Are not new-age companies expensive and now they are struggling also? Zomato, there is competition. For Policy Fintech, new platforms are getting created by existing insurance companies. Paytm is out of the woods, but it is still an issue, how much more they can make. So, when you say new-growth companies, what do you like there?
Dinshaw Irani: So, basically, all these guys you talked about is what we have in our portfolio. We like them. Having talked about that quick commerce is the only area where you are seeing competition coming in for the likes of a Zomato or Eternal if you will. But the fact is that even in quick commerce, I mean you have seen the competition.
They have been cutting off people. They have been cutting back on their expenses. So, if you take the example of a Meituan in China, it seems like it is a not exactly a winner take all, but winner wins it all kind of market.
So, that is what we are playing on in India and hopefully, Eternal being a stronger candidate out here and Zepto being a new kid on the block, the (7:40) are very much in favour of Eternal.
Having said that, I am not calling out any buy call out here. I mean, we are invested in this. So, we are quite comfortable with the valuations, even looking at the future. Secondly, the likes of the fintech companies. Again, you may say that the issues are still overhang, yes, it is but look at the way that company has come out of all the mess that it had gone through.
I mean, if anything the comfort that we take away is that there is a strong management in place and obviously, fintech is the way forward per se because these are the guys who are going to be the future in the country and we have seen that across the globe per se, so that is why we are comfortable with these kind of names.
So, apart from that we have names in auto space which are platform companies. We have names in pharma which are platform companies. So, it is not only these three that you mentioned, we hve got a few others also.
Give us your latest take on autos because you have been bearish on the sector overall for quite some time now. But some experts are highlighting that maybe it is time to look at the two wheelers. Do you agree with that view and overall, how do you see the demand trend shaping up, any pocket that is looking attractive?
Dinshaw Irani: So, actually, we are. I mean, we have been forever fairly negative on auto space, two-wheeler in fact we turned very negative very early in life because we saw the EV really cannibalising the growth in demand in the two wheeler space, but I think that space has now stabilised and the stocks that we are in, we got only one two-wheeler stock which is into your entry-level two-wheelers, plus he has got a massive portfolio for exports, so that is where the comfort level lies and it is no secret actually it is Bajaj Auto because we already disclosed this in our portfolio per se and that is what we comfortable with because the tariff wars will finally start targeting the high-end, the premium bikes and stuff like that if at all it comes through per se. So, Bajaj has KTM, Bajaj has EV, Bajaj has three wheelers. I mean, they have a very different kind of a mix. So, I am just trying to understand that you like Bajaj Auto because the stock is down or they are gaining market share or you like their exports or you like their EV. What is the story in Bajaj Auto?
Dinshaw Irani: So, basically everything, I mean KTM is obviously one thing that they were supposed to acquire literally.
That is a minuscule part of their overall turnover. The bigger kicker here is the fact that EVs they have done fairly well. Secondly, they have entry-level two-wheelers which only one other competition is there and that also not that big.
It is big, but not that, it is gaining market share Bajaj Auto if anything and obviously the way the sops were given out in the budget, I think that has what triggered our view on Bajaj Auto and obviously, it is not 100% domestic, it is 50-50 literally, so 50 exports and there again Africa is doing fairly well for them, so I think that market has done fairly well.
So, there is an insulation happening, if India does not do well, other parts will do well, so that is what is making us go towards the likes of a Bajaj Auto.
But other than that, what has been your biggest key takeaway from the earning season, give us some sense that which sectors are looking great as a long-term story and which sectors are looking exciting to you and you would like to track more on the earnings front.
Dinshaw Irani: So, definitely, I told you about our preferences. One area where we have been, I would not say underweight, we have remained there is defence. I think that area is looking fairly interesting, but unfortunately most of the stocks out there have gone through the roof in terms of valuations. I mean, peak valuations, not even peak, I mean they are way beyond the peaks that they earlier had and that is one area that we have been tracking fairly closely.
We always been calling out that India can be a sourcing base for defence. Globally the defence spends are moving up. I mean, with Trump coming in obviously the EU also has to start spending much more on defence per se and the only supplier can be a very friendly nation who does not show aggression and I think that is where we came from on defence.
But having said that, as I said, the valuations have gone through the roof so that is one area that we have been tracking fairly closely and if there is some semblance coming out and frankly, our call on the market also is a time correction, we do not see a price correction happening, we see a time correction happening and frankly that is needed for the market to digest what is happening under the sharp rally that one saw and obviously, no earnings growth kicking in, so you need to have some semblance coming through, so hopefully we will see some buying opportunities in that space going forward.
