“Both of them have a multiplier impact and are likely to give a significant advantage to Indian manufacturer, both from an import substitution perspective and export-oriented perspective,” he said, adding that the combination “will drive this segment… in a very very significant way.”
Drawing parallels with the period following the Russia-Ukraine conflict, he said markets have gradually looked beyond macro risks as supply chains stabilise and oil prices become less disruptive.
“India has same drivers of the growth,” he said, pointing to opportunities across manufacturing, banking and financial services, consumer businesses, healthcare and contract drug manufacturing (CDMO). “India is such a beautiful broad-based story that you can play out what you want.”
He is equally confident that the manufacturing theme has many years of growth ahead. According to Khemani, manufacturing currently accounts for around 15-16% of Biocon (GDP) and could rise to 22-25% over time, making it a structural opportunity that could play out well into 2035. While individual sectors such as chemicals or capital goods may go through cyclical ups and downs, he believes the broader manufacturing story remains intact.
Khemani said investors should avoid treating manufacturing as a single trade. Instead, they should focus on identifying businesses with strong capabilities and favourable risk-reward, as different sub-sectors will outperform at different stages of the cycle.
On individual companies, he reiterated his positive view on Biocon, saying the company is entering a new phase of growth over the next three to five years. He believes the market often underestimates businesses with strong capabilities because short-term concerns overshadow their long-term potential.
Watch the full conversation here
Explaining Carnelian’s investment philosophy, Khemani said the firm does not invest simply because a stock appears cheap. Instead, it looks for businesses where strong capabilities are backed by a clear catalyst or inflection point that can drive sustained earnings growth. He said this approach had worked well in the past and continues to guide the firm’s investment decisions.
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