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Straits Times
28-06-2025
- Business
- Straits Times
Surviving terror, investing in hope: How entrepreneur Shiv Puri turned survival into purpose and prosperity
Mr Shiv Puri, a philanthropist and the founder and managing director of TVF Capital Advisors, at Sentosa Golf Club on June 23, 2025. ST PHOTO: GAVIN FOO Wong Kim Hoh meets... Surviving terror, investing in hope: How entrepreneur Shiv Puri turned survival into purpose and prosperity Meet Mr Shiv Puri and you might think he has breezed through life, helped along by luck and a few well-timed tailwinds. The 48-year-old entrepreneur and philanthropist laughs easily, tells great stories and carries the steady calm of someone who has seen the extremes of human experience and lived to tell the tale. Behind the easy charm is a mind forged by discipline – on the golf course, where he was a teenage amateur champion; in the boardroom, as founder of boutique equity firm TVF Capital Advisors; and most profoundly, in the face of mortality, having survived the 2008 Mumbai terror attacks. The last experience reshaped his outlook and brought a deeper purpose to his pursuit of success. Now a Singaporean, Mr Puri was born in Mumbai but moved to New Delhi when he was a child. His entrepreneur father, who left a stable job to start a real estate business, and his mother, a homemaker, raised him and his older sister in what he describes as a 'very normal upbringing'. But normal is relative. Even as a child, he was 'very driven to want to do something on my own'. At 11, he started his first business: buying cricket cards wholesale and selling them to classmates, undercutting the vendor outside his school. The profits, he recalls, were 'great money for a kid', enough to supplement his meagre pocket money and fund fast-food treats. Around the same age, he discovered golf. His father had joined a club, and young Shiv tagged along, quickly becoming hooked. 'Golf is a mental sport. It's all in the mind,' he says. By 15, he was playing internationally, and at 17, he represented India at the World Schools Golf Championship in St Andrews, Scotland, the sport's hallowed ground and the oldest golf course in the world. Golf, he explains, is less about beating others and more about 'competing against the course'. It taught him resilience. He says: 'If you hit a bad shot, it's over, it's behind you... don't dwell on the past. You can still regroup and have a good round.' These lessons – patience, focus and the ability to recover from setbacks – would later become the bedrock of his investment philosophy. When it came time for university, he set his sights on the United States, a bold move in the mid-1990s, when few in his family had ventured so far. His parents agreed, on one condition: He would study engineering. 'I had no idea about engineering, but I said yes,' he says. At the University of Pennsylvania, he went a step further, landing a spot at the prestigious Wharton School and juggling a dual degree in systems engineering and finance. 'I had to do the engineering degree to make mum and dad happy,' he says with a laugh. It was at Wharton that he stumbled upon the writings of Warren Buffett and Charlie Munger, the minds behind American multinational conglomerate Berkshire Hathaway. Their no-nonsense wisdom and long-term investing philosophy struck a chord and would go on to deeply shape his world view. To save on tuition, he crammed five years of coursework into four. Despite the punishing schedule – 'in my final semester, my friends were taking two classes... I had seven, plus golf' – he thrived. Playing off a handicap of one, Mr Puri was part of the team that led Penn to its first Ivy League championship in 66 years. By the time he graduated in 1998, one thing was clear: Engineering had sharpened his problem-solving skills, but his heart was in finance. He landed his first job at investment bank Morgan Stanley in New York, working in private equity, ironically, in real estate. 'My dad was very happy,' he says. The hours were brutal, the learning curve steep, but the experience invaluable. Yet, after two years, he craved more than just 'crunching numbers and thinking about Excel sheets'. The lure of Silicon Valley – and the boom – proved irresistible. He joined Crescendo, a venture capital firm, just as the tech bubble was inflating. 'We'd make investments, and the value would shoot up 30 times in a year. I thought, 'Making money is so easy!'' he recalls, with a wry smile. After the bust, Mr Shiv Puri realised that venture capital – picking winners from a sea of business plans – was not where his edge lay. ST PHOTO: GAVIN FOO Then came the crash. 'In one year, I saw people I thought were the best investors lose everything. That was the single best risk management lesson I've ever had. No textbook could teach me that.' 'Even today, when there are market bubbles or exuberance, that risk filter subconsciously is always there,' he adds. After the bust, Mr Puri realised that venture capital – picking winners from a sea of business plans – was not where his edge lay. In 2001, he joined Bain Capital in Boston, this time focusing on public equities. 'Six months into the job, I knew this was what I wanted to do forever,' he says. The appeal? The ability to analyse established businesses, look beyond short-term noise and invest with a long horizon. But the entrepreneurial itch returned. In 2004, Mr Puri launched his own fund, TVF (The Voyager Fund), with a modest pool of capital of US$5 million and a simple philosophy inspired by Mr Buffett and Mr Munger: 'Play long-term games with long-term people.' He sought investors who were willing to commit for years, and focused on businesses he could hold for a decade or more. 'Compounding is everything,' he says. 'All good things happen because of compounding, whether it's wealth, health, family or relationships.' The approach was unusual in the world of public markets, where most investors chase quick returns. Asked how a 27-year-old resisted the allure of fast money, he says: 'There's a lot of noise and turbulence when you're flying at a certain level but if you fly slightly higher, it's actually calmer. And you can see the horizon better.' Mr Shiv Puri with the late Mr Charles Munger, vice-chairman of American multinational conglomerate Berkshire Hathaway, in 2019. PHOTO: COURTESY OF SHIV PURI Word spread. Institutional investors – family offices, college endowments, even a sovereign wealth fund – came knocking. Today, the company manages more than 150 times its original capital, with a team split between Singapore and India. TVF's approach is resolutely bottom-up, focused on sectors like financial services, healthcare (especially hospitals), technology and consumer discretionary, particularly in India and South-east Asia. Key investments which the company has held for more than a decade include Max Healthcare, a major player in India's healthcare sector; Info Edge, an early-stage tech company that grew into a big online classifieds business; and Bajaj Finance, a non-banking financial company with a market capitalisation that has gone from US$3 billion in 2015 to US$65 billion (S$83 billion) today. 'We look for businesses that can scale, maintain quality and have a long runway for growth,' he says. 'Patience is active, very active endurance, knowing that there's a goal, knowing that you're making progress but it's not immediate,' he says sagely. He insists on getting to know founders deeply, sometimes over decades, before investing. 'It's not just about the person at the top, but the culture within the firm,' he says. If golf taught him patience, and the crash taught him risk, it was the Mumbai terror attacks of 2008 that taught him perspective. On the night of Nov 26 that year, Mr Puri, his wife and two friends were having pre-dinner aperitifs at the Taj Mahal Palace hotel's Harbour Bar when gunfire erupted. 'At first, we thought someone had dropped a lot of plates,' he recalls. But the reality soon became clear. Drawing on his knowledge of the hotel's layout – he got married there a year earlier – he led his group through kitchens and corridors, seeking refuge. They hid in the chef's office, lights off, chairs braced against the door, as terrorists stalked the hallways. At one point, he heard a terrorist outside the door asking a hotel employee if there were guests inside. 'At that point, the terrorists were not shooting the servers, waiters or chefs unless they came in the line of fire. They wanted to shoot the guests, the foreigners, people who would make headlines. Luckily, the employee said there was no one inside.' Later, a heroic chef – who unfortunately died in the course of the night – led them to a business lounge packed with 150 people. When an evacuation was attempted, the first 30 people in line were gunned down. Mr Puri and his wife and friends were just four places behind. 'It was pure luck,' he says quietly. They spent the night lying flat on the floor, frozen as gunfire echoed around them, until commandos finally rescued them at dawn. 'I always had an innate belief that it was going to be okay,' he says. His wife, meanwhile, could think only of their five-week-old baby at home. After the incident, she struggled to leave the house for months, but Mr Puri went back to work two days later. The experience was transformative. 'After that, nothing in business, no market crisis, could come close. It put everything in perspective.' His brush with death was a turning point, he says. 'I became much more deliberate about purpose. Wealth creation has to have a purpose. For me, that's making an impact, especially in education and healthcare,' says Mr Puri, who also set up his own family office, Vesta Global Capital, in 2015. Over time, he channelled his energies into philanthropy, especially in education. 'Education can really change lives. It's the best form of pay-it-forward,' says Mr Puri, who, among other things, helped scale Prayas, a non-governmental organisation that runs after-school programmes for disadvantaged children in Delhi, and co-founded Ashoka University, now India's largest liberal arts institution. His involvement goes beyond funding. He is actively building bridges between Ashoka and the National University of Singapore (NUS), fostering student exchanges and entrepreneurial internships. In Singapore, where he moved to after the Mumbai attacks, he also sits on the international advisory council of the NUS Yong Loo Lin School of Medicine, mentoring young doctors and entrepreneurs. Mr Shiv Puri planting a tree in 2016 at Ashoka University, which he co-founded. PHOTO: COURTESY OF SHIV PURI Healthcare, particularly eldercare, is his next frontier. 'How do you age gracefully? It's about finding purpose, getting respect and still feeling like you're a valuable member of society even though you're not working. It's a combination of all these things,' he says. For insights into long-term thinking, he studies Mr Buffett's annual letters. For perspective, he turns to Roman emperor Marcus Aurelius' Meditations, a collection of writings on Stoic philosophy. Among other things, Stoic philosophy focuses on staying grounded, resilient and at peace by focusing on what you can control and letting go of what you can't. Despite the constant drumbeat of bad news and global woes, the father of two teenagers prefers to remain optimistic. 'Civilisation requires trust. I think optimism is a default setting. It doesn't mean you're being naive. But I think people are far too pessimistic, especially in the investing world.' He adds: 'Human ingenuity cannot be underestimated. And despite all we have endured in the past, we are still living in the most prosperous time on earth.' Join ST's WhatsApp Channel and get the latest news and must-reads.
Economic Times
17-06-2025
- Business
- Economic Times
Market's next big cue may come from earnings and rural revival: Shiv Puri
Agencies The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. "One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind," says Shiv Puri, TVF Capital Advisors. Other than large private banks, is there anywhere else where you are seeing some hope of positivity, you have been upbeat on healthcare for quite some time now, any views on that? Shiv Puri: Within healthcare one of the areas that we have been very optimistic on is in hospitals, but then again, it is an area to be very careful about because hospitals are actually a very difficult business, but if done correctly are one of the best businesses you could own. And there are some operators here who are able to deliver quality healthcare, attract the right kind of patients, attract the right kind of doctors, understand the capital allocation process very well and therefore deliver very high return on capital and healthcare is underpenetrated in India. So, if you are able to build that trust with consumers, the runway for growth is very long. I just wanted to touch upon the consumption space because India has been one of those biggest consumption stories and of late, we have seen government also taking some steps with respect to RBI cuts, tax cuts as well. Do you believe that there are good opportunities to still play this particular sector or the valuation comfort is still there? Shiv Puri: Well, consumption is very broad in India. So, you could have something like FMCG that could be pretty highly penetrated and very competitive as well and you could have certain areas like retail where their runway for growth is very long. So, within the broad theme of consumption, the Indian markets are very underpenetrated, but you have to be very selective in terms of where you look in that stories. One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind. When you talk retail, while that may be as basic as buying a particular thing, the format of how you buy is where the sizable opportunity is, everything from quick commerce to traditional retail and unfortunate as it may be the listed pool is very-very limited. So where is it within retail that you find those opportunities and you think there is that longer runway? Shiv Puri: So, again one of the things that we have looked at in India is that typically if a business is very difficult, it is a double-edged sword because it means that it is hard to make money but it also means it is harder for other people to enter. And if you look at retailing, if you look at fashion retailing, these are businesses that are very difficult to do, but you do have success stories. I mean, one of the largest wealth creators globally are basically owners of retail chains whether it is online or offline. And so in India, if you have a company that has been working on that for a number of years is obviously doing really well and it is still in only a few hundred cities, but a lot more expansion that can happen that is where the opportunity lies. Do you believe the premiumization wave that we have seen across consumption, do you believe that that play is still very much present in the market because if you talk about the entire consumption space compared to FMCG, pure play, consumption discretionary that has done much better. Would you be placing your bets in that segment? Shiv Puri: The premiumization wave has a long way to go and it is both good and bad. The good is, of course, it creates opportunities in different sectors within consumer discretionary. The bad is the consumer base is not broadening out as well as we would like for that to happen in India. So, you are seeing more wealth getting concentrated and therefore, that is creating opportunity especially in leisure and travel and services, but in other areas where there are a lot of different companies out there, it would be great to see the consumer base broaden out a lot more. But again, this consumer discretionary is a big basket which is playing. So, any select or any subsegment that is your preferred bet right now, be it autos, be it retail that we just touched upon? Shiv Puri: I would say in retail there are a couple of plays that are really interesting. I think areas like autos, etc, are not something that we have looked at very closely, tend to be very competitive. Oh yes, that is indeed. But give us some sense that where is the next big cue for the markets can come from because we are amidst that global uncertainty, the tariff, some experts do believe that the worst is rather behind and now the negotiations in and on will take place and yes, of course, the earning season is also through. So, where is the next big cue can be lying for the markets? Shiv Puri: Interestingly in markets in India the cue ends up being earnings coming through and the markets tend to react to it. And so, like I said earlier, if two-and-a-half of the three are in place, you are in a good position for the markets to respond. And based on some of the areas where we are talking about, which is increased credit availability, rural pickup, government capex spend, you could see a pickup in earnings with a favourable base effect and all of that could then therefore mean a positive outcome for the market. I just want to get back to the point that you were making on financials because I mean, traditionally you thought financials, private banks or maybe a few larger PSBs as well but now you have got that regulatory backing, you have got the central bank making the moves which only makes financials extremely attractive and the larger pool right, I mean everything from even insurance plays, etc, put in over there and, of course, NBFCs. Is it time to look at bottom-up stories there or still stick by with the leaders in financials? Shiv Puri: In financials, one of the things we have observed is scale matters and therefore, the big tend to be able to withstand uncertainties much better than the smaller balance sheets. The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. And so in financials, you do see accidents happen and that is part of it globally and so as long as you do not let that happen to you which is not just about lending, it is about culture, it is about a whole lot of different things, then just by the fact that accidents happen to other firms means you get stronger and so therefore some of these firms are still very well positioned because India is still under penetrated credit market. We have not reached any level of saturation yet. So, financials, healthcare, consumer discretionary, anything else that you are bullish on or buying? Shiv Puri: That would be enough to do well in the markets.
Time of India
17-06-2025
- Business
- Time of India
Market's next big cue may come from earnings and rural revival: Shiv Puri
"One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind," says Shiv Puri , TVF Capital Advisors . Other than large private banks , is there anywhere else where you are seeing some hope of positivity, you have been upbeat on healthcare for quite some time now, any views on that? Shiv Puri: Within healthcare one of the areas that we have been very optimistic on is in hospitals, but then again, it is an area to be very careful about because hospitals are actually a very difficult business, but if done correctly are one of the best businesses you could own. And there are some operators here who are able to deliver quality healthcare, attract the right kind of patients, attract the right kind of doctors, understand the capital allocation process very well and therefore deliver very high return on capital and healthcare is underpenetrated in India. So, if you are able to build that trust with consumers, the runway for growth is very long. I just wanted to touch upon the consumption space because India has been one of those biggest consumption stories and of late, we have seen government also taking some steps with respect to RBI cuts, tax cuts as well. Do you believe that there are good opportunities to still play this particular sector or the valuation comfort is still there? Shiv Puri: Well, consumption is very broad in India. So, you could have something like FMCG that could be pretty highly penetrated and very competitive as well and you could have certain areas like retail where their runway for growth is very long. So, within the broad theme of consumption, the Indian markets are very underpenetrated, but you have to be very selective in terms of where you look in that stories. One thing that we have clearly seen over the last 12 months is a tightening of unsecured personal lending and that was done correctly because there was a lot of issues happening out there. But as that outlook changes, you are going to see consumption also get a tailwind. Live Events When you talk retail, while that may be as basic as buying a particular thing, the format of how you buy is where the sizable opportunity is, everything from quick commerce to traditional retail and unfortunate as it may be the listed pool is very-very limited. So where is it within retail that you find those opportunities and you think there is that longer runway? Shiv Puri: So, again one of the things that we have looked at in India is that typically if a business is very difficult, it is a double-edged sword because it means that it is hard to make money but it also means it is harder for other people to enter. And if you look at retailing, if you look at fashion retailing, these are businesses that are very difficult to do, but you do have success stories. I mean, one of the largest wealth creators globally are basically owners of retail chains whether it is online or offline. And so in India, if you have a company that has been working on that for a number of years is obviously doing really well and it is still in only a few hundred cities, but a lot more expansion that can happen that is where the opportunity lies. Do you believe the premiumization wave that we have seen across consumption, do you believe that that play is still very much present in the market because if you talk about the entire consumption space compared to FMCG, pure play, consumption discretionary that has done much better. Would you be placing your bets in that segment? Shiv Puri: The premiumization wave has a long way to go and it is both good and bad. The good is, of course, it creates opportunities in different sectors within consumer discretionary. The bad is the consumer base is not broadening out as well as we would like for that to happen in India. So, you are seeing more wealth getting concentrated and therefore, that is creating opportunity especially in leisure and travel and services, but in other areas where there are a lot of different companies out there, it would be great to see the consumer base broaden out a lot more. But again, this consumer discretionary is a big basket which is playing. So, any select or any subsegment that is your preferred bet right now, be it autos, be it retail that we just touched upon? Shiv Puri: I would say in retail there are a couple of plays that are really interesting. I think areas like autos, etc, are not something that we have looked at very closely, tend to be very competitive. Oh yes, that is indeed. But give us some sense that where is the next big cue for the markets can come from because we are amidst that global uncertainty, the tariff, some experts do believe that the worst is rather behind and now the negotiations in and on will take place and yes, of course, the earning season is also through. So, where is the next big cue can be lying for the markets? Shiv Puri: Interestingly in markets in India the cue ends up being earnings coming through and the markets tend to react to it. And so, like I said earlier, if two-and-a-half of the three are in place, you are in a good position for the markets to respond. And based on some of the areas where we are talking about, which is increased credit availability, rural pickup, government capex spend, you could see a pickup in earnings with a favourable base effect and all of that could then therefore mean a positive outcome for the market. I just want to get back to the point that you were making on financials because I mean, traditionally you thought financials, private banks or maybe a few larger PSBs as well but now you have got that regulatory backing, you have got the central bank making the moves which only makes financials extremely attractive and the larger pool right, I mean everything from even insurance plays, etc, put in over there and, of course, NBFCs. Is it time to look at bottom-up stories there or still stick by with the leaders in financials? Shiv Puri: In financials, one of the things we have observed is scale matters and therefore, the big tend to be able to withstand uncertainties much better than the smaller balance sheets. The second thing is technology matters and they are able to invest and upgrade much better than some of the smaller names. And so in financials, you do see accidents happen and that is part of it globally and so as long as you do not let that happen to you which is not just about lending, it is about culture, it is about a whole lot of different things, then just by the fact that accidents happen to other firms means you get stronger and so therefore some of these firms are still very well positioned because India is still under penetrated credit market. We have not reached any level of saturation yet. So, financials, healthcare, consumer discretionary, anything else that you are bullish on or buying? Shiv Puri: That would be enough to do well in the markets.
Economic Times
17-06-2025
- Business
- Economic Times
Midcaps still overheated; Nifty valuations offer relative safety: Shiv Puri
Agencies So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US. "The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding," says Shiv Puri, TVF Capital Advisors. What is the world looking like? It is just utter chaos, but it seems like there is some stability for equity markets. Shiv Puri: Yes, in the last few years I cannot think of many times where there has not been chaos in the global markets. But for the markets to do well typically it needs three things. One is, it needs free flowing credit. Second is, you need a strong earnings outlook and the third is, you need cheap valuations. And if you look at the story in India 12 months ago, all three were yellow or even red. But today over the last 12 months, you have seen with the reserve pay increasing, liquidity into the system, with rates getting cut, we do have liquidity that is flowing back into the credit markets. The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding. Valuations still remain high, they do not remain cheap but within that again if you look at what is happening in the larger names and the Nifty kind of names, those names look very reasonable; whereas if you look at the midcap and the smallcaps, they still look high. So, we are two-and-a-half out of three in terms of what it takes to have a sustained market which is quite resilient and so therefore, the equity markets outlook is constructive, barring geopolitical risk which is something that we live with now every day of the year and those are inherently unpredictable. The global markets have made a bet that geopolitical conflicts are going to be regional and not global and as long as that remains the case, the markets are going to be okay. But that is obviously inherently unpredictable. But tariffs would be and we have definitely seen that get priced in in the markets for store I guess beginning March and then in the run-up to April. Since then, markets have rebounded, S&P 500 already at an all-time peak, and many other global markets as well, we are also pretty much close to that. But is that baked in into the prices? Shiv Puri: I think the tariffs has created more uncertainty in terms of what those levels actually will be than the reality of what the impact is going to happen. And if you look at it in the context of India, exports as a percentage of GDP is still fairly low and most of that is still services. So, in the context of goods, while it is still important for industries and it needs to be resolved, at the GDP level, at the economic level for India, it should not be that material an impact. However, the thing to keep in mind is, of course, consequences of consequences. The second-degree impacts of everything and so those are going to be determined by where these rates actually end up because obviously, they have been all over the map in the last six months. And you spoke about how earnings need to solidify a little bit more for the funders of India to be a little more solid. Now, the quarter gone by, quarter four, we were already headed in a muted expectations which is why the numbers were looking fairly okay. But going ahead in the quarters to come, you are going to have the base effect from last year kick in. So, do you believe fundamentally we are going to be doing well or the numbers only going to look good because there was a weak base? Shiv Puri: Well, if you rewind the clock a little bit, we had a huge bounce back in earnings post covid and you had 20% plus earnings growth for the index because covid was depressed. Thereafter it became a little hard when you entered the last 18 odd months and so you saw muted earnings growth in the single digits. When you look at the next 12 months, one, of course, as you mentioned correctly there is a base effect that will be favourable, but second is, there are other pockets that are starting to now pick up. One, of course, as I said is credit is starting to flow more freely in the economy, you are seeing rural consumption that is starting to pick up, government capex which was pretty subdued looks like it is starting to move a little higher. And the two real areas which still have not seen anything improve yet is urban consumption which is still fairly muted and the second is private capex, company capex numbers still have not picked up. But when you put all the pieces together, I still think it is two-and-a-half out of three or three out of four in terms of where we are. So, definitely, a better position than last year. You talked about as to how there is valuation comfort still when it comes to largecaps. Where do you see those stories play out and where is it that you are finding those outsized opportunities? Shiv Puri: Well, I think still there areas like, for example, private sector financial, especially the largecap names seem to be fairly reasonably priced at the moment and then again, if you look at some of the other sectors, valuations are always in context of what their durability and quality of the growth is going to be. So, it is magnitude, durability, and quality. And so, if you factor some of that in, there are a few other areas even in consumer discretionary, in healthcare, especially in some of the hospital names that I still think have a very long runway of growth where I see opportunity. Also talk about the about the fund flow that we are seeing because of late, the FIIs are seem to be making a bit of a comeback in the Indian markets and we did talk about the global uncertainty that still persists. Do you believe, can India be that oasis amongst all the emerging markets and the developed economies which are on the stock market front they are already at an all-time high and while Indian macros are now turning favourable there is a case where the fund flow can now turn positive? Shiv Puri: It is. One of the things that FIIs have seen is that a lot of the money comes from the US and if you look at the S&P 500 over the last 5, 10, 15, 20 years, it has delivered dollar returns comparable or even better than what the Indian equity markets have delivered in dollar terms. And then, of course, you have added impediments here in terms of taxes and things like that that maybe some of those institutions do not have to deal with. So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US.
Time of India
17-06-2025
- Business
- Time of India
Midcaps still overheated; Nifty valuations offer relative safety: Shiv Puri
"The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding," says Shiv Puri , TVF Capital Advisors . What is the world looking like? It is just utter chaos, but it seems like there is some stability for equity markets. Shiv Puri: Yes, in the last few years I cannot think of many times where there has not been chaos in the global markets. But for the markets to do well typically it needs three things. One is, it needs free flowing credit. Second is, you need a strong earnings outlook and the third is, you need cheap valuations. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Kulkas yang belum Terjual dengan Harga Termurah (Lihat harga) Cari Sekarang Undo And if you look at the story in India 12 months ago, all three were yellow or even red. But today over the last 12 months, you have seen with the reserve pay increasing, liquidity into the system, with rates getting cut, we do have liquidity that is flowing back into the credit markets . The earnings outlook which started moderating over the last 12 months has started to bottom. You are seeing that in the GDP numbers and therefore with the lag you will start also seeing that in earnings rebounding. Valuations still remain high, they do not remain cheap but within that again if you look at what is happening in the larger names and the Nifty kind of names, those names look very reasonable; whereas if you look at the midcap and the smallcaps, they still look high. Live Events So, we are two-and-a-half out of three in terms of what it takes to have a sustained market which is quite resilient and so therefore, the equity markets outlook is constructive, barring geopolitical risk which is something that we live with now every day of the year and those are inherently unpredictable. The global markets have made a bet that geopolitical conflicts are going to be regional and not global and as long as that remains the case, the markets are going to be okay. But that is obviously inherently unpredictable. But tariffs would be and we have definitely seen that get priced in in the markets for store I guess beginning March and then in the run-up to April. Since then, markets have rebounded, S&P 500 already at an all-time peak, and many other global markets as well, we are also pretty much close to that. But is that baked in into the prices? Shiv Puri: I think the tariffs has created more uncertainty in terms of what those levels actually will be than the reality of what the impact is going to happen. And if you look at it in the context of India, exports as a percentage of GDP is still fairly low and most of that is still services. So, in the context of goods, while it is still important for industries and it needs to be resolved, at the GDP level, at the economic level for India, it should not be that material an impact. However, the thing to keep in mind is, of course, consequences of consequences. The second-degree impacts of everything and so those are going to be determined by where these rates actually end up because obviously, they have been all over the map in the last six months. And you spoke about how earnings need to solidify a little bit more for the funders of India to be a little more solid. Now, the quarter gone by, quarter four, we were already headed in a muted expectations which is why the numbers were looking fairly okay. But going ahead in the quarters to come, you are going to have the base effect from last year kick in. So, do you believe fundamentally we are going to be doing well or the numbers only going to look good because there was a weak base? Shiv Puri: Well, if you rewind the clock a little bit, we had a huge bounce back in earnings post covid and you had 20% plus earnings growth for the index because covid was depressed. Thereafter it became a little hard when you entered the last 18 odd months and so you saw muted earnings growth in the single digits. When you look at the next 12 months, one, of course, as you mentioned correctly there is a base effect that will be favourable, but second is, there are other pockets that are starting to now pick up. One, of course, as I said is credit is starting to flow more freely in the economy, you are seeing rural consumption that is starting to pick up, government capex which was pretty subdued looks like it is starting to move a little higher. And the two real areas which still have not seen anything improve yet is urban consumption which is still fairly muted and the second is private capex, company capex numbers still have not picked up. But when you put all the pieces together, I still think it is two-and-a-half out of three or three out of four in terms of where we are. So, definitely, a better position than last year. You talked about as to how there is valuation comfort still when it comes to largecaps. Where do you see those stories play out and where is it that you are finding those outsized opportunities? Shiv Puri: Well, I think still there areas like, for example, private sector financial, especially the largecap names seem to be fairly reasonably priced at the moment and then again, if you look at some of the other sectors, valuations are always in context of what their durability and quality of the growth is going to be. So, it is magnitude, durability, and quality. And so, if you factor some of that in, there are a few other areas even in consumer discretionary, in healthcare, especially in some of the hospital names that I still think have a very long runway of growth where I see opportunity. Also talk about the about the fund flow that we are seeing because of late, the FIIs are seem to be making a bit of a comeback in the Indian markets and we did talk about the global uncertainty that still persists. Do you believe, can India be that oasis amongst all the emerging markets and the developed economies which are on the stock market front they are already at an all-time high and while Indian macros are now turning favourable there is a case where the fund flow can now turn positive? Shiv Puri: It is. One of the things that FIIs have seen is that a lot of the money comes from the US and if you look at the S&P 500 over the last 5, 10, 15, 20 years, it has delivered dollar returns comparable or even better than what the Indian equity markets have delivered in dollar terms. And then, of course, you have added impediments here in terms of taxes and things like that that maybe some of those institutions do not have to deal with. So, if you factor that in, it is dependent on two parts, one is, of course, how well India does, but the second is how well India does relative to the S&P 500 to the US.
