Selective sector bets key as markets ride policy and growth tailwinds – News Air Insight

India’s equity markets are riding on government initiatives, sectoral tailwinds, and improving investor sentiment. Chakri Lokapriya, in an interview with ET Now, outlined his outlook across infrastructure, defence, and financials, while sounding cautious on life insurance.

On the infrastructure side, he pointed to the critical role of construction equipment makers.

“Whether it is a dam, a house, or an office, all need cranes and JCBs. Companies like ACE and BEML have moved into manufacturing their own equipment. With government support, they can benefit big time,” he said. Lokapriya added that the Production-Linked Incentive (PLI) scheme, which had boosted other industries earlier, could act as a catalyst for these firms if applied effectively.

Defence manufacturing, particularly drones, is another emerging theme. “There is no standalone drone manufacturer yet, but Bharat Electronics and HAL are entering the space,” he observed. He noted that India’s defence spending is steadily rising, and the country’s strong talent pool is helping shorten time-to-market for new technologies. “This positions India well in high-tech warfare. The big players like BEL and HAL will benefit, with startups supplying to them,” he added.

NBFCs have been among the strongest performers this year, with some stocks gaining over 80% on a year-to-date basis. Lokapriya believes the trend has room to continue. “NBFCs are in a good space. Bajaj Finance benefits from GST cuts and higher auto volumes. Muthoot is supported by high gold prices, while Shriram Finance gains from rising transport demand,” he said. “As interest rates come down, margins and loan volumes should improve further, making us buyers of NBFCs.”

On the other hand, he was less optimistic about the life insurance sector. “The GST cut is a big volume driver, but pricing remains weak. Competition is intense, so we stay away,” he remarked.Also read: Technology sector based mutual funds lose 4% in 1 year. Will Trump’s H1-B visa policy add more pressure?With infrastructure and defence gaining traction and NBFCs set to ride the next leg of the credit cycle, Lokapriya believes selective sectoral bets will be crucial. While opportunities are abundant, he underlined that investors must be discerning, especially in industries facing structural headwinds like insurance.