He pointed out that globally the internet and artificial intelligence (AI) are the current supercycles driving wealth creation. “Right now, the global supercycle is internet and AI, where you have Nvidia, for example. Nvidia now has a market cap of $4.5 trillion—that’s as much as India’s market cap,” he said.
Jeswani believes internet stocks are leading the present bull market in India. “Internet is the leader of this bull market,” he said, adding that there is a clear super-trend unfolding in the space as digital businesses scale profitably.According to him, India’s internet sector has significant headroom for growth. The country’s total listed tech and internet market cap currently stands at around ₹8 lakh crore, just 1.6% of the total ₹500 lakh crore market capitalisation. “By 2030, of course, there will be new IPOs, but by then, many private equity-backed players will also have moved towards profitability,” he said.
Jeswani also highlighted that the “cash-burning game” in Indian tech is now over. “The loss-making, cash-burning game doesn’t work anymore. Capital is scarce. Even competition to leaders like Swiggy and Zepto have said they will not open new stores—they’ll focus on profitability,” he noted, pointing out that Zomato was among the few that maintained financial discipline.
Looking ahead, Jeswani expects a structural transformation in corporate India driven by technology adoption. “By 2030, 40% of companies will have to become internet companies. Every company will have to move towards AI—it’s not possible otherwise. A lot of value will get created,” he said.
Citing examples from the past, Jeswani said investors have historically benefited from spotting super cycles early—from EMS companies like Dixon, which saw profits surge 10x in a few years, to exchanges like BSE and MCX that rode the boom in option trading.
Despite shifting market conditions, Jeswani said Stallion Asset remains committed to its core philosophy of balancing quality with growth. “In a bull market, you want to make as much money as possible. In a bear market, you want to retain whatever you made in the bull market,” he said, emphasising that flexibility and process-driven investing remain at the heart of their strategy.
Below is the excerpt of the interview.
Q: Let’s get to discussing some themes, then. Walk us through the key playbook and strategies investors should keep in mind as they navigate the Indian markets from here on. If you could help us out with a few of them. My first question to you, basically, is since we’re going to be talking about playbooks and strategies — earlier, if I recall a couple of years ago, you were more towards mid and small-cap companies. But if I look at your portfolio right now, it appears you’re tilting more towards large caps. Tell us how you’re constructing it.
Jeswani: We’ve been 50% large cap for seven years. Broadly, 48-49% large cap for the last seven years. Since the inception of Stallion, we’ve been about 22% mid cap, 18% small cap, and 10% cash. If you take seven years of average of Stallion Asset as a fund, we’ve always had nearly 50% exposure to large cap. It’s just that when there is risk-on, we go towards high-growth small caps as well.
And when we go to small caps, our expectation is—we don’t go for small caps that typically grow at 20%. We want small caps that can grow at 40–50–60%. The idea in a bull market is to make as much money as possible. In a bear market, you want to retain whatever you made in the bull market.
So, in bear markets—like in 2018–2019—the markets were all about quality. We were with quality. In 2021, we kept moving where the markets were moving. Over time, we’ve understood that there are those supercycles that come about where you can create outlier returns. The goal of a portfolio management company like ours is to create alphas for our clients. Alphas mean superior returns than benchmarks. So, you want to be in companies that are growing way faster, but you also need tailwinds. You cannot have companies that grow super-fast without tailwinds.
Q: Let’s talk about a couple of themes. With the various fiscal and monetary policy changes that we have seen, discretionary consumption is something that you’re bullish on. Explain that to us.
Jeswani: We are actually bullish on consumer-facing companies. Broadly, for the last seven years, that has been 74-75% of our portfolio. We do not invest much in government stocks. We’ve never been able to create alphas there—we invest in processes. And our process is very simple. Right now, about 70% of Nifty companies will grow at less than single digits. Your GST growth is around 8-9% for the first few months of this financial year. If your GST growth itself is 7-9%, companies that can grow at 25-30-40%—some food delivery companies, for instance—will grow way faster than that.
Wherever there is growth, that has always been our style. We chase growth—sustainable, predictable growth—and wherever the largest player is gaining market share, that’s where you’ll find us. There is a super trend right now in internet stocks. Internet is the leader of this bull market. If you get a few themes right, even in bear cycles you can make money.
Between 1996 and 2000, the markets went nowhere, but tech stocks went up 100x, 200x, 300x. Even after that, between 2000 and 2003, companies like Hero Honda kept growing consistently. Bull or bear market, there will always be a set of 25-40 companies that will lead.Q: Amit, let’s take that super cycle first—the first playbook that you’re putting out there. You’re saying that internet stocks could potentially be in that supercycle, which means you have the sector tailwind and growth as well, which could be sustainable in the near term. Now, I want to ask you about a couple of examples in the past, because in the EMS theme, we saw those stocks where profitability went up 5x–6x in a few years. Or even when we look at the cash market—the volumes, F&O volumes, cash market volumes—when they went through the roof, some exchanges and wealth companies did very well. So explain a couple of the super cycles in the past.
Jeswani: Right now—the global super cycle is internet and AI, where you have Nvidia, for example. Nvidia now has a market cap of $4.5 trillion—that’s as much as India’s market cap.
The EMS example you gave is a good one. The largest EMS company in India—and these are not stock recommendations, of course, since my family and I have vested interests and we keep adjusting our portfolio—but take a stock like Dixon. Dixon used to make ₹120 crore in 2020. India was then a net importer of electronics. Today, we are a net exporter. Dixon’s profits have scaled from ₹120 crore to around ₹1,300 crore this year, and analysts expect around ₹2,000 crore next year.
In option trading, it was happening in front of us. Big brokers like Zerodha went from ₹200 crore PAT to ₹5,000 crore PAT. BSE, which used to make ₹100 crore a year in 2020, now makes ₹530 crore a year. MCX started option trading in 2022 after SEBI permission, and it’s been a one-way journey.
You keep looking at changes—what’s that large theme—and in that large theme, you keep finding names. If you want super performance, it may not come by buying value stocks. There are hundreds of ways to make money, but we find our super performance comes from buying into supercycles and just holding.
Capital markets are a super cycle. The names may keep changing—right now, the game may even be AMCs as well.
Q: So if you have to identify a couple of supercycles, internet could be one theme, right?
Jeswani: Absolutely.
Q: Since we’re talking about the internet—Nvidia’s market cap is a few trillion dollars. If I look at a company like Zomato, with all your disclosures, some people say it’s already a ₹3 lakh crore market cap. But if it’s got a tailwind, do you think themes like these have a lot more to go? Because even if you add Zomato, Swiggy, and the other internet players, the market cap is not that much.
Jeswani: It’s around ₹8 lakh crore. For example, Swiggy is at about ₹1.08 lakh crore, Zomato ₹3.2 lakh crore, Paytm ₹70–80,000 crore, Delhivery ₹30–40,000 crore, and FirstCry ₹20,000 crore.
If you look at the US market cap—$60 trillion for the S&P 500—about 60% is semiconductors and technology, which is around ₹35-36 lakh crore. If you include Tesla as tech, it’s even higher.
Tech is very hyper-scaling because in most tech companies, costs don’t grow with revenues. So every incremental revenue is profit. When your revenue goes up 100%, your PAT actually goes up 300%. That kind of J-curve will keep happening in India.
Our total tech market cap right now in India is ₹8 lakh crore out of ₹500 lakh crore total market cap—that’s just 1.6%. By 2030, of course, there will be new IPOs, but by then, many private equity-backed players will also have moved towards profitability.
Earlier, tech didn’t become so big in India because private equity players kept burning money to challenge incumbents. But that game is over. The loss-making, cash-burning game doesn’t work anymore. Capital is scarce. Even competition to leaders like Swiggy and Zepto have said they will not open new stores—they’ll focus on profitability. Zomato was the one that didn’t lose money. Again disclaimer, these are not recommendations.
So, by 2030, 40% of companies will have to become internet companies. Every company will have to move towards AI. It’s not possible otherwise. A lot of value will get created.
Q: So internet could be one theme that’s in a super cycle.
Jeswani: Yes, but you still need great entrepreneurs. A theme doesn’t mean you’ll make money. You need to back the right entrepreneurs, even after you’ve got the right theme.
Watch accompanying video for entire conversation.
