Ajay was also speaking about India’s overall infrastructure space—how it’s interest-rate sensitive and how, gradually, this rate-cut scenario could benefit capital goods and infra. How do you see these two segments panning out? We’ve already seen stocks like ABB India, Siemens, and Thermax gaining over the past four to five sessions, and even the guidance for next year in new-age sectors looks strong. So, how are things shaping up for the infra and capital goods space?
Sudip Bandyopadhyay: We’ve been bullish on this space for over a year now. A couple of things are happening globally. One is the ongoing tariff-related disruptions, which are creating considerable uncertainty worldwide, including in India. This is one sector—whether you call it infrastructure or capital goods—that, at least domestically, is fairly insulated from these tariff-related challenges.
So, if you’re looking for “Trump-proof” sectors in India, this would definitely be one of them. Secondly, the government laid out a capital expenditure plan of over ₹11 lakh crore in the last budget. That spending has now begun in earnest, and it significantly benefits both infrastructure and capital goods.
Private capex, while sporadic, is seeing considerable activity in the power sector, and that’s again a big positive for capital goods companies. Taking all this into account, the space looks promising. We’ve been positive on Larsen & Toubro for a long time and continue to maintain our positive view—it’s a great stock to own if you’re betting on India’s growth story, infrastructure push, or capital goods expansion. Larsen would be our top pick.
Stocks like ABB, Siemens, and BHEL can also be considered, but one needs to be mindful of valuations. In BHEL’s case, operational performance is key. While the last quarter was fine, we’ll have to watch how they execute going forward. There’s no shortage of orders—be it the current order book or future pipeline—but the key is valuation and execution.
Let’s shift to the pharma industry. There’s the domestic side—diagnostics, hospitals, and generics—and then there’s the global-facing side of Indian pharma. How are you viewing the entire medical and pharma space right now, and which part looks attractive at current levels?
Sudip Bandyopadhyay: I’m a bit cautious when it comes to diagnostics. While companies are performing decently and making small acquisitions, margins are under pressure—and that’s likely to continue. The competition is intensifying, and the only real path to growth seems to be via acquisitions. We’re already seeing that—Metropolis recently acquired a cancer-focused diagnostics company. More such deals are likely.
However, considering the margin pressure, valuations, and increased competition—including potential entrants like Amazon—I wouldn’t recommend buying diagnostics stocks at this stage.
The hospital segment, on the other hand, looks very promising. There’s a lot of action here. Global funds and major healthcare players are investing heavily in Indian hospitals, driving consolidation. Larger players are acquiring smaller ones and expanding aggressively, which is a positive trend. Apollo Hospitals, even at current levels, looks strong from a long-term perspective. I would recommend looking at the hospital space with a long-term lens.
Regarding pharma, sentiment improved after Trump’s announcement regarding the 200% tariff—he indicated it would be implemented after a two-year lag. He likely realizes that such high tariffs would lead to significant cost inflation and inconvenience for U.S. consumers. That delay created excitement in Indian pharma stocks, especially those with large U.S. exposure.
I particularly like Sun Pharma. They commercialized a molecule ahead of schedule, which has significant potential, and the stock looks attractive at current levels. I also like domestic-focused companies like Mankind Pharma. With a large share of their sales in the Indian market, they continue to look appealing even at current prices.
