Speaking to Kshitij Anand of ETMarkets, Sood said that he believes the next leg of wealth creation will be led by financials and domestic manufacturing themes, backed by strong balance sheets, government-led capex, and structural reforms under the Make in India and PLI initiatives.
He remains overweight on banks, consumer discretionary, and capital goods, while maintaining a cautious stance on IT and telecom amid muted growth prospects.
Sood also highlights gold’s record-breaking rally, attributing it to central bank diversification and global policy shifts, and identifies long-term opportunities in financialization of savings, quick commerce, and automation-driven efficiency gains. Edited Excerpts –
Q) Which sectors are you overweight and underweight on?
A) Overweight Sectors
A) CRDMO (Contract Research, Development & Manufacturing): Benefiting from global supply chain diversification away from China and sustained pricing pressures in the US/Europe. Indian players enjoy a strong regulatory track record, improving scale, and superior ROIC profiles.
Consumer Discretionary: Supported by rural recovery, festive season demand, and premiumization trends. The anticipated 8th Pay Commission and rising disposable incomes add a medium-term consumption kicker.
Banks & Financials: Large private banks remain well-capitalized, with healthy credit growth, improving asset quality, and strong deposit franchise. NBFCs too are gaining from retail credit demand.
Capital Goods & Infrastructure: Benefiting from government-led capex momentum, PLI schemes, and private capex revival. Order books are at multi-year highs.
Underweight Sectors
IT Services: Growth outlook remains muted due to global macro uncertainty, weak discretionary tech spends in the US/EU, and pricing pressures.
Telecom: ARPU growth has plateaued, competition remains elevated, and capex intensity (5G rollouts) continues to weigh on free cash flows.
Q) The precious metal continued its glitter as Gold hit fresh record highs. What is driving the rally, and what is the outlook?
A) Central banks are diversifying their reserves more aggressively, with global gold holdings now surpassing U.S. Treasuries for the first time in nearly three decades.
This shift is being driven by concerns over inflation, currency volatility, and the need for portfolio security. The Federal Reserve’s recent rate cut and expectations of further policy easing have pushed real yields lower, boosting the appeal of non-yielding assets like gold.
A weaker U.S. dollar, robust central bank purchases, and geopolitical tensions have further underpinned the rally.
Q) Where are pockets of opportunities in this market in case someone has a time horizon of say 3-5 years?
There are a few structural themes that remain intact. The financialization of savings, fuelled by digital advancements and government incentives, is directing household wealth into productive investments.
The financial sector, specifically select mid-sized banks and NBFCs with strong asset quality and growing credit demand. Also, domestic consumption-driven sectors, like certain segments of FMCG and retail, may benefit as inflation moderates and rural demand picks up.
The rapid expansion of quick commerce, enabled by mobile internet and e-commerce growth, is revolutionizing retail, with the market expected to reach $5.5 billion by 2025.
Meanwhile, the “Make in India” initiative, backed by policy reforms like the PLI scheme and the China+1 strategy, is strengthening India’s position as a global manufacturing hub.
Additionally, automation is enhancing efficiency across industries, driving innovation and economic expansion. These high-growth sectors present compelling opportunities for capital deployment.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
