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Investors should look at defensive plays for now: Achin Goel, Bonanza

As March 2025 quarter earnings season nears close, ACHIN GOEL, fund manager, Bonanza Portfolio, tells Sirali Gupta in an email interview that India Inc. is expected to see a recovery in the coming quarters, particularly in the consumer sector, driven by a revival in rural demand. Edited excerpts: Is border tension between India and Pakistan still a concern for the market? Indian markets have shown surprising resilience despite the recent border tensions. This is because investors were betting against a major escalation between India and Pakistan. The ceasefire is holding, but it's not just about border politics – several other positive factors are supporting the market's steady performance: progress on multiple international trade deals, encouraging AMFI data that's boosting retail participation, and growing buzz about foreign institutional investors increasing their India allocations. All these elements together explain why markets remain stable despite what could have been a major destabilising event. Easing border tensions between India and Pakistan is a significant positive for Indian investors; however, we can expect volatility due to ongoing earnings season and global uncertainties, especially tariff-related developments. We advise investors to adopt a balanced strategy focusing on defensive sectors like consumer goods and healthcare for stability, while selectively increasing exposure to domestic manufacturing sectors poised to benefit from shifting supply chains and potential policy support. Government-focused sectors like defence, renewable energy, and electric vehicle (EV) can be also considered to look into for long-term investment. What about financials? Given the current environment, the focus remains on domestic businesses, particularly within the financial sector. Banks, non-bank lenders, and other financial services continue to present compelling opportunities due to their strong fundamentals and growth potential. This sector's robust performance and critical role in the economy make it a key area of interest. How would you assess India Inc.'s performance in the March 2025 quarter (Q4-FY25)? India Inc.'s Q4-FY25 is likely to see revenue grow by 5-6 per cent, which was accelerated by consumer-driven sectors. The overall revenue for FY25 is estimated at 5 per cent, which is likely to be driven by strong performance in consumer-driven sectors like consumer discretionary products, services, and retail. The automobile sector's revenue is likely to grow 6 per cent in FY25, as retail momentum for passenger vehicles picked up and realizations rose owing to a change in the product mix and an increasing share of exports. Despite relatively flat revenue growth, operating profit margins are expected to widen, potentially reaching 8 per cent.