Baron India Fund

HDFC Bank Limited (HDFCB.IN) is one of India's largest and most recognized private sector banks, offering a broad range of financial services to retail and commercial clients. It merged with parent company HDFC Ltd. in July 2023.
We see HDFC Bank as the best quality play in Indian financials, given its history of consistent returns and best-in-class management. The bank has a solid deposit franchise and healthy asset quality, which gives it a competitive advantage in funding. HDFC Bank’s significant investments in technology place it as a leader in digital banking, which should drive continued market share expansion and efficiency improvements.

Bharti Airtel Limited (BHARTI.IN) is a leading telecommunications company, with operations in 18 countries across Asia and Africa. The company's offerings include wireless, mobile commerce, and fixed line. 
Bharti Airtel is a top-three player in the Indian telecommunications industry. With more than 30% market share, it is well positioned to benefit from rising smartphone penetration and 4G services in India. The company should continue to gain market share from Vodafone India, which is on the brink of bankruptcy and will likely need to raise mobile tariffs by more than 50% to remain a viable entity. We expect earnings to generate mid-teens growth over the next three to five years, with further upside from its broadband and enterprise businesses.

Reliance Industries Limited (RELIANCE.IN) is India's leading conglomerate, with business interests that include oil refining, petrochemicals, media, telecommunications, and retail.
We believe Reliance is positioned to leverage its telecommunications network to transform into a digital services company, offering products such as video streaming, broadband, and e-commerce services. The company is also laying the groundwork to create an online marketplace that will connect roughly 13 million mom-and-pop retailers to over 480 million mobile and internet subscribers. We believe earnings will sustain high double-digit growth over the next three to five years.

ICICI Bank Limited (ICICIBC.IN) is India’s second-largest private-sector bank, known for its strong capital base and attractive liability franchise. The bank is focused on the retail segment, which is under-penetrated and provides a long runway for growth.
ICICI Bank’s profitability is improving due to favorable trends in asset quality, margins, and costs. We are encouraged by management's focus on enhancing the customer journey, partnering with other fintechs via an open architecture, using data analytics to better tailor product offerings, and modernizing its mobile banking app into a superapp that serves diverse customer needs. We believe these initiatives will allow ICICI to gain share, improve efficiency, and narrow the valuation gap versus other high-quality, private-sector banks in India.

Precision Wires India Limited (PWI.IN) is the largest manufacturer of enameled copper winding wire in India, with over 25% market share. Winding wire is a critical component used in power transformers, generators, automotive motors, and industrial motors.
Precision Wires sells its products to original equipment manufacturers across a broad range of end markets, including automotive, aerospace and defense, power, electronics, home appliances, and infrastructure. The company benefits from long-standing customer relationships, scale advantages, and in-house R&D capabilities, which underpin its competitive positioning. Over the long term, we believe structural growth in India’s power sector and rising penetration of electric and hybrid vehicles should drive continued demand for Precision Wires’ products.

Bajaj Finance Limited (BAF.IN) is a leading non-banking financial corporation in India. It offers various financial products and services including housing loans, consumer durables financing, small- and medium-sized enterprise credit, and rural loans.  
We believe Bajaj is well positioned to benefit from growing demand for consumer financial services in India. The company's data analytics platform is a key competitive advantage that enables it to earn high risk-adjusted returns (return on equities can sustain 20% to 22%, in our view). Bajaj is quickly becoming India's largest fintech player by creating an ecosystem of apps offering insurance, brokerage, and wealth management, among many other new products and services. We expect Bajaj to grow earnings by roughly 25% over the next five years.

Eternal Limited (ZOMATO.IN) is India's leading food delivery and quick commerce platform, with roughly 55% and 40% market share in these respective categories. 
Eternal is well positioned to benefit from structural growth in online food delivery in India. The industry has become a duopoly between Swiggy and Eternal, which bodes well for future economics and scale. We believe the company has the potential to double revenue while also improving profitability and growing earnings over the next three to five years.

Bharat Electronics Limited (BHE.IN), known as BEL, is a leading defense electronics manufacturer in India, with approximately 60% market share. It is the second-largest Defense Public Sector Undertaking under the Ministry of Defense. The company develops equipment and systems for defense communications, radars, and tank electronics.
BEL has consistently invested in in-house research and development while implementing cost-reduction measures, resulting in an industry-leading profitability profile. In our view, the company is well positioned to benefit from the Indian government’s initiatives promoting defense indigenization. We also see additional growth drivers from India’s rising defense budget and expanding export and non-defense opportunities. We expect BEL to deliver 15% to 20% compounded earnings growth over the next three to five years.

SBI Life Insurance Company Limited (SBILIFE.IN) is one of the largest life insurance companies in India. Key offerings include term life insurance and other savings products.
We believe SBI Life is well positioned to benefit from growing demand for insurance services and the financialization of household savings in India. In our view, the company's ability to leverage India's largest bank branch network through its parent entity is a critical competitive advantage, and we expect SBI Life to sustain mid-teens growth in embedded value over the next three to five years.

Aster DM Healthcare Limited (ASTERDM.IN) is the third-largest listed hospital chain in India, with a capacity of more than 5,000 beds. The company recently announced a merger with Quality Care, positioning it to become the largest hospital chain in India with over 10,000 beds.
We are excited about the multi-year growth opportunity for hospital services in India, driven by rising demand for quality health care. We remain confident in Aster as a key beneficiary of ongoing industry consolidation, with its strong market position and comprehensive range of services. We expect the company to sustain revenue growth in the mid teens over the next three to five years.

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