Baron India Fund

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 (in our view, return on equities can sustain 20% to 22%). 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.

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.

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.

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.

Kirloskar Oil Engines Limited

Acutaas Chemicals Limited

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.

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.

Centum Electronics Limited (CTE.IN) is a leading electronics manufacturing services (EMS) provider in India, providing design and manufacturing solutions for mission-critical applications across defense, aerospace, industrial, and automotive industries.
We believe Centum is well positioned to benefit from the Indian government’s “Make in India” initiative, which encourages domestic manufacturing of electronic products and components by providing attractive tax subsidies and manufacturing infrastructure. In addition, amid escalating global geopolitical tensions, we see further upside from India’s accelerated efforts to indigenize the design and production of defense equipment, which will benefit electronic system providers like Centum.