks. The near-term funding state of affairs stays constructive, supported by revived commerce optimism following constructive information round a possible India–US commerce deal, coverage continuity, and strong capex developments. For the reason that underlying financial setup and liquidity circumstances stay favorable, market sentiment is probably going to enhance in 2026. Nevertheless, commerce negotiations and geopolitical developments stay essential variables to observe.
The efficiency of huge IPOs hitting Dalal Avenue in 2025 has been blended. How do you assess the standard of those new-age listings from a long-term wealth-creation lens, and are you discovering any real worth amid the frenzy?
We have now averted most IPOs because of unrealistic development expectations and really excessive valuations. In distinction, we’re discovering superior alternatives in current listed firms, the place the risk-reward profile seems extra favorable.
International traders appear to be aggressively taking part in main issuances whereas concurrently offloading positions within the secondary market — what, in your view, explains this divergence in FII habits, and does it mirror a structural shift in how world capital is approaching Indian equities?
What we now have noticed over time is that if fundamentals and risk-reward are proper, capital finally follows. The one query is whether or not it occurs with a lead or a lag.
