Mihir Vora, Chief Investment Officer at Trust Mutual Fund, believes that while the Indian economy has faced mid-term shocks, its long-term growth story remains resilient and intact. Speaking to Business Today on Thursday, the expert said the market has weathered challenges well and the focus now should be on sectors or companies that continue to deliver consistent earnings growth.
Weighing in on the global debate around Artificial Intelligence (AI)-linked stocks, which have been central to the US market rally, Vora highlighted growing investor concerns over valuations. “For the first time in many months, I am seeing a debate on whether valuations of tech stocks, especially AI-linked stocks, are entering a bubble territory or not,” he said. “In the last two to three days, we have seen some volatility because of that debate. A lot of the growth in AI is coming from circular deals — companies investing in each other — and a significant amount of debt is being raised to build data centers and AI processing capacity. Those assumptions are now being questioned in terms of whether such growth can be sustained.”
Vora noted that this emerging uncertainty in the US and Chinese markets could lead to near-term volatility, though he maintained that India’s growth fundamentals remain steady.
On the banking sector, Vora said he sees opportunities in both private and public sector banks. “Private sector banks used to grow far more compared to PSU banks, led predominantly by retail credit growth,” he said. “But now, MSME and corporate credit seem to be picking up, which gives PSU banks an advantage. The growth differential between PSU and private banks has reduced and I think there is juice in both segments.”
In the NBFC space, Trust MF continues to prefer the larger, more stable players. “We are sticking to some of the largest NBFCs, including those focused on retail and gold finance,” Vora said. “The gold finance NBFCs, in particular, are in a secular growth phase. In the small and mid-cap portion, we have selective exposure to affordable housing finance companies.”
On the IT sector, Vora said the fund’s approach remains selective and growth-oriented. “We tend to look at long-term, high-growth secular plays,” he explained. “In my view, the large-cap IT companies, if they continue with their current business models, will remain in the 5–11 per cent growth range. Our overall portfolio has a weighted average topline growth rate of around 30 per cent, and large-cap ITs don’t fit that profile.”
Instead, Trust Mutual Fund is focusing on mid-cap IT companies that have been demonstrating stronger growth trajectories. “We have two to three mid-cap IT names that are growing much faster than the large caps. That’s where we are betting on,” Vora said.
On the automobile sector, he added that the fund had recently increased exposure to four-wheeler OEMs following GST cuts, which “worked well for a while.”
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