Baron India Fund

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 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.

Max Healthcare Institute Limited (MAXHEALT.IN) is the second-largest hospital chain in India. It operates more than 5,000 beds across its network of 22 health care facilities.
Max Healthcare has best-in-class operational metrics among Indian hospitals, driven by its status as a high-end specialty care provider and focus on cost management and return metrics. Over the past four years, management has focused on cost cutting. The company has now entered an expansion phase, planning to double its bed count from fiscal 2023 to fiscal 2027. Improving payor mix, entry into new geographies, growth in medical tourism, and an asset-light operations and management model could further boost average revenue per occupied bed and return on capital employed.

ICICI Bank Limited (ICICIBC.IN) is India’s second-largest private sector bank, with a 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 to improve the customer journey, partner with other fintechs via an open architecture, use data analytics to better tailor product offerings, and modernize its mobile banking app into a superapp that serves various 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.

InterGlobe Aviation Limited (INDIGO.IN), which goes by 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.

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 over 12 million mom-and-pop retailers to over 400 million mobile and internet subscribers. We believe earnings will sustain high double-digit growth over the next three to five years.

HDFC Bank Limited (HDB) 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.

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.

Backed by the Tata Group, Trent Limited (TRENT.IN) is a leading direct-to-consumer retailer in India that sells private label apparel through its retail chains. It reported $1 billion in revenue for fiscal 2024 and operates over 800 Westside and Zudio stores across 180 cities in India.
Trent is a differentiated apparel company focused on product quality, a pricing strategy without promotion, and supply chain management, which translates into quality like-for-like (LFL) growth. The company is expanding its Zudio value fashion retail chain, and we estimate that Zudio store count could reach more than 1,000 in the next five years. We believe double-digit LFL growth and store expansion could drive more than 25% topline growth. Operating leverage and franchise growth should enhance margin expansion and drive more than 30% EBITDA CAGR in the years ahead.

Cholamandalam Investment and Finance Company Limited (CIFC.IN), known as Chola, is a leading non-banking financial company in India, with well-diversified businesses spanning vehicle loans, loans against property, and home loans. It runs a loan book of $14 billion, with 1,204 branches across 29 states.
We believe Chola is well positioned to benefit from growing demand for consumer financial services in India, and we are excited about several opportunities that lie ahead for the company, including its newly launched unsecured consumer and small to medium enterprise loans and further rollout of its home loans. We expect Chola to sustain loan growth of 20% to 25% and double its loan book in the next three to five years.

Tata Consultancy Services Limited (TCS.IN) is the largest IT services company in India. It provides consulting services and software products to help its clients with innovation and technology transformation.
Tata Consultancy should benefit from a multi-year global enterprise cloud migration. We believe it will capture share from smaller players as customers consolidate their IT services vendor base. Backed by the Tata Group, Tata Consultancy enjoys best-in-class corporate governance and a strong leadership bench. Its high employee retention helps drive its industry-leading profitability and return profile. We estimate low double-digit EPS growth over the next three to five years, with more than 80% of profits returned to shareholders.