Autos, IT and Metals: Parag Thakkar’s sectoral playbook for investors

With the auto sector showing resilience, attention is shifting towards auto ancillary plays, where some companies are setting ambitious long-term goals. One such example is Minda Corp, which recently unveiled its Vision 2030 roadmap.

Speaking exclusively to ET Now, Parag Thakkar, a seasoned market voice, expressed strong conviction in the company. “Minda Corp is one of my top holdings. We have 4.5% in our portfolio. So, just to put a disclaimer there is a vested interest. We have Minda Corp in all our clients’ portfolios and we are extremely positive on the company, even more positive after yesterday's event,” he said.

Thakkar noted that the event showcased a promising growth trajectory. “Three-and-a-half times revenue growth by 2030, three times EBITDA growth by 2030. But the way they showcase the entire product portfolio and which is entirely driven by content per vehicle story, they are trying to gain wallet share out of every customer and increase the customer base also,” he explained. He further added that Minda Corp’s focus on security access, wiring harness, and premiumization led by cockpit clusters gives the company a strong competitive edge.

Importantly, Thakkar highlighted Minda Corp’s financial discipline. “They have said that they will reduce their net debt to equity to 0.3x which is almost like a debt-free company and ROC improvement from 20% to 25%, which also tells me that they will be very-very disciplined in their capital allocation while aiming for a very high growth. So, this is a great long-term compounder. A minimum 20% compounder from here on,” he said, while reiterating that investors should consult their financial advisors before making decisions.

IT Sector: A Cautious Stance
On the IT front, Thakkar said his firm has trimmed exposure. “We took this view that AI might have a deflationary impact on IT and that is why we trimmed our exposure after the Infosys buyback announced and that brought a little cheer into IT stocks,” he noted.

While the GST cut, RBI’s repo rate reduction, and income tax slab changes boosted sentiment in domestic plays, IT stocks face multiple headwinds. “There are three problems. One is delay in decision making by US customers led by tariff uncertainty. Second was this deflationary impact due to productivity gains which they get through AI. They have to pass it on to their customers to some extent. And third is now again this H-1B visa related thing,” he said.

Despite being underweight on IT, Thakkar maintained his preference for large players. “So, preference, so first of all Infosys definitely. Infosys, TCS. TCS, we already have in the portfolio. Infosys also we already have in the portfolio. We are looking at Mphasis very closely on dips. Tech Mahindra is there, very small quantity,” he added, but stressed that the sector is currently missing triggers for fresh upside.

Metals: Constructive on Hindalco, JSW Steel
Turning to metals, Thakkar maintained a constructive view. “We have been constructive on Tata Steel, JSW Steel, and Hindalco kind of names and we still hold JSW Steel in our portfolio and any dip in Hindalco will be a good buying opportunity in my view,” he said.

He pointed to upcoming catalysts. “Novelis new expansion which will start from next year, plus there are a lot of coal mines which they have been allocated in India which will all together improve their EBITDA margins for FY28 and plus new contracts with beverage can consumers in US will again boost EBITDA to a normal level in next year,” Thakkar explained.

He added that macro factors could provide an additional boost. “If the rate cuts in US actually materialise to say more than three rate cuts and dollar index really starts falling again, then there will be a renewed interest in metals,” he concluded.