Baron India Fund

Bajaj Finance Limited (BAF.IN) is a leading, non-banking financial company 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, enabling high risk-adjusted returns; in our view, return on equity can be sustained at 20%–22%. Bajaj is also building a broader digital ecosystem, with apps offering insurance, brokerage, wealth management, and other financial products. We expect Bajaj to compound earnings at roughly 25% annually over the next five years.

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.

Divi’s Laboratories Ltd. (DIVI.IN) is a leading player in pharmaceutical contract manufacturing and production of Active Pharmaceutical Ingredients (APIs) for the generics industry. Divi’s focuses on complex value-add projects, earning high margins and returns on capital.
Divi's is a beneficiary of increased API outsourcing by global pharmaceutical companies. The company has a dominant position with >60% market share in key APIs such as Naproxen and Dextromethorphan, given its economies of scale and lower cost structure. We expect the company to generate 10% to 15% earnings growth for the next five years driven by continued robust demand.

ICICI Bank Limited (ICICIBC.IN) is one of India’s largest private-sector banks, providing retail, business and corporate banking, treasury and digital financial services to individuals and businesses in India and select international markets.
ICICI Bank’s profitability is improving, supported by favorable trends in asset quality, margins and costs. Management’s focus on improving the customer experience, expanding fintech partnerships, using data analytics to tailor products and developing its mobile app into a broader digital platform should support market share gains and greater efficiency. We believe these initiatives could help narrow the valuation gap with other high-quality Indian private-sector banks.

HDFC Bank Limited (HDFCB.IN) is one of India’s largest private sector banks, offering retail, wholesale and commercial banking services. Housing Development Finance Corporation Limited merged into the bank effective July 1, 2023.
We view HDFC Bank as a high-quality investment in Indian financials, supported by its record of consistent returns and strong management. Its leading deposit franchise and healthy asset quality provide a funding advantage, while continued investment in technology strengthens its digital banking capabilities. These advantages should support further market share gains and improved efficiency.

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.

InterGlobe Aviation Limited (INDIGO.IN), known as IndiGo, is India’s largest airline operator, with over 60% market share in the duopolistic domestic aviation market. With a fleet of over 430 aircraft, IndiGo provides low-cost connections to more than 85 domestic and 35 international destinations.
IndiGo has been a key beneficiary of industry consolidation in the aftermath of the pandemic and ongoing supply-chain challenges that have disproportionately impacted smaller competitors. We are excited about the growing demand for air travel in India, the improving pricing discipline in the market, and IndiGo’s vision to expand its international destination network. We expect IndiGo to deliver 15% to 20% compounded EBITDA growth 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.

Bharat Electronics Limited (BHE.IN), known as BEL, is a leading defense electronics manufacturer in India, with about 60% market share. It is the second-largest Defense Public Sector Undertaking under the Ministry of Defense. BEL develops equipment 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.

Kirloskar Oil Engines Limited