Samir Arora on Market Rally Expectations: DIIs, Platform Plays and 2026 Outlook
Helios Capital's Samir Arora believes markets need a rally before worrying about DII allocation issues, preferring new-age platform companies and businesses with year-to-year visibility over long-duration government themes. He remains constructive on 2026 prospects with stabilising FII flows.
*this image is generated using AI for illustrative purposes only.
Samir Arora, Founder of Helios Capital, believes India's equity markets should welcome strong domestic institutional investor flows rather than worry about allocation constraints, dismissing concerns around "too much money chasing too few stocks" as premature ahead of a broader market rally expected in 2026.
Markets Need Rally Before Allocation Concerns
Speaking to ET Now as part of an Outlook 2026 interaction, Arora argued that investors should focus on market performance rather than flow dynamics. "We worry about weak markets, not strong markets. Strong markets are meant to be enjoyed," he said, emphasizing that equity investing follows cyclical patterns with alternating phases of inflows and consolidation.
| Parameter: | Arora's View |
|---|---|
| DII Flow Concerns: | Premature without rally first |
| Market Approach: | Enjoy strong phases, manage weak ones |
| Investment Cycle: | Inherently cyclical with inflow phases |
| Priority: | Rally first, allocation worries later |
Arora dismissed the idea that sustained DII inflows could become problematic if foreign institutional investor selling tapers, noting that market performance must be viewed as a continuum rather than through selective timeframes.
Platform Companies Over Traditional Consumption Themes
Arora highlighted new-age platform companies as superior vehicles for capturing India's consumption growth compared to traditional consumer staples, where end-demand growth typically remains capped at high single digits. He emphasized that platforms benefit from channel shift rather than overall consumption expansion.
"These companies don't grow because the consumer is growing at 20%. They grow because the consumer is choosing a new channel. That penetration can rise sharply for years," Arora explained, citing digital payment platforms such as PhonePe and Paytm as examples.
| Sector Focus: | Rationale |
|---|---|
| Quick Commerce: | Channel shift-driven growth |
| Digital Payments: | Penetration-led expansion |
| Online Insurance: | Migration from offline channels |
| Traditional Staples: | Limited to single-digit growth |
Caution on Long-Duration Government Themes
On sectors such as railways and defence, Arora expressed skepticism about investment narratives built around long-duration government programmes. Helios Capital prefers businesses with year-to-year earnings visibility rather than companies dependent on multi-decade execution cycles.
While acknowledging that defence offers some visibility due to government-led localisation, Arora said the firm avoids companies tied to 10- or 15-year projects with uncertain execution timelines. Among defence names, Helios holds Bharat Electronics, citing its diversified, recurring order flow rather than dependence on single large programmes.
Financials Performance and NBFC Leadership
Addressing perceptions that financials have underperformed, Arora noted that non-bank lenders have delivered strong returns in recent periods. Rate cuts have particularly favoured NBFC margins, supporting outperformance in this segment.
| Financial Segment: | Performance Status |
|---|---|
| NBFCs (Bajaj Finance, Cholamandalam): | Strong outperformance |
| Public Banks (SBI): | Reasonable performance |
| Private Banks (HDFC, Axis): | Decent returns |
| ICICI Bank: | Relative underperformance |
Arora attributed ICICI Bank's relative weakness to management succession concerns rather than fundamental issues, while highlighting that stocks such as Bajaj Finance, Cholamandalam Investment, and Shriram Finance have significantly outperformed.
Selective Auto Exposure Strategy
On automobiles, Arora revealed that Helios is currently avoiding original equipment manufacturers and instead prefers auto ancillary plays. The firm was an anchor investor in Ather Energy, reflecting its preference for selective exposure rather than broad bets on passenger or commercial vehicle cycles.
Constructive 2026 Outlook
Arora remains optimistic about Indian equities for 2026, particularly if foreign investor selling stabilises and earnings visibility improves. He believes platform-led consumption, select financials, and businesses with clear year-to-year growth drivers offer better risk-reward profiles than theme-based or execution-heavy sectors.
"We want visibility, scalability and changing consumer behaviour—not 15-year promises," Arora concluded, emphasizing his preference for businesses with demonstrable near-term growth catalysts over long-duration thematic plays.
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