Among sectoral bets, Gunwani remains positive on defence for the long term but says investors are increasingly looking beyond large public sector companies due to concerns over margins, execution and government pricing pressure.
Niche companies linked to defence, aerospace, oil and gas and engineering services are gaining investor attention amid a broader global capital expenditure cycle.“I think some of the smaller names which cater to a mix of defence, oil and gas are very interesting plays to look at,” he said.
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In other sectors, he said, “If it [crude] remains above 90, I don’t see too much upside on the domestic stocks like banks, autos, etc,” he said.He also pointed to the growing global interest in artificial intelligence-related investments as a challenge for Indian equities in attracting foreign capital. According to Gunwani, investors are allocating more money to AI-linked markets and sectors including semiconductor companies, data centres, electrification and commodities.
“The competition for capital for India is very strong at this point of time,” he said.
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Gunwani is constructive on manufacturing exporters, particularly companies in pharma, engineering and auto ancillaries.
“We are basically looking at manufacturing exporters,” he said, adding that India could see policy support and currency-related tailwinds if IT services growth slows down.
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Gunwani also expects governments globally to focus more on energy security following disruptions caused by the Ukraine and Iran conflicts. He believes countries may increase investments across coal, nuclear, refining and energy infrastructure to avoid supply chain disruptions.
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