On metals, Andrade maintained his constructive stance on the sector, underscoring the structural advantages Indian companies enjoy.
“Well, if you take all the companies in metals in India, they have some significant advantages in terms of cost advantages that some of these players have and they have relatively high capital efficiency ratios. A lot of that is now determined by the fact that they have a reasonable amount of protection in the domestic environment. So, profitability should be relatively okay for a bulk of these businesses,” he said.
He added that ongoing capital expansion and cost rationalisation are key positives for balance sheets.
“Capital investment is going to continue and is going to continue at a reasonably strong pace. None of these businesses need external capital to fund whatever they are doing right now… And when you do all of this, the cash flows increase and you will be able to see a reasonably strong balance sheet going into the next two or three years. So, we are relatively constructive on that space and also if metal prices hold up, we should be in for a reasonably stable environment for all of these companies going into the balance part of this decade.”
Consumption and FMCG
Asked about the boost in liquidity, GST-related benefits, and festive demand, Andrade struck a more cautious note, especially on staples.“So, I did mention that consumer discretionary, especially in the automotive and the appliance businesses should be relatively stable and see reasonable amounts of volume growth coming in there and may not be very constructive into the nondiscretionary part of the market. So, we will have to wait and watch. We tend to believe that this quarter should be the litmus test for the consumer economy. If they are in a position to get volume plus pricing, it is a structural change. But if they are just getting volume with the absence of pricing, 2026 might not be such a great year for a consumer economy. So, we are waiting and watching. Our current positions are largely linked to discretionary consumption and not so much to non-discretionary spends.”
Fund positioning
Addressing the cash levels in Old Bridge’s focus fund, Andrade clarified that the current 11% cash position is not a tactical call but a function of fresh inflows. He outlined how the capital will be deployed and broke down current sector allocations.
“So, it is going to be a little bit more of the same. We will just add another one business over the course of the next couple of weeks. But it will be largely in the domain of where our current positions are. If you look at the portfolio constructions, we have got about 13% in pharmaceuticals and metals is about 8%, technology is closer to about 9%, financial services about 5%, automotive and automotive parts will be about another 9% of the portfolio, 5% will be in real estate, another 5% in aviation. So, a mix and match. It is a fairly diversified portfolio with a reasonably strong focus on businesses that lead their category or their segment.”
Andrade noted that the focus fund will continue to run with 22–23 stocks and stick to its core thesis. “The cash that is sitting in our portfolio will be a little bit more of the same and not something significantly different from where we currently stand… While saying that into 2026 we are fairly aligned to the fact that the significant change in the trade environment should normalise itself and most of the Indian companies that are there will continue to dominate and actually stabilise operations and go back to historical growth levels.”
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