Helios Cap's Samir Arora is nervous about midcaps; is short on pharma, tech, telecom

With the market going through a slight consolidation amidst what has otherwise been a bull run, Helios Capital’s Founder and Fund Manager Samir Arora believes that nothing has gone wrong with the big picture.

“Broadly, June has been a good month,” Arora told CNBC-TV18 in an interview. Elaborating on India’s position in the market, he said that the global performance affects India.

Speaking on sectors, Arora has pharmaceutical companies, technology firms, telecom and a few financials are on his short list. However, he remains nervous about midcaps.

Meanwhile, the fund flows by investors, which are largely believed to have helped the market’s rally, has no value right now, he said. One cannot completely rely on them, he added.

Below is the verbatim transcript of the interview:

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Samir Arora

Fund Manager|Helios Capital Management

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Anuj: Sonia shared the discussion that she had with you in terms of some of your views. Which toaster company are you buying?

A: Toaster company - that was my tweet. Basically if you look at all these opportunities that we had in the 90s and early 2000s where new stocks, new sectors come in. How the money was made was because all this was happening below the radar, as in one or two companies were doing it and then they became slightly bigger and then the others got to hear about it. Nowadays what happens is anything that opens up anywhere - let us that India will have more electricity and less power shortage - suddenly 30 companies want to start toasters, ovens, refrigerators and stuffs like that. So I think even before it starts it gets over.

Latha:  So basically the idea is to avoid these kinds of consumer durables. What is the stock market message?

A: I own some air-conditioner companies, one or two here and there but I was talking in a big picture sense that everybody now wants to do the same thing including Flipkart itself and many other companies said that they will sell through online. And now even Flipkart says that they want to have their own brand. So it was more of a big picture discussion on how so many of them want to do it.

On the other hand talking about this company in which I am neither long nor short but it is a big company, part of a big group and just indicates how, why India so far behind the world on betting on anything. So we have a company like Amazon saying I put USD 14 billion on home food and we have an Indian company which says that to sell consumer durable in my own country I need a Turkish partner who nobody has heard of, the brand will not be theirs, the market is yours forever, you have money pouring out, you both had a company level and at corporate level you are a part of a large group but the only thing missing is guts to bet on your own market. So this is the reality of our pressure driven companies and similarly with the entire Indian tech sector; see the size of bets that they are taking in new technology, they are scared to spend USD 100 million, they want to have their margin and at the same time they have money which they cannot spend. So that is why we get left behind overtime and everything.

For entire interview, watch accompanying videos.