According to the latest interview with NDTV Profit, Ajay Khandelwal, Head of Equities at Motilal Oswal Asset Management Company, has identified financials, capital goods and manufacturing as the three core sectors for a model portfolio in the second half of FY27. These sectors offer a combination of growth and earnings visibility, with Khandelwal expecting financials to benefit from healthy credit growth and supportive liquidity. For capital goods and manufacturing, he sees a longer-term runway from government and private-sector capital expenditure, infrastructure spending and the broader China+1 opportunity.
As reported by NDTV Profit, Khandelwal acknowledged that Indian equities remain richly valued, with the Nifty trading at around 20-21 times trailing earnings. However, he believes these valuations need to be considered alongside the earnings outlook. The investment expert noted that healthy corporate balance sheets, improved return on capital employed and a supportive macroeconomic environment could help sustain earnings growth. If earnings deliver sustained double-digit growth, Khandelwal believes current valuations can be absorbed over time, though he stressed his approach is not to chase momentum. His broader sector preference includes domestic consumption and power over the next six to 12 months, along with select industrials.
Beyond the core sectors, Khandelwal would selectively add new-age technology and healthcare to provide further opportunities. New-age technology offers structural growth from digitisation and artificial intelligence, although Khandelwal has cautioned that AI is creating a structural shift within the IT industry. Companies that adapt to AI-led spending and move up the value chain should emerge stronger, he said. Healthcare offers a combination of defensive characteristics and long-term growth, providing diversification benefits to the overall portfolio strategy.
As reported by NDTV Profit, for mid- and small-cap investors, the emphasis remains on selectivity rather than broad-based exposure. Khandelwal's preference is for businesses where earnings growth, balance-sheet strength and market-share gains remain intact and where the longer-term earnings runway can justify current valuations. His QGLP (Quality, Growth and Longevity) approach continues to be central to his investment strategy, focusing on quality, growth and longevity while remaining mindful of price considerations. "Our approach is not to chase momentum, but to identify QGLP companies where the earnings runway can justify the valuation," Khandelwal emphasized.
According to The Economic Times, Vikas Pershad, Fund Manager at M&G Investments managing about 400 billion pounds sterling in assets, argues that investors need to look beyond short-term market noise and focus on long-term earnings growth, return on equity and structural changes in the economy. Despite India's relatively elevated valuations, Pershad believes the market is 'pricey, not necessarily expensive' when investors are getting strong earnings growth, high ROEs and increasing formalisation. He remains constructive on India's long-term prospects, particularly in areas such as precision manufacturing, healthcare services and defence, emphasizing that active stock selection will become increasingly important as India's investable universe expands.
