On the lending space, Mehta believes the clean-up in microfinance and MSME unsecured portfolios has strengthened the NBFC segment. “I think that for investors who want to buy lenders, NBFC is a great segment… a lot of NBFCs now have cleaned up their books… whatever the NPA they had are well behind them.”
He emphasised a preference for diversified lenders rather than niche players. “Our preference is for NBFCs which are doing multi-product… not just housing or automobile loans or microfinance or gold loan.” He cited Bajaj Finance, Chola and L&T Finance as preferred names, while disclosing investments in them.
Turning to solar equipment manufacturers, Mehta acknowledged that the bullish call has not played out immediately. “We have been very positive on all solar equipment manufacturing companies… that call is not proving right so far.” However, he maintained that long-term investors could benefit. “If you have a longer-term view… this is a nice sustainable compounding industry and can deliver good returns.” On the recently imposed 126% customs duty, he said, “This… will not impact India’s solar equipment industry to any major extent… Waaree included,” adding that valuations have turned attractive, even as he disclosed existing investments in the space.
On the underperformance of Reliance Industries, Mehta offered a structural explanation. “I have a different view and that is that it is slowly going to become a holding company.” He suggested that investors may be uncomfortable with the prospect of IPOs for Jio and retail without a clear vertical split. “We would have preferred a vertical split… given free shares to all the shareholders.” Until there is clarity on restructuring, he believes the stock could remain subdued, though he reiterated that it remains a great company.
In real estate, Mehta advised patience and selectivity, favouring larger developers with rental income streams. “I would prefer the larger ones, especially those which have got some annuity assets as well.” He referred to companies like Prestige and DLF as examples and added that investors should broadly focus on players with rental assets, given the supply of new listings and valuation adjustments underway.On tobacco counters, particularly ITC Limited, his stance was unequivocal. “Yes, we have a view and it is an avoid. It is not an FMCG stock. It is a tobacco stock and it is valued accordingly.” He said growth visibility remains limited. “I do not see ITC growing at double digit type of growth rates in the foreseeable future.” Instead, his focus is on small and midcap companies with unique business models and more reasonable valuations after the recent correction.Discussing the GLP-1 opportunity in pharma, Mehta acknowledged its potential but warned about competition. “You are right, it is a good opportunity. But just too many players over there.” Even so, he remains constructive on the broader sector. “On the whole investors should be overweight pharma.” He noted that CDMO companies have seen sharp corrections and should be on investor watchlists for a potential turnaround.
On new-age digital firms such as Eternal, he said investor patience appears to be wearing thin. “Investors are losing patience… when they will turn to profitability.” However, he added, “We remain very positive on Eternal… we have a longer-term view,” signalling continued conviction despite volatility.
Finally, on metals, Mehta struck a cautious tone after a prolonged rally. “It is a cyclical industry and now it has been a great outperformer.” While he would remain invested, he is not keen on fresh entries at current levels. “At some point the cycle certainly will turn… right now I do not see the outperformance continuing.”
Overall, Mehta’s approach reflects a preference for diversified financials, an overweight stance on pharma, selective exposure in real estate and solar, caution in metals, and a clear avoidance of slow-growth largecaps — all anchored in a long-term investment perspective.
-1024x683.jpg "The Graham Platner Debacle: Kamala 2.0?")
