Even as markets grapple with geopolitical uncertainty, sectoral opportunities continue to stand out. Abhay Agarwal, Managing Director at Piper Serica Advisors, believes investors should shift focus from macro noise to structural growth sectors such as pharmaceuticals, electronics manufacturing, auto components, and defence. He notes that markets are showing signs of “fatigue” to geopolitical headlines, with volatility moderating and investors cautiously exploring fresh allocations.
Pharmaceuticals—particularly innovation-led and CDMO (contract development and manufacturing) players—are emerging as a key focus area. Agarwal highlighted that several mid- and small-cap companies in this space are guiding for 25–30% annual growth over the next few years.
Unlike traditional generics-focused large caps, these companies are benefiting from global outsourcing trends and specialised capabilities, offering stronger and more durable growth visibility.
The electronics manufacturing services (EMS) and advanced electronics segment is another high-conviction theme. With increasing government focus on domestic manufacturing and reducing import dependence, Indian firms are scaling up capabilities across components and systems.
Agarwal sees this as a long-term structural opportunity, particularly as global supply chains diversify and India positions itself as an alternative manufacturing hub.
Auto components and specialised engineering—especially in areas like forgings and auto electronics—are also gaining traction. Indian companies are increasingly becoming part of global supply chains, benefiting from export opportunities and rising demand for technologically advanced components. This segment, according to Piper Serica, offers a mix of cyclical recovery and structural growth.
Among emerging themes, semiconductors stand out as a critical area, given India's near-total dependence on imports. Agarwal expects a domestic ecosystem to develop over the next five years, supported by policy incentives and rising demand. Defence and related electronics also offer strong visibility, with demand expected to accelerate as India ramps up domestic production capabilities. From drones to surveillance systems, the opportunity set is expanding rapidly.
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