Mayur Patel of 360 ONE AMC identifies manufacturing as a primary growth driver for the next decade, with massive investments expected in data centres and green energy. While near-term earnings may face pressure from higher crude oil costs, the firm anticipates a recovery in the second half of the fiscal year as global volatility eases.
Manufacturing has emerged as a central pillar of India's long-term investment strategy, according to Mayur Patel, President and Fund Manager for listed equities at 360 ONE AMC. The firm views sectors such as renewable energy, power equipment, and semiconductor production as essential components of this growth story. This outlook suggests that government-backed initiatives, which focus on reducing imports and creating domestic capacity, are likely to provide sustained momentum for industrial companies.
Infrastructure and Data Centre Expansion
The rise of artificial intelligence is creating a massive requirement for digital infrastructure in India. Projections indicate that the country may require an investment of approximately ₹10 lakh crore to build 14 gigawatts of data centre capacity over the next five to seven years. This massive infrastructure build-out is expected to create a chain reaction of demand for power-related products. Manufacturers of cables, wires, transformers, switchgears, and power distribution equipment are identified as direct beneficiaries of this surge in utility and infrastructure spending.
Managing Short-Term Volatility
Despite the positive long-term view, the market is currently navigating challenges related to global geopolitical instability. These factors have contributed to higher crude oil prices, which may weigh on corporate earnings in the June quarter. While such pressures can impact profit margins, the firm expects a recovery in earnings strength during the second half of the current fiscal year. Investors are often tasked with distinguishing between these temporary cost-related setbacks and structural risks to the business cycle.
Financial Sector and Fund Positioning
The financial sector remains a key part of the broader market index, though portfolio allocations are currently only slightly overweight. Private banks show potential due to healthy credit growth and stable asset quality, while non-banking financial companies are benefiting from an uptick in the commercial vehicle cycle. Furthermore, liquidity in the banking system is expected to be supported by inflows from FCNR(B) deposits, which helps banks manage their deposit mobilization efforts.
360 ONE AMC’s investment approach utilizes a framework that categorizes stocks into secular, cyclical, defensive, or value traps. This strategy allows the fund to shift between large, mid, and small-cap stocks based on bottom-up analysis rather than adhering to rigid market-cap targets. Currently, the fund maintains roughly half of its portfolio in small and mid-cap companies. The key monitorable for investors will be how effectively manufacturing companies manage execution costs and scale their production capacity to meet the projected rise in infrastructure and energy demand.