As Indian equity markets digest multiple moving parts—from conglomerate restructuring to policy-driven sectoral shifts—investors are increasingly focused on where durable value creation may emerge over the medium to long term. Speaking to ET Now, Deepak Shenoy, Founder & CEO, Capitalmind MF offered a wide-ranging perspective on conglomerate monetisation, tobacco taxation, QSR valuations, industrial capex, power, banking trends and the evolving auto cycle.

On the subject of large conglomerates and asset monetisation, Shenoy refrained from commenting on specific companies but laid out a broader framework for how such entities typically unlock shareholder value over time.

“So, I cannot specifically talk about individual companies unfortunately because our compliance would not allow us, but in general large conglomerates when they start looking at multiple businesses, the problem becomes are you a holding company or are you an operating company that has multiple perhaps non-connected investments as well,” he said.

He pointed out that as businesses scale independently, structural clarity becomes critical. “We have seen some of these investments actually divest by splitting their company shares by…, I mean in a sense demerging from the larger entities, and I expect that to happen, that is in the best interest of shareholders,” Shenoy said, adding that cross-holdings often dilute transparency. “Creating large monolithic entities is not useful,” he noted, arguing that once newer businesses mature, “you should have it independently listed and the sum of the parts here will be greater than the whole.”

Turning to the tobacco sector, Shenoy struck a cautious tone following the excise duty announcement. He highlighted long-term structural challenges facing cigarette makers. “First people have reduced smoking in general. The overall numbers and volumes over a long period of time have grown lesser and lesser every year and they will degrow as time goes by,” he said, pointing to changing consumer behaviour and alternatives such as vapes.

He also flagged policy risks and margin pressures. “The ability for the government to extract taxes out of just cigarettes… I think the idea is that the tax revenue from this is going to dwindle and the companies that are solely focused on cigarettes as a revenue source should consider diversifying into other sources,” Shenoy said. Over time, he expects volumes and profitability to remain under pressure, making diversification into FMCG, hospitality or other businesses increasingly necessary.