Chandan said lower income taxes, easing interest rates, free trade agreements (FTAs) and a weaker rupee could support manufacturing, exports and corporate capital expenditure. He added that the improving demand outlook is encouraging companies to expand capacity, creating investment opportunities across cyclical and domestic sectors.
Among sectors, Chandan said pharmaceuticals remain one of Bajaj Finserv AMC’s preferred areas. The fund house has stayed positive on the sector for the past three years, helped by opportunities in US generics, growth in contract development and manufacturing (CDMO) businesses, domestic demand and currency tailwinds.He added that the sector has benefited from multiple drivers, including the Biosecure Act, export opportunities and healthy domestic demand. He also disclosed that Bajaj Finserv AMC has investments in Biocon.
Beyond healthcare, Chandan said the fund house remains bullish on metals, financials, industrials, consumer discretionary and real estate. He noted that automobile demand remains strong despite higher fuel prices and vehicle price hikes, while larger listed real estate developers continue to gain market share with stronger balance sheets.
He also sees opportunities emerging in sectors linked to housing, including tiles, paints and ceramics, as the real estate cycle matures.Chandan said investors should also look beyond momentum trades. He believes several sectors that have lagged over the past two years are now trading at attractive valuations despite improving fundamentals.
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.
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. 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 demand in metals to remain supported by higher global defence spending, supply chain diversification and inventory rebuilding. He also said Indian low-cost producers could benefit from a weaker rupee and ongoing capacity expansion.
Chandan added that Bajaj Finserv AMC also likes the sugar sector, citing improving pricing and diversification into ethanol and power, while noting that valuations remain attractive.
For the full interview, watch the accompanying video
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