Helios Avoids Auto and Consumer Stocks; CEO Dinshaw Irani Explains Reasons

Helios is avoiding auto and consumer stocks due to negative outlook on auto sector, particularly PVs, due to EV competition and potential tariff implications. CEO Dinshaw Irani is wary of stretched valuations in consumer staples and QSRs. He also expresses concerns about the durable goods sector, specifically AC sales, due to unfavorable weather conditions impacting performance. Helios prefers new-generation EV two-wheeler players and sees potential in consumer staples and QSRs but is cautious about stretched valuations.

Helios Mutual Fund's CEO, Dinshaw Irani, has expressed a cautious outlook on several sectors, particularly the auto and consumer goods sectors, due to various market dynamics and potential policy changes. His comments, made on July 2, 2025, highlight the need for investors to remain vigilant amidst evolving economic conditions.

Irani's primary concern is the auto sector, particularly passenger vehicles (PVs), which he believes is facing intense competition from electric vehicles (EVs). He also noted the potential implications of tariffs from trade agreements, which could further impact the sector. While he sees potential in new-generation EV two-wheeler players, he remains cautious about stretched valuations in consumer staples and quick-service restaurants (QSRs).

In the durable goods sector, Irani expressed concerns about air conditioner (AC) sales, citing unfavorable weather conditions as a significant factor affecting performance. This sector has been particularly volatile, with recent data showing a 15.5% month-over-month surge in durable goods orders, driven largely by transportation equipment orders [2].

Irani's cautious stance aligns with broader market trends. The U.S. durable goods orders data for July 2025, excluding defense and aircraft, revealed a stark divergence between sectors. While transportation equipment orders skyrocketed, other critical sectors like electrical equipment remained stagnant. This volatility presents an opportunity for investors to shift capital from fragile industrial subsectors to more resilient defensive plays, such as utilities [2].

The India-UK Free Trade Agreement (FTA), signed recently, has also influenced Irani's outlook. The agreement aims to lower tariffs on UK cars and reduce the average tariff for UK goods to 3% from the previous 15%. While this could benefit the automobile sector, it is still too early to gauge the full impact. Irani's view is that the sector should be approached with caution, given the potential for tariff implications and competitive pressures from EVs.

In conclusion, Dinshaw Irani's cautious outlook on the auto, consumer, and durable goods sectors underscores the need for investors to stay informed and adapt their strategies in response to evolving market conditions. His comments serve as a reminder that while opportunities exist, they must be navigated with a keen eye on potential risks and uncertainties.

References:
[1] https://mezha.net/eng/bukvy/trump-s-crucial-tariff-decisions-impacting-us-economy-by-august-1/
[2] https://www.ainvest.com/news/navigating-durable-goods-surge-sector-rotation-strategies-volatile-industrial-landscape-2507/
[3] https://m.economictimes.com/markets/expert-view/helios-is-avoiding-auto-and-consumer-stocks-for-now-dinshaw-irani-explains-why/articleshow/122880740.cms