He said WhiteOak does not take a top-down approach to investing. Instead of shifting allocations between large, mid and smallcap stocks, the firm focuses on identifying businesses that can consistently outperform their respective sectors.
According to him, different market-cap segments tend to outperform at different points in the cycle, making it difficult to predict winners with confidence. Rather than making broad market calls, the investment team prefers to create value through careful stock selection.
On the global front, Khemka acknowledged that AI-linked stocks have become more volatile after a prolonged rally. While sentiment around artificial intelligence has weakened in recent weeks, he believes it is too early to predict whether the trend will continue. He added that India has benefited during periods when investors have reduced exposure to AI-focused stocks globally.
Despite the uncertainty, Khemka remains constructive on the technology sector over the long term. He expects companies to continue spending on technology and believes AI will reshape the industry rather than reduce its importance.
“My view is some of these midcap companies where execution is very strong they will transform faster than some of the larger companies. I am not saying in general, all mid-cap companies would transform better, so there will be a new reality with AI, new skill sets required. And those who are able to transform their workforce capabilities faster and in a more nimble manner, they will gain market share during the transition,” he said.
Healthcare, NBFCs and defence remain preferred sectors
Looking ahead, Khemka said healthcare continues to be one of WhiteOak’s preferred sectors because of the wide range of listed businesses across pharmaceuticals, hospitals and diagnostics. The sector offers enough diversity to identify companies capable of generating superior returns.
He also sees attractive opportunities in select non-banking financial companies (NBFCs), particularly smaller lenders serving lower-income borrowers. Many of these companies witnessed sharp corrections following concerns over unsecured lending and rising oil prices, but valuations remain appealing in several cases, he said.
Within industrials, WhiteOak continues to like private-sector defence companies and selected capital goods and machinery businesses. Khemka added that the firm also remains positive on parts of the new-age economy where it continues to find quality businesses.
Manufacturing pipeline remains strong
Khemka also highlighted the growing pipeline of investment opportunities in India’s private markets. He said manufacturing has emerged as the most active area for entrepreneurs over the past few years, spanning precision engineering, industrial components and specialised manufacturing.
He added that chemicals, healthcare, fintech and defence are also generating significant entrepreneurial activity, supported by favourable policy changes and expanding domestic opportunities.
“The number of entrepreneurs in India… the entrepreneurial energy is amazing here.”
Khemka believes the growing base of innovative businesses could reshape several industries over the next decade as more companies build capabilities across manufacturing and technology.
