Sudip Bandyopadhyay bets on pharma, metals and select cyclicals as geopolitical risks ease

The easing of tensions in West Asia has emerged as a significant positive trigger for global markets, and investors are now reassessing opportunities across sectors that were impacted by the prolonged conflict. According to market veteran Sudip Bandyopadhyay, the end of the conflict is not only good news for financial markets but also for economic activity and global stability.

Speaking to ET Now, Bandyopadhyay said his investment strategy remains focused on sectors where earnings visibility and long-term growth drivers remain intact. Among the key themes he continues to favour are pharmaceuticals, healthcare, specialty chemicals, agrochemicals, education, and metals.

Pharma and Chemicals Remain Preferred Bets
Bandyopadhyay noted that pharmaceutical and healthcare companies continue to offer attractive opportunities. He also remains constructive on the specialty chemical and agrochemical space, describing it as a classic turnaround story.”Well, of course, today, as we all know, it is very good news. The West Asia conflict ending is good news for the markets, good news for the economy, and good news for pretty much mankind. So, we leave that point at that. But as far as buying is concerned, we have been very focused and we have been recommending buying in pharma, healthcare. We have been selectively recommending buying in the speciality chemical, chemical, agrochemical space because we believe it is a classic turnaround case and the West Asia conflict ending will remove the supply chain bottlenecks and raw material price increases which they were facing in the recent past.”

The easing of supply chain disruptions and stabilisation in input costs could help improve profitability across the chemical sector over the coming quarters.

Education Sector Offers Niche Opportunities
Apart from traditional sectors, Bandyopadhyay highlighted select higher education companies that operate differentiated business models and generate higher average revenue per user (ARPU).”The other sector I have been looking at is some of the education, particularly higher education companies, where the model is differentiated and the ARPUs are significantly higher, like a company like Jaro Education.”

The education technology and higher-learning segment continues to attract investor interest as demand for professional upskilling and specialised courses remains strong.

Metals Continue to Shine
Among his strongest sectoral convictions is the metals and mining space. He believes the global supply-demand dynamics continue to support higher prices across both ferrous and non-ferrous metals.

“The last space where we have been positive has been metals and mining. There is a secular upside in metals and mining and this is going to continue for the foreseeable future, so we have been by and large positive on ferrous as well as non-ferrous.”

Discussing aluminium specifically, he pointed to elevated global prices and ongoing supply constraints that are supporting the sector.

“Take aluminium. We are at all-time high or four-year, five-year high prices. Aluminium is quoting globally with a lot of traction going forward. Ten percent of the world production is out for the foreseeable future. Obviously, the prices will remain firm.”

Within the space, he identified Vedanta and Nalco among his preferred picks, while also expressing optimism on steel producers such as JSW Steel and Tata Steel.

“Both Vedanta and Nalco look good. You can look at some of these steel companies as well. So, we like JSW, we like Tata Steel. Tata Steel is definitely looking good with Europe also starting to show positive signs of development.”

Caution on MTAR Technologies After Sharp Rally
On MTAR Technologies, which has witnessed a remarkable rally over the past six months, Bandyopadhyay advised caution for fresh investors.

The stock recently came under pressure following concerns related to Bloom Energy, one of its key customers, before rebounding after management clarified the situation.

“Fresh buying is definitely not recommended.”

He also highlighted the concentration risk associated with the company’s customer base.

“One more point I wanted to make, which probably a lot of market participants were not aware of, is that they have a significant portion of their orders coming from Bloom Energy. I understand it is close to 50%.”

While he stopped short of recommending an outright exit, he suggested investors maintain strict risk controls.

“With the kind of PEs, with the kind of single-client dependence, with the kind of run-up it has seen over the last six months, one has to be extremely careful and operate maybe with a strict stop loss.”

Real Estate Set to Benefit from Improved Sentiment
The resolution of geopolitical tensions could also prove beneficial for the real estate sector, which faced challenges ranging from supply disruptions to delayed purchase decisions by non-resident Indian buyers.

“For real estate, it was definitely not a happy situation and a resolution to the conflict will definitely spring back in their steps.”

Among listed developers, Bandyopadhyay remains positive on DLF, citing its extensive land bank and strong execution capabilities.

“Amongst the real estate companies, we do like DLF and we have been liking DLF for a very long time. With the kind of land bank they have, they have a fantastic way forward.”

He also expressed preference for Sobha in the southern market and Godrej Properties in western India.

Looking Beyond Oil Producers
While falling crude oil prices are expected to benefit several industries, Bandyopadhyay is avoiding direct exposure to upstream and downstream oil companies due to regulatory uncertainties and pricing controls.

“I will definitely not look at upstream and downstream companies.”

Instead, he prefers sectors that benefit indirectly from lower energy costs.

“If I have to play this oil price movement up or down, I will rather focus on the companies which are getting impacted by that.”

Tyre manufacturers, paint companies, chemical producers and tile makers are among the segments likely to gain from lower input costs.

Among paints, he singled out Asian Paints as a long-term investment opportunity.

“Asian Paints has demonstrated its strength and the last quarterly performance was a clear indication of that. From a long-term perspective, Asian Paints definitely is a good buy.”

He also indicated that select tyre companies could benefit from softer crude-linked raw material costs.

Investment Strategy Remains Selective
While geopolitical developments have boosted market sentiment, Bandyopadhyay’s approach remains rooted in sector-specific fundamentals rather than broad market momentum. His current preferences span healthcare, specialty chemicals, higher education, metals, select real estate names, paints and tyre manufacturers, while he remains cautious on stocks that have witnessed excessive valuation expansion without adequate room for execution errors.