Global trade tensions, rapid technological shifts, and geopolitical uncertainty are keeping markets on edge. But for Sachin Relekar, Senior Fund Manager at Axis Mutual Fund, the turbulence masks compelling long-term opportunities hiding in plain sight.
Here’s what he’s watching — and what he’s avoiding.
Markets will stay volatile — but India’s foundations are solid
Relekar is clear-eyed about the road ahead. Geopolitics, trade policy swings, and AI-driven disruption will keep volatility elevated. However, he stresses that India’s domestic policy environment remains a key stabiliser.
“The policy environment domestically remains very stable,” he said in a recent interview with ET Now. “Balance sheets are very stable and therefore these are spaces where investors should keep looking.”
His message to investors: resist tactical, short-term thinking. The real prize lies in riding structural trends over three to five years.
Top picks: 3 sectors Relekar is bullish on
1. Consumer internet
This is Relekar’s highest-conviction call. He believes platform-based businesses are approaching a profitability inflection point that most investors are underestimating. With low capital intensity, fast consumer adoption, and a massive addressable market, he expects cash generation from these companies to surge significantly over the next three to four years.
“Once the profitability comes through, the capital efficiency of these businesses can be sharply higher,” he noted.
2. Financials: A decade-low valuation opportunity
Large private sector banks are trading near decade-low valuations, and Relekar sees this as a straightforward medium-term opportunity. Asset quality across most balance sheets is clean, lending books are healthy, and valuations are no longer demanding by any historical standard.
“Price-to-book ratios are not demanding. You don’t need to go down the quality curve here,” he said, adding that a three-year-plus horizon should reward patient investors handsomely.
3. Metals: More predictable than you think
Forget the volatile metals sector of the past. Relekar argues that both ferrous and non-ferrous metals now offer far greater earnings predictability. Steel benefits from strong domestic demand and government import protection policies. Aluminium faces a structural supply deficit over the medium term, making it an attractive hold.
Post-COVID balance sheet deleveraging across metal companies further reduces risk, with most capital expenditure now funded through internal accruals.
Also watching: Defence, CDMO, energy transition & capital goods
Beyond his top three, Relekar flagged several other structural themes worth tracking — defence manufacturing, pharma CDMO (Contract Development and Manufacturing Organisations), energy transition infrastructure, and capital goods linked to automation, AI, and data centres.
He is, however, cautious about going too far down the market-cap ladder in infrastructure and construction, where competitive intensity is high and free cash generation through the cycle remains weak.
What he’s avoiding
Relekar’s sell signal is straightforward: avoid companies with weak pricing power in an environment where input cost pressures are building. Any sector where competitive intensity is so fierce that price hikes simply cannot be passed on to consumers is vulnerable to margin erosion.
“Where the ability to pass on prices is not very clear — that is something one needs to be very wary about,” he cautioned.
The bottom line
Volatility isn’t going away, but Relekar’s framework offers investors a clear compass — lean into strong balance sheets, structural growth themes, and beaten-down valuations. Avoid businesses without pricing power. And above all, think in years, not weeks.