India is currently paying an additional $60–70 billion for food and fertiliser imports as a result of higher crude prices, a burden that the government, public companies, and corporates are absorbing but cannot sustain indefinitely.
Even if the Strait of Hormuz reopens by mid-June, he does not expect crude to return to pre-conflict levels, making domestic price hikes unavoidable. However, he remains positive on the economy.
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Gupta likes power equipment and metals on the global side, which he expects to benefit from sustained worldwide capital expenditure in artificial intelligence (AI) infrastructure and defence. In India, defence sits at the top of his conviction list, followed by infrastructure, where balance sheets are solid and cash flows are predictable.
Consumer retail and platform companies remain his strongest long-term conviction bets since. Whether in jewellery, grocery, eyewear, or beauty products, platform businesses, both physical and digital, are steadily taking market share from traditional players, he noted.
He is also positive on commercial office and data centre-linked real estate, and does not expect AI to cause major job losses in India, as global capability centres will absorb work that might otherwise leave Indian IT companies.
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Gupta said the financial services sub-segment — exchanges and insurance in particular — offers the most attractive long-term runway. He prefers banks with lower loan-to-deposit ratios and high liquidity coverage ratios, which he said have the most room to sustain credit growth without a funding squeeze.
He said larger non-banking financial companies (NBFC) players that have already raised capital are better placed to manage a rising-rate environment. He noted that most Indian financials have made preemptive provisions against potential West Asia conflict exposure, and that balance sheet risk is lower than the market may fear – though growth and margin estimates remain too optimistic.
Gupta was more cautious on several sectors facing acute input cost pressure. In Electronics Manufacturing Services (EMS), he said earnings downgrades could run for three to four quarters as rising costs for copper, memory, gold, and silver squeeze margins at companies already operating on thin spreads.
He warned specifically against EMS names with fast revenue growth but weak working capital, where a slip in operating margins can rapidly drain cash flows. In consumer durables, he said diversified premium white goods companies could be worth owning for the longer term, but advised waiting out the next one to two quarters before building positions.
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Narrowly focused consumer durable companies, he added, face the sharpest near-term risk from input costs and competition.
Gupta said hotel stocks have largely priced in the near-term pain and could offer a cyclical opportunity for investors willing to look one to three years out. Airlines, however, remain a caution — operating leverage cuts both ways, and he is not yet ready to step in.
Travel aggregator portals face a different and potentially more structural threat: disruption from agentic AI. He said that investors need to assess each company’s specific AI strategy before taking a position.
For the full interview, watch the accompanying video
Gupta’s overarching thesis is that platform businesses across retail, healthcare, and digital services are currently in a capital investment phase that compresses near-term earnings but sets up a step-change in profitability once the fixed cost base is in place. He included hospitals in this category alongside consumer platforms.
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