See long-term opportunity in auto parts, aerospace and chemicals: AB Sun Life AMC’s Harish Krishnan

Harish Krishnan, CIO–Equity, Aditya Birla Sun Life AMC, sees opportunities in engineering exports, auto components, aerospace and chemicals as global companies diversify supply chains away from China. The renaissance of engineering exports is one of the key themes the fund house is tracking, he said.

He pointed to Indian auto ancillary and electric vehicles (EV) component makers gaining global scale and added that sectors such as chemicals may face short-term pressure from raw material costs, but could benefit over the next three to four years.

Krishnan said the sharp fall in the Indian rupee could be approaching its final stages, with the government and the Reserve Bank of India (RBI) likely to roll out additional measures to support the currency.

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He said investors should avoid betting against policymakers, adding that authorities are unlikely to allow the rupee to cross the three-digit level against the US dollar. He also noted that rupee depreciation may improve the global competitiveness of Indian exporters over the long term.

Krishnan said low market expectations and management adaptability in the IT services sector could create long-term investment opportunities despite concerns around artificial intelligence (AI).

“Companies hustle. They find a way out,” he said, while adding that several IT firms could emerge stronger over a three-to-five-year period. He also said India’s share of global market capitalisation has returned to around 3%, while the country’s share of world economic activity could rise to 7–8% over the next decade.

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Krishnan further said the April-June quarter may see margin pressure across sectors because of rising input costs, but investors are likely to focus on companies with strong execution and pricing power.

For the entire discussion, watch the accompanying video

He added that cement, building materials, chemicals and auto ancillaries remain areas of interest for long-term investments.