According to George Joseph, Chief Investment Officer & CEO–Equity at ASK Investment Managers, India's long-term fundamentals remain robust despite global uncertainty. As reported by CNBC TV18, Joseph projects that GDP could potentially double in 7–10 years, indicating strong confidence in the country's economic trajectory. This optimistic outlook comes amid global market volatility and economic uncertainties affecting international markets. Amit Gupta, Executive Group Vice President at Motilal Oswal Private Wealth, echoes this sentiment, noting that markets are showing resilience despite crude oil hovering near $105–110 per barrel. Portfolios had been holding 20–25% in cash but that capital is now being deployed across select high-conviction themes.
Both investment managers have identified specific sectors as key investment opportunities for the current market environment. Joseph favours cyclical sectors including banks, autos, capital goods, real estate, and defence, as reported by CNBC TV18. Gupta's primary allocation is going into power sector, driven by intense summer season, possible El Niño impact, and surging electricity demand. Peak power demand hit 242 gigawatt last year and has already touched a new high of 256 gigawatt this year, expected to reach 271 gigawatt. The investment manager is particularly bullish on the entire power value chain, driven by artificial intelligence-led data centre demand, with India's Central Electricity Authority projecting total energy capacity doubling from 538 gigawatt to 1,121 gigawatt over the next decade.
Gupta favours mid-size private sector banks, particularly those based in south India with 900–1,000 branch networks. His reasoning is backed by strong financial metrics: some of these banks are growing credit at 17% against an industry average of 11–12%, achieving deposit growth of 16%, return on assets above 2%, return on equity of 18–19%, and gross NPA ratios as low as 0.7%. He is more cautious on PSU banks in a rising bond yield environment, noting their larger government securities holdings could dent treasury profits. The banking sector represents a significant opportunity given the current growth trajectory and improved asset quality metrics.
Gupta's second high-conviction sector is auto ancillary, specifically export-oriented companies set to benefit from upcoming Free Trade Agreements with Europe and the UK, expected to be finalised in FY27. Within this space, he highlights a niche opportunity in decorative aesthetics, components that enhance the look and luxury feel of vehicles rather than core mechanical parts, which carry margins of 24–30% and several are available at market caps of around ₹5,000 crore. Textile exports are also on his radar for similar FTA-driven reasons, particularly in the mid and smallcap space. This sector represents an underappreciated export story with significant growth potential.
Both investment managers maintain a constructive long-term view despite current market challenges. Gupta acknowledges that IT valuations are attractive but execution remains the problem, with project delays preventing revenue conversion. Among large IT companies, AI exposure in order books has grown from 5–5.5% to 7.5% at TCS, but overall penetration remains low. For indirect AI plays, Gupta points to data centre equipment and server ancillary companies, genset manufacturers supplying uninterrupted power to data centres, and rare earth companies, noting that India holds approximately 8% of global rare earth reserves. The investment strategy reflects a selective approach focusing on sectors with strong fundamentals and growth prospects in the current market environment.
