Helios Mutual Fund Bets on EV Two-Wheelers, Cautious on IT and FMCG
Helios Mutual Fund's CEO Dinshaw Irani revealed portfolio strategy changes, adding a fourth two-wheeler company with focus on EV segment. The fund expresses caution on passenger vehicles due to demand uncertainty. It maintains a negative outlook on the IT sector, citing US business environment concerns and high valuations. FMCG sector is avoided due to growth concerns and high valuations. The fund favors the hospitality sector, expecting increased domestic tourism.
*this image is generated using AI for illustrative purposes only.
Dinshaw Irani, CEO of Helios Mutual Fund, recently shared insights into the fund's portfolio strategy, highlighting a shift towards the electric vehicle (EV) segment in the two-wheeler market while expressing caution on IT and FMCG sectors.
Expanding Two-Wheeler Portfolio
Irani revealed that Helios Mutual Fund is adding a fourth two-wheeler company to its holdings. This move underscores the fund's confidence in the two-wheeler segment, particularly in the growing EV space. The portfolio now includes:
- Two pure EV plays
- Bajaj Auto
- A newly added fourth two-wheeler company
This strategic expansion reflects the fund's bullish outlook on the EV transition in the two-wheeler market.
Cautious Stance on Passenger Vehicles
While bullish on two-wheelers, Irani expressed caution regarding the passenger vehicle segment. The fund's hesitancy stems from:
- Uncertainty in demand
- Potential overhangs in the market
Negative Outlook on IT Sector
Helios Mutual Fund maintains a negative stance on the IT sector, citing several concerns:
- Uncertainty in US business environment
- Tariff concerns
- Unclear impact of AI on the industry
Despite IT companies showing improved low single-digit growth guidance, Irani pointed out that they are trading at price-to-earnings (PE) ratios of 23-24 times. These valuations are higher than pre-COVID levels, even though growth prospects were better then.
FMCG Sector: Growth Concerns and High Valuations
The fund is currently avoiding the FMCG sector due to:
- Growth concerns
- High valuations
Irani noted that recent GST changes on FMCG products are unlikely to significantly boost consumption patterns.
Favoring the Hospitality Sector
In contrast to its cautious stance on IT and FMCG, Helios Mutual Fund favors the hospitality sector. The fund's positive outlook is based on:
- Expected increase in domestic tourism
- Potential redirection of consumer savings from GST benefits towards travel rather than consumer durables
Conclusion
Helios Mutual Fund's portfolio adjustments reflect a nuanced view of the current market landscape. By increasing exposure to the EV two-wheeler segment, maintaining caution on passenger vehicles and IT, avoiding FMCG, and favoring hospitality, the fund is positioning itself to capitalize on specific growth areas while mitigating risks in sectors facing headwinds or valuation concerns.
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