With Nifty 50 earnings growing just 6% in Q4 against 28% for midcaps and over 41% for smallcaps, Helios Mutual Fund is actively reallocating away from largecaps, adding Adani Enterprises, Dixon Technologies, and CAMS to its portfolio.
Nifty 50 earnings growth
6%
Q4 FY26, YoY
Midcap earnings growth
28%
Q4 FY26, YoY
Smallcap earnings growth
41%+
Q4 FY26, YoY
Why PEG matters more than PE
While midcaps appear expensive on a standalone price-to-earnings basis and smallcaps aren't far behind, Irani argues the real picture emerges only when you factor in growth. On a price-to-earnings-to-growth (PEG) basis, smallcaps are currently the cheapest segment of the Indian market, followed closely by midcaps. Largecaps, despite looking optically cheap on PE, turn out to be the most expensive once growth is accounted for.
"Wherever the correction has happened, we have been picking up the mid and smallcaps. We are moving away from largecaps and getting into new names in these segments wherever possible,"
says Irani.
Portfolio moves: In and out
Helios exited Tata Motors CV and Titan in May. The Tata Motors commercial vehicle position was trimmed on concerns over rising crude oil prices weighing on CV demand sustainability. Titan's exit, Irani concedes, may have been an early call given the company's strong growth guidance through its recent analyst meet.
On the buy side, Adani Enterprises was added for its aggressive foray into solar energy manufacturing. Dixon Technologies was picked up at lower levels after the removal of the overhang around Chinese joint ventures, with further approvals expected, making it the largest outsourcing and PLI beneficiary play in India. CAMS was added as a direct bet on India's surging mutual fund industry.
Sectors Helios is avoiding, and why
- Metals / cyclicals
- US-facing pharma
- Consumer durables (ACs)
- Largecap banks (trimmed)
Metals remain off the table due to China's dominance in global supply and the risk of idle Chinese capacity flooding markets. US-facing pharma is seen as a "treadmill" of expiring exclusivities and costly new launches. Consumer durables, despite the heat wave, have shown pickup only in fans — too small a space for meaningful allocation. Largecap banks, which provided portfolio safety earlier, have been partially trimmed as the fund rotates into growth sectors.
Healthcare play: Hospitals over drugs
Helios's healthcare exposure is concentrated in hospital stocks rather than pharmaceutical companies. The fund views quality healthcare capacity as structurally scarce — similar to hospitality — and sees rising per-capita GDP as a secular tailwind for hospital utilisation. CDMO and domestic pharma names do feature in the portfolio, but hospitals remain the core healthcare thesis.
On cash deployment, Irani is unequivocal: "India has enough opportunities to keep cash fully deployed at all times." The fund receives daily inflows and deploys them quickly, holding minimal idle cash at any point.
