Asian Paints: A Trading Bounce
Commenting on the recent surge in Asian Paints’ stock, Maheshwari described it as “more of a trading bounce” rather than a sustainable rally. “Yes, very strong volumes are coming in. But in terms of value, a 10-10.5% increase in volume is translating to only a 6.5% value increase. Volumes are very good but at the lower end of the pyramid, maybe impacting margins,” he said. Maheshwari cautioned against investing at current valuations, noting that “at 65 times, it does not justify having it in your portfolio. I think that is true for most of the FMCG stocks.”
Consumption and Growth Play
When asked whether the market would continue rewarding companies that maintain market share at the cost of margins, Maheshwari reaffirmed the growth story in India. “It has always played out in India. India is a growth market. Whoever is giving you that kind of growth, the market is rewarding that. All the new-age consumption companies pushing the envelope on growth are being rewarded. I continue to believe that growth is the way forward,” he added.
Healthcare Sector: Earnings Momentum but Selectivity Required
Maheshwari noted the resilience in healthcare, highlighting both strong profitability and topline growth. However, he urged investors to be selective. “I do not see any more rerating of the sector. It is already trading at very steep valuations. But earnings momentum will keep driving these stocks. A 15-20% growth for the next two-three years does not seem very difficult. You need to be selective now, maybe two years back everything could have been bought,” he explained.
On sector calls, Maheshwari pointed to companies that have already completed capex and are in execution mode. “Apollo seems to be in a good place. They have really done the capex in the last two years and the stock has been sideways. Execution-ready companies are where I would tilt within healthcare,” he said.
Data Centres: A Nascent opportunity
Turning to data centres, Maheshwari described the sector as capital-intensive with moderate returns. “Yes, Anant Raj is a good bet, but it is very capex heavy. Returns on equity are not going to be outstanding—maybe 14-15%. I would rather play it through picks and shovels: the EPC contractors, electrical contractors, those setting up the infrastructure,” he explained. He emphasized that while investment in the sector is nascent, expected to grow from the current $4-5 billion commitment, identifying the right beneficiaries is key.
Maheshwari’s insights underscore a selective approach in today’s market, favoring growth-driven companies and execution-ready players while exercising caution in sectors with stretched valuations or high capital demands.
