According to reports from The Economic Times, Sachin Relekar, Senior Fund Manager at Axis Mutual Fund, has identified three key sectors for long-term investment opportunities. His highest conviction call is consumer internet, where he believes platform-based businesses are approaching a profitability inflection point. He expects these companies to generate significant cash flow over the next three to four years due to low capital intensity and fast consumer adoption. In the financial sector, large private sector banks are trading near decade-low valuations, with clean asset quality and healthy lending books. For metals, both ferrous and non-ferrous offer greater earnings predictability than in the past, with steel benefiting from strong domestic demand and aluminium facing structural supply deficits. As reported by ET Now, Relekar notes that "Once the profitability comes through, the capital efficiency of these businesses can be sharply higher."
As reported by The Economic Times, Relekar acknowledges that global trade tensions, rapid technological shifts, and geopolitical uncertainty will keep markets volatile. However, he emphasizes that India's domestic policy environment remains very stable with balance sheets staying strong. His message to investors is to resist short-term thinking and focus on structural trends over three to five years. According to ET Now, Relekar stresses that "The policy environment domestically remains very stable. Balance sheets are very stable and therefore these are spaces where investors should keep looking." Beyond his top three picks, he has flagged several other structural themes including defence manufacturing, pharma CDMO (Contract Development and Manufacturing Organisations), energy transition infrastructure, and capital goods linked to automation, AI, and data centres.
According to the report, Relekar's investment approach includes clear avoidance criteria. He cautions against companies with weak pricing power in an environment where input cost pressures are building. Any sector where competitive intensity is so fierce that price hikes cannot be passed on to consumers is vulnerable to margin erosion. He specifically warns against going too far down the market-cap ladder in infrastructure and construction, where competitive intensity remains high and free cash generation through cycles remains weak. As reported by ET Now, Relekar's sell signal is straightforward: "Where the ability to pass on prices is not very clear — that is something one needs to be very wary about."
As reported by The Economic Times, Relekar's investment framework emphasizes leaning into strong balance sheets, structural growth themes, and beaten-down valuations. His approach focuses on companies with clear pricing power and avoids sectors where competitive dynamics make profitability challenging. His three-year-plus horizon for private banks is designed to reward patient investors as these sectors offer attractive valuations compared to historical standards. According to ET Now, his framework offers investors a clear compass to "lean into strong balance sheets, structural growth themes, and beaten-down valuations. Avoid businesses without pricing power. And above all, think in years, not weeks."
