While midcap valuations stretch to the higher side, Abakkus Mutual Fund is quietly anchored in a massive smallcap mispricing. Sanjay Doshi, Head of Research & Investments, says that the Abakkus Flexi Cap Fund has maintained a deliberate 30% allocation specifically to smallcaps within its 50% SMID exposure. This tactical tilt bypasses market fear, capturing high-conviction, beaten-down names poised to lead India’s next major growth rally.

Edited excerpts from a chat with the fund manager:

How has your outlook towards the market and the stocks you own changed after the Q4 results? Given the macro headwinds, do you fear downgrades in Q1?
We have seen a positive surprise in corporate earnings especially in the small and mid-cap space during Q4 FY26, following a strong performance in Quarter 3 as well. While Q4 numbers were resilient, it is very likely that the full impact of West Asia crisis will be more visible in 1Q FY27 rather than Q4 FY26. Many companies were cushioned in the March Quarter, due to adequate raw material inventories, which helped limit supply disruptions and cost pressures.

In contrast, 1Q FY27 is expected to reflect the lagged impact of elevated crude and natural gas prices, due to raw materials procurement related disruptions and higher purchase cost, currency depreciation and an increase in logistics and insurance cost. These factors could weigh on margins across several sectors.
Additionally, a weaker monsoon remains a key risk, particularly for rural income and demand for certain consumption linked segments. This could further impact demand and potentially lead to some earnings downgrades during the upcoming quarter.
However, with easing tensions in West Asia conflict, we could see some improvement in Q2 FY27 onwards. As a result, while near-term volatility and downgrades cannot be ruled out, the risk to full-year FY27 earnings appears relatively contained at this stage. We expect a sequential improvement in earnings, leading to limited risk to overall FY27 earnings.
Many believe that midcaps are in a sweet spot and the earnings season was also relatively better. Would you agree to that?
As of May-end, we have seen mid and small caps have outperformed the broader indices over a six-month period, including the phase since March 2026 that was impacted by the West Asia conflict.

This outperformance has been driven by strong underlying fundamentals, with earnings growth in the 15%-20% range for mid and small caps over the last two quarters, compared with single digit earnings growth for Nifty.

In our research, certain pockets within the small-cap space continue to exhibit selective mispricing, where fear has compressed valuations more than what fundamentals would justify. From a valuation and risk–reward perspective, we therefore see relatively better opportunities in small caps.

While mid-caps have delivered stronger earnings growth, valuations remain on the higher side. We believe investors need to be particularly selective and mindful of individual investment ideas within the mid-cap segment.

In your flexicap fund, how has your positioning changed towards mid and smallcaps in last 2-3 months?
In our Flexi Cap Fund, we follow a balanced yet opportunity-driven approach across market capitalizations, with a notable tilt towards small caps stocks. Since its launch, the Abakkus Flexi Cap Fund has consistently maintained a higher allocation to SMID stocks at ~50% with ~30% specifically in small caps over the last five months.

This positioning reflects the attractive risk-reward we currently see in quality small-cap names and niche mid-cap leaders. The portfolio is designed with a healthy mix of established leaders and emerging potential winners, supported by meaningful high conviction allocations.

While we remain mindful of near-term volatility, our allocation is driven by bottom-up conviction anchored in our investment philosophy, MEETS framework, and disciplined risk mitigation process. This approach allows us to participate in the most compelling opportunities across the market-cap spectrum while staying aligned with long-term wealth-creation objectives.

From a 5-year view, which sectors are you bullish on and why?
From a medium-term horizon, we remain constructive on financials, pharmaceuticals, discretionary consumption, manufacturing, and select new-age themes.

Within Financials, lending businesses remain resilient, supported by strong balance sheets and improving asset quality. Non-lending financials continue to be a structural play on the financialization of savings in India, along with increasing insurance penetration.

We are particularly bullish on the manufacturing theme, specifically export-oriented and new-age sector linked companies. India’s cost arbitrage in manufacturing, global supply-chain diversification, recently signed FTAs, and strong tailwinds in sectors such as semiconductors, electrical grid upgradation, and private defence, should all help Indian manufacturers.

The consumer discretionary sector is also a structural play on rising income levels and premiumization driven by evolving consumption patterns.

Lastly, we are positive on the pharmaceuticals sector, driven by the increasing focus on innovation by Indian players, the upcoming patent cliff which should provide meaningful opportunities for generic players, and growing outsourcing by global innovators, as seen in the Contract Development and Manufacturing Organization (CDMO) space.

You have been underweight IT and overweight banks. Both haven’t done well. Help us understand your portfolio positioning.

Yes, we have been underweight IT services and marginally overweight Financials as a sector. As of May end, Nifty IT Index has seen a major fall of ~22% over a six month period and has underperformed Nifty 50 by ~12% over the same period.

This has largely been due to a structural shift in technology space, particularly driven by Gen AI and related developments).

Within our Abakkus Investment MEETS framework, we view this as a ‘Trend’ that would require adjustments to business models of Indian IT services firms. In that sense, our underweight position in IT services has worked well.

Within Financials, our overweight positions are largely tilted towards capital market linked plays, which have performed better than banks as a whole.

Over the last six months, as of May end, the Nifty capital markets index is up ~14% compared to a ~9% decline in the Nifty Bank Index.

We attribute this underperformance in banks to aggressive FII selling, despite relatively stable domestic investor flows. However, given recent global macro developments and measures taken by Government and RBI to support currency, we see potential swift recovery in banking names. We remain nimble and will continue to actively adjust our portfolio positioning.

Smallcap stocks appear to be faring better with a few of them even doubling money in a few months despite subdued market mood. In your smallcap fund, how are you positioning yourself in terms of sectoral opportunities?
You are right, as of May end, Nifty Smallcap 250 index has outperformed Nifty50 by ~13% over a three month period. Certain beaten down small cap names have seen sharp rally along with recovery in their growth metrics.

Small cap investing primarily follows a bottom-up approach and that’s how the Abakkus Small Cap Fund is constructed.

We have evaluated opportunities across high growth sunrise sectors, export beneficiaries, companies trading at 30-40% discount to their average valuations with expected growth recovery, and select special situations that can lead to value unlocking.

Accordingly, we have positioned our portfolio to benefit from sectors with strong tailwinds such as electronics manufacturing and its value chain, chemicals, niche engineering companies linked to defence and aerospace value chain, urban construction plays, textiles, gems and jewellery export opportunities and discretionary consumption beneficiaries, along with several other unique small cap ideas.

One of the key strengths of the Indian market is its sectoral depth and diversity, which allows investors exposure to multiple themes.

How bullish are you on AI capex and data centre linked plays in India? Do you think valuations are still attractive?
We believe these are structural themes with multiple years of on-ground investment and execution ahead of us. However, valuations of most AI and data centre investment linked plays in India have run ahead of fundamentals in a very short period of time.

Balancing the strong long-term growth potential with reasonable valuations remains a challenge.

That said, we remain bullish on the space, given it’s a multi-year growth potential. We will continue to evaluate companies based on their fundamental strength and the size of the opportunity, while remaining mindful of valuations.

The government’s new trade measures come into force on July 1

The boss of a Gloucestershire range cooker firm is urging the government to reconsider its steel tariff proposals amid rising costs and fears over competition.

Guy Goring, managing director of Dursley-based Everhot, said the price of steel had already risen ahead of the new rules coming into force next month.

From July 1, the government will cut its tariff-free ⁠quota on imported steel and double the tariff on imports exceeding that allowance in a bid to help UK producers.

But Mr Goring says while the intention behind British steel tariffs is to boost domestic competitiveness, “the reality for manufacturers like Everhot is far more complex”.

“We would absolutely prefer to use British steel, but the sheet steel we require isn’t currently produced in the UK at the scale or specification we need,” he said.

“The proposed tariffs will only ensure UK companies can’t compete against European, US or Asian markets whilst encouraging imports from those same countries.”

Mr Goring says Everhot, which has a purpose-built factory in Gloucestershire, has already seen steel prices “rise around 30 per cent” and delays from stockholders are impacting the company’s production timelines.

“This isn’t just an issue for us – it’s likely to affect manufacturers across the board, from refrigerators to washing machines and beyond,” he said.

A department for business and trade (DBT) spokesperson said: “We want a thriving steel sector in the UK, which is why our new steel trade measure aims to strike the right balance between protecting domestic production and maintaining a secure supply.”

Mr Goring believes the government’s priority should be on reducing energy costs rather than “niche discounts for specific sectors”.

“If the government is serious about supporting British steel and UK manufacturing… affordable electricity is fundamental,” he added. “Without it, the UK simply cannot compete with global markets that are built on access to low-cost energy.”

The DBT spokesperson added: “We fully recognise the challenges the sector is facing on the cost of energy, which is why our modern Industrial Strategy is cutting electricity costs for industries across Great Britain such as steel, and we will continue to work closely with them to help them through tough times.”

It follows a report by manufacturers’ body Make UK which found a growing number of British businesses are moving production overseas amid the challenges facing the sector.

In April, the government announced that electricity bills would be cut by up to 25 per cent for more than 10,000 manufacturing firms through its British Industrial Competitiveness Scheme (Bics)

The scheme comes into force in April 2027 and the subsidy is backdated to this year.

But the boss of Make UK has warned this could be too late for many businesses.

Stephen Phipson, chief executive of the trade body, said: “The time for talking is over. The time for action is now. Britain faces deindustrialisation unless manufacturers get relief from high energy prices.”

CUPERTINO, Calif. — Apple is preparing a significant camera advancement for the iPhone 18 Pro with the introduction of a variable aperture mechanism on the main lens, marking the first time the company has implemented adjustable optics in its flagship smartphone lineup.

Supply chain sources indicate that production of key components for this feature is already underway, with suppliers adjusting timelines to account for added manufacturing complexity. The development signals Apple’s continued focus on computational photography enhancements while addressing longstanding limitations in depth of field and low-light performance.

The iPhone 18 Pro series is expected to launch in September 2027, maintaining Apple’s traditional fall release schedule. While full specifications remain under wraps, the variable aperture upgrade stands out as one of the most concrete details emerging from the supply chain at this early stage.

Variable Aperture Mechanism Gains Momentum

Sunny Optical has begun producing actuators for the variable aperture system destined for the iPhone 18 Pro, according to reports tracking component shipments. LG Innotek is preparing full module assembly at its Gumi facility in South Korea, with production starting in June or July — earlier than typical schedules — specifically to mitigate higher defect risks associated with the new technology.

This mechanical solution would allow the main camera to dynamically adjust its aperture, offering greater control over light intake and depth of field. Current iPhone Pro models use a fixed f/1.78 aperture on the main sensor, relying entirely on software processing to manage exposure and focus. A variable system could open wider in low light for better light gathering or stop down in bright conditions to reduce overexposure and increase sharpness across the frame.

The practical benefits could be substantial for portrait and group photography, where maintaining focus across subjects at different distances has traditionally required computational assistance. Whether the feature delivers meaningful low-light improvements will depend on the actual aperture range Apple implements, with no confirmed f-stop values available yet.

The decision to accelerate production timelines suggests Apple has committed to the technology despite added complexity. Similar mechanisms have appeared in competing devices, though with mixed results regarding thickness and cost. Apple’s implementation is expected to balance performance gains with the premium build standards users expect from Pro models.

Rumored Telephoto Enhancements

Two additional camera upgrades are circulating in supply chain discussions, though with less concrete evidence. A wider telephoto aperture is considered plausible, potentially addressing one of the iPhone 17 Pro’s remaining weaknesses in zoomed low-light performance. The current 48-megapixel telephoto lens uses an f/2.8 aperture, and a larger opening could improve light intake and background separation at distance.

A teleconverter lens element, which would optically extend focal length, has also been mentioned in some reports. Details remain sparse, with no confirmation on implementation, optical trade-offs or whether it would apply to both Pro and Pro Max variants. These features sit at a lower confidence level compared to the variable aperture reports.

A three-layer stacked image sensor from Samsung has been referenced in some analyses, but lacks broad corroboration across sources in the current rumor cycle. Apple has previously used advanced sensor designs to improve dynamic range and processing speed, making further refinements in this area expected.

Design Trade-offs and Device Dimensions

The camera upgrades come with physical consequences. Leaked measurements suggest the iPhone 18 Pro Max will be slightly thicker and heavier than its predecessor. Total thickness including the camera bump is reported to increase, with body thickness also rising modestly. A larger battery is separately rumored, compounding the size increase.

These changes reflect ongoing challenges in balancing advanced optics with compact design. Previous attempts by other manufacturers to implement variable aperture resulted in thicker devices and higher production costs. Apple’s approach appears aimed at minimizing user impact while delivering tangible photographic benefits.

The Pro Max variant is expected to remain the largest and most feature-rich model, potentially offering the most significant camera enhancements. Buyers weighing upgrade decisions will need to consider whether the added bulk is justified by improved image quality.

Market Context and Competitive Landscape

The iPhone 18 Pro arrives in a premium smartphone market where camera capabilities remain a primary differentiator. Samsung and Google continue pushing boundaries with advanced zoom systems and computational features, while Chinese manufacturers emphasize hardware innovation.

Apple’s strategy has historically favored software-hardware integration over raw specifications. The variable aperture system fits this philosophy, using mechanical adjustment to enhance computational photography rather than simply increasing sensor size or megapixel count. The iPhone 17 Pro already standardized 48-megapixel sensors across its rear cameras, suggesting the 18 series will focus on optical and processing refinements rather than resolution jumps.

Pricing is expected to remain consistent with recent Pro models, maintaining Apple’s premium positioning. Trade-in programs and financing options will likely drive upgrade cycles, particularly for users seeking the latest camera advancements.

Consumer Implications and Feature Expectations

For photographers and content creators, the variable aperture could represent a meaningful step forward in mobile imaging. Better control over depth of field and light intake may reduce reliance on post-processing, delivering more natural-looking results straight from the camera.

Casual users may notice improvements in challenging lighting conditions and group shots without needing to adjust settings manually. If Apple automates aperture control, the benefits could reach a wider audience without adding complexity to the user interface.

The iPhone 18 Pro Max is also expected to benefit from a larger battery, potentially offsetting any efficiency losses from more powerful camera hardware. Overall system performance will be powered by Apple’s next-generation chip, with enhanced neural processing for AI-driven photography features.

Supply Chain and Production Insights

Early supplier activity provides the strongest evidence for the variable aperture feature. The accelerated timeline at LG Innotek and Sunny Optical’s actuator production suggest Apple is committed to including the technology despite manufacturing challenges.

Component orders for advanced displays, processors and camera modules are reportedly ramping up, though Apple maintains its usual secrecy around future products. The company’s manufacturing partners in India and Vietnam are expected to play larger roles, continuing efforts to diversify production.

As development progresses, more details are likely to emerge through analyst reports and supply chain leaks. The three months leading up to the expected September 2027 launch will be critical for confirming specifications and user-facing features.

Strategic Importance for Apple

Camera upgrades have long been central to iPhone marketing and user upgrade decisions. The iPhone 18 Pro’s advancements could help maintain Apple’s leadership in mobile photography while addressing areas where competitors have narrowed the gap.

The integration of variable aperture technology represents a shift from purely computational approaches toward hybrid optical solutions. This evolution could influence future smartphone designs across the industry as manufacturers seek new ways to differentiate their imaging capabilities.

Apple’s focus on privacy and on-device processing is expected to extend to the new camera features, ensuring that advanced computational photography maintains user data security. This alignment with the company’s core values strengthens the appeal of the upcoming models.

The iPhone 18 Pro camera story is still developing, but the confirmed variable aperture mechanism provides a solid foundation for expectations. As additional details emerge in the coming months, the device is shaping up to deliver meaningful improvements in mobile photography while navigating the challenges of balancing innovation with practical design constraints.

Consumers and analysts alike will be watching closely as Apple prepares to unveil its next generation of iPhones. The variable aperture system, if executed well, could set a new standard for smartphone cameras and reinforce Apple’s reputation for thoughtful, user-focused innovation in imaging technology.

McDonald’s announced Tuesday that it is bringing back its fried apple pie to celebrate America’s 250th birthday.

The fried apple pies will be available at participating U.S. restaurants for a limited time starting June 23, marking their first broad U.S. rollout in more than 30 years.

“Summer tends to move fast – but the moments worth remembering don’t. And with America’s 250th birthday around the corner, we’re bringing back a fan-favorite and bona fide national treasure made for slowing down and savoring the season: the Fried Apple Pie,” the company said in a press release.

MCDONALD’S TESTING AI DRIVE-THRU ORDER-TAKING SYSTEM CALLED ARCHIQ AT FIVE LOCATIONS ACROSS COUNTRY

“The all-day menu item features our signature filling made with 100% American-grown apples, wrapped in the same golden crunch and flaky fried crust fans remember – or soon won’t forget,” it added.

McDonald’s said the dessert item started as a family recipe in the 1960s, when East Tennessee Owner/Operator Litton Cochran created a fried apple hand pie. 

The treat became a local fan favorite and later a McDonald’s classic.

“There are certain things that just take you back – and the Fried Apple Pie is one of them. It’s something that people love and remember from growing up,” Eric Cochran, McDonald’s Owner/Operator, said in a statement.

“When Ray Kroc was trying to come up with a dessert for McDonald’s, my Grandad, Litton Cochran, suggested a Fried Apple Pie as a classic that people would love. My Grandmom, Jo Cochran, spent months perfecting the recipe. Bringing the Fried Apple Pie back for fans this summer to celebrate America’s 250th just feels right,” he continued.

McDonald’s replaced the fried apple pie in 1992 with a baked pie in most of the U.S. in response to growing consumer awareness about fat and cholesterol consumption.

The U.S. Department of Agriculture also published its food guide pyramid that same year.

MCDONALD’S IS QUIETLY DITCHING A POPULAR IN-STORE FEATURE NATIONWIDE

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Fried apple pies remained on McDonald’s menus in Hawaii and are still sold in other regions around the world, including the United Kingdom, Mexico, Greece, Australia and China.

In addition to the return of the classic dessert, McDonald’s is installing a 35-foot Fried Apple Pie on Route 66 in Joliet, Illinois, near the company’s Chicago headquarters. The giant pie will remain standing through July 4.

A kickoff event will also be held to debut McDonald’s Largest Fried Apple Pie in Chicagoland. The event will feature live music, ice-cold Coca-Cola and complimentary Arch Cards.

Reliance Jio Infocomm could file draft papers for ‌its ⁠expected $4 ⁠billion IPO within days and just before billionaire Mukesh ⁠Ambani‘s closely ‌watched annual speech ⁠on Friday to Reliance Industries‘ shareholders, the Financial Times reported on ‌Wednesday, citing sources.

Reuters could not immediately ⁠verify the report.

At last year’s AGM, Ambani had committed to listing Jio, India’s largest wireless operator, in the first half of 2026, making the upcoming filing a key milestone in that roadmap.
Jio now appears set to miss that timeline following a challenging year for Reliance Industries.
The conglomerate’s shares have declined about 15% in 2026, while net profit for the quarter ended March fell 13% year-on-year, weighed down by disruptions in its core refining business amid turbulence in the Gulf region.

The Rs 88.5 crore IPO of Leapfrog Engineering Services will open for subscription on Wednesday and will close on June 19. The company is expected to list on the BSE SME platform on June 24. Ahead of the issue opening, the grey market premium (GMP) stood at zero, indicating no expected listing gains based on unofficial market activity.

The IPO comprises a fresh issue of 3.46 crore shares aggregating Rs 79.6 crore and an offer for sale of 38.76 lakh shares worth Rs 8.91 crore. The company has fixed a price band of Rs 21-23 per share.

Investors can bid for a minimum of 12,000 shares and in multiples of 6,000 shares thereafter. At the upper end of the price band, the minimum investment for retail investors is Rs 2.76 lakh. High-net-worth investors are required to invest at least Rs 4.14 lakh for three lots.

The issue size totals 3.85 crore shares, of which the net offer to the public stands at 3.66 crore shares after accounting for the market maker portion. Retail investors have been allocated 60.07% of the net issue, while non-institutional investors have been allotted 38.9%. Qualified institutional buyers account for just over 1% of the net offer.

Incorporated in 2005, Leapfrog Engineering Services provides integrated engineering procurement, procurement and construction (EPCC) solutions across sectors such as oil and gas, pharmaceuticals, food processing and metals.

The company offers services spanning electrical engineering solutions, industrial automation, instrumentation, fire protection systems and building automation. It executes turnkey EPC projects and provides installation, commissioning and maintenance services.
Leapfrog Engineering plans to utilise the IPO proceeds primarily for expansion and working capital requirements. Around Rs 27 crore will be used to set up an assembling unit, while Rs 36.05 crore has been earmarked for working capital needs. The remaining funds will be used for general corporate purposes.Financially, the company reported revenue of Rs 137.37 crore and profit after tax of Rs 16.22 crore in FY25. For the nine months ended December 2025, it posted revenue of Rs 105.05 crore and profit after tax of Rs 14.18 crore.

The company cited its experienced management team, diversified project portfolio, global presence and strong order book as key strengths.

Finshore Management Services is the book-running lead manager to the issue, while Integrated Registry Management Services is the registrar. Anant Securities will act as the market maker.

The allotment is expected to be finalised on June 22, with refunds and credit of shares likely on June 23. The stock is scheduled to make its market debut on June 24.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)