"Fund managers are not able to beat even the 150th best performing stock of the index forget about the market." - Samir Arora (Explaining his portfolio construction and elimination strategy) [29:47]
"India has underperformed so much in the last one year... nearly 28 30% against emerging market peers." - Samir Arora (Discussing the post-trade deal recovery) [01:00]
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"AI's main job is to substitute people with computer... and who has the most people in the world? Our motherland." - Samir Arora (Explaining his core thesis for exiting Indian IT sector stocks) [17:55]
"It is easy to know who are the losers than to know who are the winners." - Samir Arora (Discussing how to analyze disruptive technological shifts in auto and OTT sectors) [24:12]
"They will take away your solar panel if it becomes so much; they will steal the solar panel and break it back into silver. So it is all crap according to me." - Samir Arora (Rejecting the industrial demand argument for holding Silver) [50:57]
"Nobody knows anything about anything beyond a point." - Samir Arora (Concluding thoughts on market forecasting and humility) [57:37]
2. Executive Summary
In this wide-ranging interview, veteran fund manager Samir Arora outlines his investment philosophy and market outlook for 2026. He argues that India is poised for steady, earnings-aligned growth following a turbulent year of FII selling and underperformance relative to global peers.
Arora advocates for a defensive, elimination-based portfolio strategy—specifically avoiding structurally challenged sectors like traditional IT services (due to AI disruption) and incumbent auto manufacturers (due to the capital-intensive EV transition).
Ultimately, he suggests investors temper expectations for massive P/E expansion, focusing instead on companies that can consistently deliver 13-15% earnings growth.
3. Chronological Table of Contents
[00:48] - Evaluating the India-US Trade Deal & Market Relief
[03:44] - Analyzing FII Exits and the "China Plus One" Reality
[09:11] - Current Valuations and the Midcap/Small Cap Resilience
[15:42] - Why Helios Capital Exited Indian IT Services
[23:34] - Disruption Analysis: Auto (EVs) and Media (OTT)
[27:58] - Portfolio Balancing: Reliance and Stock Elimination
[32:45] - Evaluating Management: The Case for Zomato
[34:49] - High-Frequency Trading, Liquidity, and STT
[43:00] - Recommendations for Global Investing via ETFs
[48:51] - Safe Havens: Gold Allocation vs. Silver Skepticism
[54:39] - 2026 Market Outlook and Earnings Expectations
4. Key Takeaways
AI is a Structural Headwind for IT:AI fundamentally drives productivity, meaning fewer humans are needed for the same output. For headcount-driven Indian IT services, this represents an existential threat, prompting Arora to reduce his sector exposure to zero [16:45].
The "Elimination" Strategy Wins: Outperforming the market isn't about finding the single best stock; it's about systematically avoiding the bottom 150 performing stocks in the index [29:47].
Beware the EV Transition Trap: The shift to EVs requires massive capital expenditure from incumbent automakers just to maintain their existing market share, facing 30+ new entrants [25:22].
Global Diversification via ETFs: Picking individual global stocks is too complex for most. Broad ETFs (like MSCI World) are the most effective vehicles for retail investors [48:18].
Returns Will Track Earnings: The era of easy P/E expansion is pausing. In 2026, investors should expect market returns to closely mirror corporate earnings growth (around 13-15% in INR terms) [55:56].
Arora discusses how India underperformed emerging market peers by nearly 28-30% in the last year. The recent US trade deal, which reduced looming tariffs from 50% down to 18%, is a vital relief valve. He clarifies that FII selling ($19 billion net in 2025) was driven by momentum and US market optimism rather than purely Indian valuations.
Helios Capital made their IT exposure near zero in Feb 2025. Arora's logic is that AI's purpose is to replace people or make them so productive that fewer are needed. For a sector that scales by hiring people, this is a structural threat. In Auto [23:34], he argues that incumbents are in a "capital destroying" phase—spending billions on EV tech just to maintain the same sales volume while facing new Chinese and US competitors.
Arora emphasizes that management doesn't need to be "miraculous," just "not bad." He remains bullish on Zomato, noting that the founder stepping into a non-executive role is a non-issue as long as the operational drive remains. He cites the founder giving up 500 crore in ESOPs as a sign of alignment [33:55].
Arora suggests retail investors should not attempt individual global stock picking. Instead, they should buy MSCI World ETFs. He personally holds 13-14% in Gold as a hedge against US Dollar weaponization [50:12], but calls the bullishness on Silver "crap," attributing its price rises to supply chain squeezes rather than structural demand [51:03].
The "Hostage" Supply Chain (Apple in China): Arora references reading about how Apple became captive to China. This explains why US firms are pushing for a "China Plus One" strategy to avoid being held hostage by a single market [07:50].
The Singapore Covid Refund: During COVID, the Singapore government sent Arora's firm $70,000 in aid. Since they didn't fire anyone and were profitable, they donated it to charity the next day [41:11].
The "NAV" Desk Sign: Arora keeps the letters "NAV" (Net Asset Value) on his desk. He jokes that in fund management, "once your NAV is good, you are the hero," making it his primary source of satisfaction [42:29].
8. References & Recommendations
Books:
The Engine That Moves Markets, Alistair Nairn - On tech disruption and market cycles [24:04].
The Halo Effect, Phil Rosenzweig - On management perception bias [43:14].
Fooled by Randomness, Nassim Nicholas Taleb - On market probability [43:20].
How Not to Invest, (Bloomberg Author) - On the importance of rejection in investing [43:55].
The Buffett Letters - The foundational starting point for investors [43:22].
Apple in China - Mentioned in context of supply chain risks [07:50].
Tools/Platforms:
MSCI World Ex-US ETF & MSCI World ETF - Recommended vehicles for global diversification [48:18].
Jane Street & High Frequency Trading - Mentioned regarding liquidity costs [36:22].
9. Speakers & Credentials
Samir Arora: Founder and Fund Manager at Helios Capital. Former Head of Asian Emerging Markets at Alliance Capital; managed India's largest IT fund in the 90s.
Host: Representative from Thrive by Groww, providing a platform for institutional insights for retail investors.
10. Actionable Next Steps [Not An Investment Advice]
Portfolio Pruning: Identify the bottom 20% of your holdings and apply the "rejection" framework. Focus on removing potential losers rather than just finding winners [29:47].
Assess Tech Exposure: Re-evaluate holdings in traditional IT services. Consider if the AI productivity threat is priced into current low-growth guidances [16:45].
Benchmark Expectations: Align your target returns with the 13-15% earnings growth projected for 2026 instead of expecting P/E re-rating [55:56].
Jul 13, 2026
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