Every Big Global Asset Allocator Is Betting On India, Says Piper Serica’s Abhay Agarwal

Piper Serica’s Managing Director and Chief Investment Officer Abhay Agarwal believes the world’s biggest money managers are in agreement on one thing—India is at the top of the list when it comes to allocating capital.

Speaking to NDTV Profit, Agarwal said, “Every large asset allocator has a positive view on India.” The reason, he added, lies in the country’s massive medium- to long-term potential, strong domestic capital inflows, and the increasing consistency of long-term foreign investment.

“There’s a realisation that even at a $5 trillion market cap, India is still exponentially small compared to China at $18 trillion and the US at $60 trillion. That makes our growth runway very long,” he said. He pointed out that India continues to be seen as a market capable of outperforming most other geographies globally.

Foreign flows, he explained, are coming through a mix of exchange-traded fund driven passive allocations and active bets by foreign portfolio investors. While the ETF flows are easier to track, active inflows get revealed more gradually, often becoming visible only after a quarter through shareholding data.

He emphasised that despite short-term global caution, “India is a long-term story that is too compelling to ignore.”

Agarwal said Piper Serica’s own cash holdings are modest—only 6-10% of its portfolio—while the rest is deployed in equity. “We assume equity capital sent to us is meant to be invested. Unless we see very clear mispricing, we prefer to stay fully invested in high-quality names,” he said.

Electronics Manufacturing Services: Agarwal is bullish on the EMS sector, particularly stocks like Dixon Technologies (India) Ltd., which feature in Piper Serica’s model portfolio. “These companies are set to benefit from the global supply chain shift and India’s own electronics production push,” he said.

Small Banks & NBFCs: In what he called a “contrarian call,” Agarwal said Piper Serica has started adding small banks and non-banking financial companies to its portfolio. “While there is still negativity around the sector, especially due to concerns on unsecured lending, this is the bottom of the cycle—and that’s when smart bets get made,” he said.

The firm is steering clear of large financial institutions trading at sky-high valuations, instead favouring lenders with cleaner balance sheets and positive commentary. He cited RBI’s ongoing liquidity support and targeted credit flows to micro-lenders as key tailwinds.

Pharmaceuticals & Healthcare: Piper Serica remains overweight on the pharma sector. Agarwal said the firm’s holdings span across hospitals (Apollo Hospitals Enterprises Ltd.), domestic healthcare service providers, large generic exporters, and contract drug manufacturers such as Dr Reddy’s Laboratories Ltd. 

“The US generics pipeline is the strongest it has ever been. Many Indian pharma companies are seeing more favourable scrutiny from US regulators and are better prepared for launches,” he said.

IT Services: Agarwal made it clear that Piper Serica has no exposure to IT services and hasn’t for two years. Despite the correction in stock prices, he argued that fundamentals do not support current valuations. “If a company is guiding for just 2-3% growth with margin pressure and lack of innovation, it doesn’t deserve a 20-25x earnings multiple,” he said.

He believes investors are still stuck on IT’s historical image as a money spinner, but the macro reality is different now.

Large-Cap FMCG: Another sector Piper Serica has avoided is large-cap fast-moving consumer goods. Agarwal cited intense competition from local brands, stagnant volume growth, and the inability to push through price hikes. “These companies are trading at 40-60x P/E multiples with very low growth visibility. That’s not investor-friendly,” he said.

He added that the belief these are ‘defensive’ plays is increasingly being challenged, especially as valuations remain stretched and market share is under pressure.