Manulife's Rana Gupta favours digital transition, power equipment and advanced manufacturing

Detailed summary

Rana Gupta, Senior Portfolio Manager & India Equity Specialist at Manulife Investment Management sees India's equity rally broadening, with opportunities emerging from AI adoption, rising power demand, energy transition and advanced manufacturing.

Rana Gupta, Senior Portfolio Manager and India Equity Specialist at Manulife Investment Management, expects the Indian equity rally to broaden as exogenous headwinds recede and artificial intelligence (AI) adoption moves downstream.

The recent outperformance of domestic markets represents more than just a temporary rotation. Tariff issues that previously roiled markets are largely resolved, and while oil remains volatile at 95-plus levels, prices appear to have peaked. Furthermore, as the global AI trade shifts from upstream capital expenditure in chips to mainstream inferencing, India is positioned to capture downstream opportunities.

"In fact, globally, we are seeing that the markets are broadening and that should be favourable for India," Gupta noted, adding that underlying fundamentals and recent quarterly corporate earnings have remained strong.

Against this backdrop, Manulife Investment Management is focusing on three primary themes: digital transition, energy transition, and advanced manufacturing.

Within the digital space, the preference is for companies investing in physical infrastructure across quick commerce, beauty and personal care, and the eye care segment. These businesses act as AI adoption plays by using data science to plan their next warehouses and stores. Because digital business models reward market leaders who dominate the supply chain and customer data, execution takes precedence over immediate pricing concerns.

"If the business execution is good and the long-term growth runway is good, I will be tolerant of a bit of a higher valuation in the near term because the earning growth rate of this company is going to be so strong that the valuation will normalise as we roll forward to the subsequent years," the portfolio manager explained.

Energy transition and power equipment form the second structural opportunity, directly linked to the technology boom. As AI enters the inferencing stage, it demands massive power and data center capacity.

Simultaneously…

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