India's equity market is entering a broader growth phase supported by policy changes, improving domestic demand and exports, according to Nimesh Chandan, Chief Investment Officer at Bajaj Finserv Asset Management Company. As reported by CNBC TV18, Chandan expects these factors to create opportunities across sectors and believes the market is no longer dependent on a handful of themes. The fund house maintains positive positions across pharmaceuticals, real estate, metals, financials and consumer discretionary sectors, while maintaining a selective underweight stance on IT.
Bajaj Finserv AMC has maintained a positive stance on pharmaceuticals for the past three years, helped by opportunities in US generics, growth in contract development and manufacturing (CDMO) businesses, domestic demand and currency tailwinds. According to the report, the sector has benefited from multiple drivers including the Biosecure Act, export opportunities and healthy domestic demand. The fund house has investments in Biocon and expects the sector to continue benefiting from these structural tailwinds.
Chandan expects demand in metals to remain supported by higher global defence spending, supply chain diversification and inventory rebuilding. As reported by CNBC TV18, he also said Indian low-cost producers could benefit from a weaker rupee and ongoing capacity expansion. The fund house remains bullish on metals, financials, industrials, consumer discretionary and real estate sectors, with automobile demand remaining strong despite higher fuel prices and vehicle price hikes.
Chandan believes investors should look beyond momentum trades, noting that several sectors that have lagged over the past two years are now trading at attractive valuations despite improving fundamentals. According to the report, he expects turnaround opportunities to emerge in fast-moving consumer goods (FMCG), retail and digital consumer businesses, arguing that investors should focus on the longevity of earnings growth rather than headline valuation multiples alone. The fund house also likes the sugar sector, citing improving pricing and diversification into ethanol and power.
While Bajaj Finserv AMC continues to remain underweight on information technology (IT), Chandan said the fund house has reduced that underweight selectively after the correction in valuations. As reported by CNBC TV18, the firm has evaluated individual companies based on how artificial intelligence could affect their business lines and client exposure rather than taking a broad sector view. Chandan expects lower income taxes, easing interest rates, free trade agreements (FTAs) and a weaker rupee to support manufacturing, exports and corporate capital expenditure.
