One key themes to watch for is defence, said Anand and Shenoy.
“We started off thinking that the defence order book would be small and it would largely be industrial explosives and packed explosives,” Shenoy said. “But not only are they getting orders in hand grenades, rocket ammunition, aerial command centre, one of the new drones they have [at the Defence Expo] can actually carry loads up to 4 kg.”
“What’s important here is you have to look at orders, not just the current order book but the order execution year wise, what are the long-term orders like in year five or six years,” he said. “There are milestone payments to orders and working capital can become a bit of an issue.”
Shenoy is bullish on something he calls ‘maha trends’, things that have changed India in a way that we couldn’t have imagined before.
“There is a major trend in UPI, which has changed the way India transacts. There’s ONDC, which is coming up as a very big trend. There is a massive change in logistics worldwide, and also in India,” he said. “Within India, whether it is road transport, rail transport with a dedicated freight corridor, linked with ONDC, or the logistics provisioning that is happening in in various fronts, I think India is in for a very, very big changes. These are of course the larger trends over there.”
Shenoy sees the growing popularity of financialisation within the country where people are investing more into financial assets rather than real estate and gold.
“About 75 or 80% of our stocks sit either straddling or particularly focused on some of these themes,” he said. “We’re also adding Indian consumption… but I’m playing this for a five- or six-year period.”
The remaining parts of the portfolio, they said, would be shorter term, focused on interesting opportunities that could be realised in the next one to two years.
Anand said he is bullish on banking theme as well, based on the performance so far.