'The Worst Of Times Is Over': Dinshaw Irani On What Could Move Markets Next- FIIs, Crude & More

追加: 2026-05-27

[00:00:00]Dinchoani, CEO of Helios Capital, joining in. Dincho, uh, you know, the last time we spoke, you were talking about joining the West Asia crisis to negotiate in your capacity as an Iranian. Uh, clearly it's not really going anywhere yet. We're hoping to close this negotiation soon, but as someone who looks at investment opportunity, are you feeling the tide turn?

[00:00:26]actually uh first of all thank you for having me on your show and a very good morning to you and your viewers. Uh so basically my negotiation skills were tested and didn't work out at all but anyway the fact >> I think you stick to your day job which is managing money.

[00:00:43]>> Yeah that's that's working out well. So but anyway having said that uh the fact is that look at the quarter which is uh not getting reported. I think 31st May is the last day for reporting and we've seen almost 90% plus of the market cap reporting. I'm talking about NC 500 right now and the numbers are very exciting. I mean the the the midcap earnings growth if you normalize uh for the loss companies turning into profits because that pulls up the growth a lot.

[00:01:15]So we just took away those names like Vodafone and Industri Bank and those kind of names and we're looking at the numbers. Uh the earnings growth for the midcap universe which is almost 90% of the market cap report put in of that universe is almost 27%. Which is fairly healthy. I mean given that one month of disruption was built into that quarter which is the month of March as such when the war started. The small cap universe the earnings growth are at 17 odd% as such. uh you look at the large cap it's around 10 11% if I'm remember the numbers right this is as of uh uh yesterday evening uh we talking about so these numbers are the ones which are telling you that uh demand is strong uh it's it's fairly resilient and even looking at this quarter which we thought by the way uh after the war had broken out my analyst cut the numbers down for the earnings growth to around low double digits kind of growth 11 12% % now they're upping it to 14 15%. I'm sure as the quarter concludes you'll see the earnings growth moving up again for them. Uh the June quarter which was supposed to be the worst quarter uh is now looking at where the growth rates were like supposed to be low single digits now they're upping it to like high single digits. So it's obvious because of the one reason main reason is that the corporates have started passing on the higher raw material costs. uh which they were earlier supposed to absorb but they realized that uh since demand is so good they're passing it on slightly you've seen that in the case of oil and gas companies you've seen that in the case of auto companies and I'm sure consumer companies also passing them on on the on the packaging front per se so having said that tam this is what I wanted to conclude by telling that things if if things normalize on the on the gulf front uh you will see a big uptick happening in India in terms terms of demand because that has not taken a hit right now. Inflation has been again uh not rearing its head but it's slightly up not that much higher also for us. So I think the consumer front is not dented and that is what we were looking out for.

[00:03:29]>> No. So so just just a quick followup there when you're talking about your analysts upping the EPS upping the earnings outlook what sectors are looking exciting to them.

[00:03:39]So basically obviously the ones which have been hammered down the most consumption space fortunately new age consumption quite a few stocks and you'll see them when we when you report the May uh portfolio you'll see quite a few discretionary consumption new age plays being added to our portfolio per se and that is where the real fun is I think because uh the when they reported the numbers literally this third the first quarter of June is almost two months are over and still they're talking about demand uptick and all that. So our belief is that consumption is the area I mean discretionary consumption and new age consumption is the area where you want to be in and that's why we've upped our game there.

[00:04:28]We've cut few names on the bank's front uh because we believe that that story of large caps being the resilient uh uh anchor for your portfolio that has played out now and you might as well move into some mid and small cap names as such and that's where the mixed change will happen when you look at a portfolio name for obvious reasons I'm going not going to disclose any names >> and that's completely understandable. Uh morning then show Alex here. Uh incidentally we were speaking with an auto ancillary company at 9:00 a.m.

[00:05:01]today and he was saying that in his opinion FY27 will be the best year for Indian auto and so it it reinforces I guess what you're suggesting which is saying that that underlying demand seems to be strong. uh the question that I have is that if that demand from the consumption side is remaining strong on the other end what is going to push that growth will be government spending my concern and please tell me what you think about it is that with the government protecting to a certain extent consumers uh by spending money it's going to remove from the arsenal that it might have to spend and so to that extent growth will get curtailed will that have a bearing >> so basically The fact is that the government has a lot of leeway, right? I mean already when you saw the budget numbers, the borrowings that they had entailed from the market were far lower than what the market was anticipating.

[00:05:58]But now they have that leeway possible for them. They can they can increase their borrowings. One, secondly, uh inflation I mean interest rates which were being cut thus far. Obviously that cuts are going to stop now and I don't think that's going to happen going forward. But the fact is that we were on a uh on a sorry the interest rate on a down tick in interest rates which has now plateaued and probably you'll see uh interest rates going up going forward probably in the month the quarter of December not before that inflation has been benign it's despite that's obvious because the government is has absorbed quite a bit of the fuel like rather the oil marketing companies have absorbed the fuel rise they're now passing it on to consumers but the overall impact on inflation is not expected to be that much going forward. So I think there are a lot of levers for this government and obviously the RBI payout uh which was again a record payout though slightly lower than what the market market had anticipated but I think RBI has been prudent enough to keep some reserves back for the volatility in the rupee as such. So uh I think all these being played out I think the government has got quite a bit of leeway going forward.

[00:07:08]I don't expect and by the way all along we've been always saying that it's the private sector which has to now take up the slack and I think that is what's happening. I mean if you hear most of the calls done by most of the capital intensive players they're all talking about expanding on KEX they're all talking about spending more on KEX because the demand uptick they're seeing is obviously looking I mean looking at their utilization levels they're also worried that they capacities may not be enough and that's what they're doing. So I think Alex things are playing out. Uh obviously it'll be a while before that but as I said that given that the worst of times is over and in fact as I was saying to my analysts also this morning that uh look always the market looks at the future and not the past. Uh the quarterly numbers that were supposed to be bad are looking good. So things are turning around out here and that's why I believe that markets are on an even keel given the also the fact that valuations are not that stretched today. I mean if you if you look at pure valuations you may feel feel they're expensive but if you discount them for growth they're looking at probably at 15 year averages or such on a PG basis.

[00:08:22]>> Yeah that and that's interesting. So therefore if the EPS assumptions for FI27 have to be revised higher then clearly there's there's going to be something of a relook at the valuations right and that's incidentally my next question which is that if the valuations are not challenging and if there is an opportunity on growth from the perspective of the foreign institutional investor looking from outside in I know that this is an argument that a lot of people has ma have made but we were talking about for example Taiwan we talking about TS SMC the fact that this one entity accounts for so much of that one market and there's concentration in practically every market. So when rotation takes place back into India what according to you will be the drivers and what will they look for?

[00:09:11]So one obvious anyway you mentioned TSMC by the way TSMC is 62% weight. So that's when when when the FBI comes to us and they ask us why India and why not say Korea or Taiwan, we tell them we're talking about three companies out here and not more than that versus India, right? TSMC in Taiwan and probably Samsung and SKH in South Korea. So that's what we competing with actually if you ask me that. But the fact is that the FBI's have been moving out mainly because of the way the rupee has shown that instability that I think has left a lot of ses in the mouth of APIs because you straight away get hit for no reason. Whatever your market does the rupee takes away, right? So that was one. I think the stability of the rupee should be a a big mover. uh obviously the second one which we've always been saying is that uh India probably the only country which has been taxing foreign flows in terms of capital gains and all no other country does that uh I think if something is done on that parlance uh on the long-term capital gains because FBI when they come they don't come for the short term they remain for a longer term so you can continue with the short-term capital gains but you can take away the long-term gains probably increase it to if you will I mean from one year to make it two years I know dealer just laughing because >> No, no, I'm smiling because now I've been anchoring for 21 years and since the last 24 years I heard this. So >> So >> you should have seen him. He actually started choke laughing. It wasn't even just laughing like >> no but I get the sentiment particularly in these times when India is not the favored destination. Maybe tax tinkering helps, maybe it doesn't. Let's see. But yeah, viewers, just a standard disclaimer. The FM yesterday did not specifically say about LTCG, STCG when she was talking about it. But then sure, point well noted. Assuming that doesn't happen, then sure. Assuming that that there's nothing, it's status quo.

[00:11:15]There's no tinkering at the side. What happens? I mean, does the conflict ending effectively result in the money coming back or do we need to see the winding down of the AI trade before money comes back to India?

[00:11:28]So N my feel is let me just conclude that argument that you know from 16 onwards FY16 onwards there's not been a single budget where the market taxes have not been tinkered >> I mean that's one data point that you can look at and probably you know that leaves a lot of bad taste in the mouth of uh foreign investors who look at stability of uh tax rates but uh then these things happen and they take that away but anyway uh so suppose if the the tinkering doesn't happen then where where do we stand today? Obviously one uh big draw driver of flows for us was uh growth. If that comes back probably things will come back on an even keel.

[00:12:13]You may not see big money coming the big money can come in only when uh things start sarring on the AI front which I don't expect to happen in the near term because given that anthropic and open AI and even for that matter SpaceX which has got AI as a big component of its uh growth story. If this NFOS I mean IPOs rather don't happen in a hurry then you'll see good news coming from that front and that keeps driving the prices up per se. So maybe once that happens that plays out then probably you'll see some flows happening to India otherwise it'll be a small trickle which is going on such that the other pieces I heard you say very yeah the points on midcap small caps so correct uh I heard you say that consumption is where you bent it and we'll see your portfolio when it comes out what about the usual suspects everybody's talking about export beneficiaries because the currency is lower as well and therefore that's not a domestic theme so on the export port side where is it that you have increased exposure with sectors?

[00:13:21]>> So wherever the competition with China is obvious because actually if you dollar depreciation is quite obvious evident right but if you look at the depreciation of the INR versus the yuan >> it's in the early 20s I think 22 or 23% odd that we depreciated against the yuan. So obviously there are segments out there which are in direct competition with China. That's where we looking at increasing our exposure to that extent. However, having said that please understand the normally the rupee depreciation biz other currencies uh doesn't hold good in terms of margins because ultimately you got to pass it on to your end consumer. He can also see I remember meeting one big CFO of a IT firm and asking him this question that look your rupees depreciate so much so your margins will be moving up. He said look I got a Bloomberg they got a Bloomberg I still have to pass it on probably a quarter I'll enjoy but beyond that there's no uh there's no upside for me by rupees they're depreciating volumes will move up however and that is where your uh uh this thing will go I mean as in the economies of scale will work out on the margins front I'm talking about the manufacturing part uh IT services will still remain negative >> you know uh one thing uh which has been trending today dinure and people are ruing about it saying Taiwan has surpassed India to become the fifth largest stock market in the world. The reason I'm asking you is because the amount of pessimism that seems to be there despite things as far as actual corporate earnings beginning to rev up uh and the fact that great for Taiwan but it's because of their semiconductor play. uh do you uh from a medium to long-term perspective see this as worrying in any way or do you think that once the West Asia crisis is sorted the picture could change?

[00:15:15]So Tan I don't think the West Asia crisis I mean they accelerated the whole process but I think India was on a Wayne even before that as such we had a very bad deal on the tariff front even after the deal worked out nobody looked at us to that extent and stuff like that I think it's more of a mind change that needs to happen for us I mean I mean India becoming moving I mean Taiwan becoming larger than us is because the dollar India INR depreciated we became the sixth largest from fifth largest economy we became the sixth largest purely because the dollar moved up right so I think that is where the real pale lies if the currency stabilizes I which has happened for the last couple of days and if the crude comes off sharply because of uh what's happening the federal deal goes through and crude comes off sharply you'll see some breather on that front for India but beyond that I think purely the corporation have to catch up, the growth rates have to catch up before you can see real flows happening.

[00:16:21]>> Just one point on you know how is your investment mood right now? We started this conversation then sure by you talking about how uh your analysts are upping their targets. Where do you think the opportunity resides and is there a sense that if people don't come in right now, they could actually move the next big upswing which could emerge once we have a definitive opening of the state of hormones or something that changes the picture from where we are right now?

[00:16:50]>> So, Tab, the days of big upswings are over. I don't think uh we think so.

[00:16:55]>> Yeah, I I I I really doubt it. I really doubt it because I mean things are not that great globally also. forget about uh our country.

[00:17:04]>> You look at US markets and there doesn't seem to be any problem there at all.

[00:17:09]>> Yeah. But 10 stocks in the future.

[00:17:13]>> As I said, there are 10 stocks in the US. There are two stocks in Korea.

[00:17:16]There's one stock in Taiwan. So these are the ones which are driving the show out there. Unfortunately, India doesn't have any of those kind of heavyweights which are AI driven as such as such. So that's why I don't think those big up moves can happen anymore across the world. Forget about India alone. Uh 12 13% kind of move over the year is a very decent move that one can see out here. So that's why you should be betting on that rather than anything else. You may see a pop at at the time the home opens up as such.

[00:17:48]But as I said that if crude comes back to 60 which I doubt it will happen. I think crude will probably stabilize at 8085 for at least this year on an average which is a bit of a stretch for our country right we import $5 million 5 million barrels a day of crude so you're talking about 100 million of extra expense a day which is a pretty big stretch for us so I think things will be on an even keel and obviously a mines kind of growth is what one can look forward to and that'll be optimistic number actually.

[00:18:24]>> Okay, fair enough. Thank you so much, Dao, for coming in and speaking with us.

[00:18:28]We always enjoy your conversations with you.

[00:18:31]>> Thank you.