# Why Mihir Vora is looking beyond valuations to find India's next market winners - Explained — retained record

> Retained news record from news:india-cnbc-tv18.

Canonical: https://highsignal.app/data/records/242683308ed88b03

[← sources](https://highsignal.app/data)


source: [news](https://highsignal.app/data/news) (news:india-cnbc-tv18)  published 2026-11-13 12:43 ingested 2026-11-14 03:04

[original source ↗](https://www.cnbctv18.com/market/mihir-vora-investment-strategy-india-market-winners-20033669.htm)

## retained text



```
Why Mihir Vora is looking beyond valuations to find India's next market winners - Explained
- Published OnNov 13, 2026 | 18:13 IST
- Last Updated OnNov 13, 2026 | 18:13 IST
Trust Mutual Fund's Mihir Vora is bypassing high trailing price multiples to target long-term growth across defence, CDMOs, and capital goods, betting that multi-fold earnings expansion will justify current valuations. Explore how private and public banks are now on par.
Investors looking for opportunities in the Indian stock market should focus on companies' future earnings potential rather than just their current valuations, according to Mihir Vora, Chief Investment Officer at Trust Mutual Fund. Vora believes sectors such as financials, defence, contract development and manufacturing organisations (CDMOs), capital goods and auto ancillaries offer opportunities as corporate earnings improve and businesses expand their capacities.
In an interview with CNBC-TV18, Vora said the Nifty could deliver 10-15% growth from current levels, supported by improving earnings prospects and more reasonable valuations following the recent market correction. His investment approach is centred on identifying companies with strong growth potential rather than making broad market or asset allocation calls.
The willingness to look beyond seemingly expensive valuations is particularly evident in his approach to defence and CDMO companies, where he sees a substantial opportunity to grow revenues over the next five years.
Why Vora sees opportunities across banks, NBFCs and capital markets
Financials are among the sectors where Vora sees opportunities following the valuation correction. He believes the traditional growth advantage enjoyed by private sector banks over public sector banks has narrowed, bringing their valuations closer.
Private sector banks earlier grew at around 25%, compared with 12-13% for PSU banks. That gap has now reduced, with both categories reporting growth of around 12-15%, while some banks are growing at 15-16%.
The narrowing growth differential has also led to a reduction in valuation differences.
"I would now place both of them at par," Vora said, adding that asset quality was not a concern for either category.
NBFCs are another area of interest. Although they are growing faster than banks, their valuations have become more reasonable following the recent correction. Vora believes private sector banks, PSU banks and NBFCs are now broadly comparable from an investment perspective.
He is also positive on the capital markets ecosystem, including exchanges, brokerages, mutual funds and asset management companies (AMCs). These businesses tend to benefit when market sentiment improves and investor participation increases.
Trust Mutual Fund has exposure to exchanges, online brokers and some AMCs. Vora believes the sector could regain momentum as investors become more willing to take risks.
Defence and capital goods benefit from a private capex revival
The pickup in private sector capital expenditure is another important theme in Vora's investment strategy. He sees activity across industries such as data centers, textiles, chemicals, pharmaceuticals, defence and aerospace.
Within this theme, the fund prefers capital goods and auto ancillary companies that are benefiting from rapid capacity expansion. Defence and power are also areas of interest.
Vora believes private sector defence companies have considerable room to expand their businesses, although their earnings can be uneven at present. This is partly because many are still relatively small and have limited product portfolios.
As these companies expand their offerings, reach greater scale and increase exports, earnings could become more predictable.
"My guess is that over the next two to three years, as these companies expand their product baskets and reach a certain scale, that lumpiness will reduce, especially because they have also started exporting," he said.
The valuation argument is particularly relevant in this segment. Vora said some defence companies could deliver annual revenue growth of 30-50% over the next five years, supported by the size of their addressable markets.
He believes investors need to look beyond current earnings when assessing such businesses. A stock trading at 100 times its trailing earnings could look considerably cheaper if its earnings increase three to five times over the next three to five years.
This is why he prefers evaluating companies using the price-to-earnings growth (PEG) ratio rather than looking at the price-to-earnings multiple in isolation. The focus, he explained, should be on how quickly earnings can grow rather than just the valuation at which a stock is currently trading.
CDMOs offer a long growth runway as Indian companies look to gain from China
CDMOs are another important part of Vora's investment strategy. Along with defence, power transmission and auto ancillaries, the segment has been among the four major themes that have contributed to the performance of his small-cap portfolio over the past two years.
His optimism comes from the opportunity for Indian manufacturers to gain market share from China, which accounts for 60-80% of the global CDMO market in several products.
Indian companies are still relatively small compared with their Chinese counterparts. Vora pointed out that individual Indian companies produce between one-twentieth and one-fiftieth of the output of Chinese companies in some cases. In certain instances, the difference is even wider.
This disparity highlights the potential for Indian manufacturers to expand their capacities and increase their share of the global market.
"We are talking about addressable markets that are 20, 30 or 50 times larger than what these companies are currently delivering," he said.
Within pharmaceuticals and healthcare, Vora prefers CDMOs over generic drug manufacturers. He also sees opportunities in diagnostic laboratories and selected hospital companies.
Why Vora likes refining despite his preference for growth stocks
Refining is another area Vora finds attractive, although he clarified that Trust Mutual Fund does not currently own any of the core refining stocks.
His investment thesis is based on the reduction in global refining capacity, which he believes cannot be recreated quickly. Even as renewable energy gains market share, the transition will take time.
This could keep refining margins higher for longer than the market expects. Vora sees opportunities in core refiners as well as the oil-to-chemicals (O2C) businesses of large conglomerates.
The interest in refining is notable because the fund generally prefers companies with long-term earnings growth and is usually averse to commodity-oriented businesses. However, Vora believes the current valuation and margin outlook makes the refining theme attractive.
Auto ancillaries offer more growth than traditional consumer staples
Within the consumption space, Vora prefers discretionary spending over traditional consumer staples. He believes several categories dominated by large FMCG companies have become saturated, limiting their overall growth potential.
While premiumisation and other factors could support individual companies, he expects performance in the sector to remain stock-specific.
Auto ancillaries, on the other hand, offer a wider growth opportunity. Companies in the segment are benefiting from growth in original equipment manufacturers (OEMs), exports and the transition towards electric vehicles.
Some are also expanding beyond conventional automotive components into robotics and other specialised products. Vora believes established auto ancillary companies have considerable scope to widen their product portfolios and tap opportunities in both domestic and international markets.
Selective exposure to IT and new-age businesses
Vora remains cautious on large-cap IT companies because of their relatively low growth prospects. However, he sees opportunities in select mid-cap IT businesses, particularly those with a stronger focus on research and development.
Trust Mutual Fund's exposure to mid-cap IT stands at around 3-4.5%, while its allocation to large-cap IT is minimal.
In the new-age business segment, the fund has investments across beauty and eyewear retail, payments, fashion and technology-led services. Vora said these companies share a common characteristic: they use technology to grow their businesses faster. The fund also has exposure to some urban services and quick commerce companies.
Gold financing remains on the fund's radar
Despite the sharp correction in gold-financing stocks, Vora remains positive on the segment. He believes demand for loans against gold will continue, while the shift from unorganised to organised lending should support business growth.
The fund has exposure to a basket of gold-financing companies, including some banks with a greater focus on gold lending.
Vora said the correction in these stocks had largely followed the movement in gold prices rather than any structural deterioration in their businesses. He believes lending against gold offers a relatively secure business model, as the underlying asset provides lenders with collateral.
Even in a difficult scenario, he argued, the key variables to assess are margins and growth rather than credit losses.
Why earnings growth matters more than interest rate movements
Vora's preference for stock-picking over market timing is central to his investment philosophy. When the fund launched its small-cap strategy two years ago, sentiment towards the segment was weak, with concerns that valuations had become expensive.
Rather than make broad market or asset allocation calls, the fund focused on identifying individual companies with growth potential. Vora said this approach helped it benefit from themes such as CDMOs, defence, power transmission and auto ancillaries.
The latest earnings season has reinforced his confidence in the market. Around 80% of companies have either met or exceeded expectations, while only 20% have missed estimates.
Vora put earnings growth at around 10% for large-cap companies, 15-20% for mid-caps and 20-30% for small-cap companies. He said the strength of earnings, including margins, had been better than anticipated.
He is also not particularly concerned about the impact of rising interest rates on equity valuations. In his view, markets can continue to perform even when interest rates rise, provided economic and corporate earnings growth remain strong.
"I would focus on growth. That's the main thing," he said.
On the Nifty's outlook, Vora expects 10-15% growth from current levels, supported by improving earnings prospects and more reasonable valuations following the correction. For his investment strategy, the emphasis remains on companies that can deliver substantial earnings growth over the next three to five years, even if their valuations appear expensive today.
Watch accompanying video for full conversation.
```



document fetched 2026-11-14 03:04 · canonical https://cnbctv18.com/market/mihir-vora-investment-strategy-india-market-winners-20033669.htm