According to reports from CNBC TV18, M&G Investments continues to remain cautious on Indian IT services and consumer staples, even after recent valuation corrections. Deepika Mundra, Director of Equity Research-India at M&G Investments, stated that while IT multiples have corrected, the fund does not see the same earnings power as in the past. She emphasized that "IT multiples have corrected, but do we see the same earnings power as we have seen in the past? We don't think so. I don't think we're there yet." For consumer staples, changing distribution channels are creating more competition, with Mundra noting that "You can't have both growth as well as increasing margins." She also sees limited near-term opportunities in consumer staples as quick commerce, direct-to-consumer brands and private labels have increased competition. Mundra acknowledged that valuations in these themes have risen sharply, making fresh entries more difficult.
As reported by CNBC TV18, M&G Investments has identified healthcare services as a significant overweight, with opportunities across hospitals, diagnostics, dialysis companies and contract development and manufacturing organisations (CDMOs). The fund expects earnings potential to remain strong over the medium term across these healthcare segments. Mundra sees opportunities in precision manufacturing, aerospace and auto components as other attractive areas. She highlighted that "We always say that volatility is our friend, and velocity is a more difficult challenge to handle, particularly in the India market." The fund has added exposure to precision manufacturing, industrial companies, electrical components and auto components during the past couple of quarters, particularly after some stocks corrected on margin concerns. Within auto components, M&G is particularly focused on companies with their own intellectual property rather than businesses that are primarily metal processors, pointing to areas such as unique suspension technology and electronic control units (ECUs) as examples.
According to CNBC TV18, M&G Investments continues to prefer private-sector banks, supported by valuation comfort and healthy credit growth. However, Mundra noted that the weight of private banks in the portfolio is lower than it was five years ago due to India's expanding market and rise in IPOs creating a wider opportunity set for active investors. She explained that "Your portfolio no longer looks like the old banks, IT, and consumer that it used to five years back."
As reported by CNBC TV18, Mundra indicated that M&G's India-dedicated strategies have remained consistent in terms of assets under management and have not been sellers in the Indian market over the past couple of years. She added that allocations towards India from its broader strategies also increased somewhat during the last quarter. The April-June quarter of 2026 (Q1FY27) earnings provided some support to the market view, with the quarter turning out slightly better than expected. Mundra noted that large-, mid- and small-cap earnings were also slightly ahead of expectations on balance, with commercial vehicle demand and credit growth among the encouraging indicators.
