According to reports from ETMarkets, Helios India continues to maintain zero exposure to IT services while maintaining an overweight stance on domestic consumption. The portfolio management firm's conviction stems from its 'Elimination Investment' philosophy that rejects sectors on bad factors through an 8-factor check process. As reported by ETMarkets, the firm's negative stance on IT began in February 2025 and has remained unchanged despite recent sector recovery, citing artificial intelligence as a potential disruptor that threatens the longevity of traditional IT services business models. Manoj Bahety, Founder and Fund Manager at Carnelian Asset Management, warns that while AI is undeniably real and potentially the most important technology of our lifetime, the current valuations are reminiscent of past market bubbles. He notes that SpaceX is trading at 93 times sales, OpenAI at 35 times, and Anthropic at 21 times, with US stocks reaching levels near 1999 peaks.
As reported by ETMarkets, Helios India believes demographic and lifestyle changes will be the biggest alpha generator over the next 3-5 years. The firm highlights that almost two-thirds of India's population is under 35 years, with a fifth of global youth living in India, creating what they describe as the largest youth pool globally. According to the report, this young population is more educated and aspirational than previous generations, with millennials and Gen Z now contributing to over 70% of the workforce. The firm notes that unlike previous generations, this demographic is comfortable borrowing for consumption, including taking loans for vacations, reflecting confidence in future earnings. Bahety emphasizes that India is the only big economy that has cut its debt since 2008, positioning it as the natural destination for global capital when the current AI frenzy eventually fades.
According to ETMarkets, Helios India sees significant opportunities in new-age consumption plays including fintech, foodtech, e-commerce, quick commerce, direct-to-consumer (D2C) businesses, and other digital-first companies. The firm's confidence is supported by India's JAM trinity (Jan Dhan, Aadhar, and Mobile data), which has been executed flawlessly and is enabling exponential growth in these sectors. As reported by ETMarkets, the portfolio includes significant allocation towards NBFCs and private sector banks, with consumer-facing financial institutions positioned as enablers of consumption growth through financing and borrowing facilities. Bahety's conviction order of wealth creation starts with manufacturing, which represents only 14-15% of India's economy today but is heading towards 20-25%, representing a genuine multi-decade opportunity. He notes that financials follow as incomes rise and savings flow into financial products, with consumption trends showing Indians trading up to premium products.
As reported by ETMarkets, Helios India acknowledges macro challenges including inflation, crude oil prices, and monsoon uncertainty. The firm identifies monsoon deficit due to record El Niño as the biggest current concern, though elevated reservoir levels compared to the previous year may help withstand a deficit monsoon. According to the report, the firm's Elimination Investment philosophy helps avoid mistakes by ensuring stocks pass through an 8-factor elimination process, focusing on sectors with multi-year structural tailwinds, quality management, and reasonable valuations. The philosophy particularly helps navigate sharp volatility in small- and mid-cap stocks by avoiding stocks with questionable fundamentals. Bahety warns that the current market structure shows deceptive narrow growth, with the Magnificent 7 growing earnings by roughly 22% while the other 493 S&P 500 companies grew by only 9%, creating conditions reminiscent of past market bubbles.
