PSU Banks, Real Estate And Infrastructure Key Investment Sectors, Say Experts

Madhusudan Kela and Neelkanth Mishra at the NDTV Invest 2029 event (Source: NDTV Profit)

The markets have been on a rollercoaster ride this week, with Sensex and Nifty breaking records on Monday and then seeing a dip on Tuesday when the Lok Sabha election results were declared.

While the markets continue to be relatively volatile, analysts suggest that PSU banks, real estate and infrastructure sectors will see growth in the next few years.

"(In) my view, there will not be meaningful change in policymaking. Be it NDA or any other government, everyone looks for development. TDP Chief Chandrababu Naidu is with NDA and he has always been pro-development," Madhusudan Kela, managing director at MKVentures Capital Ltd., said at the NDTV Profit Invest 2029 event.

Neelkanth Mishra, chief economist at Axis Bank Ltd. and head of global research at Axis Capital, concurred. Looking at the increasing development in India, he said that the real estate sector is poised to witness a boost.

With the growth in housing, the cost of construction per square feet will also see a jump, he said. In addition, Mishra highlighted that as the sector grows, the quality of construction will also have to improve. There is a need to improve the urban infrastructure, according to him.

In terms of the IT sector, Mishra said that the valuations are very high and the companies are still not done with the job cuts. Another problem that the Indian IT companies are facing, according to him, is poaching. "Indian IT companies are seeing more competition from GCCs (global capability centers). They are poaching people. These are not easy-to-handle issues."

Kela, while talking about the PSU sector, said that the valuations are unsustainable in some areas. According to him, he is more "comfortable in buying PSU banks". However, retail investors are buying random PSU stocks, which will work against them, he said.

While Kela said that "India has a very strong balance sheet", he also pointed out that unemployment is an issue. However, he is not sure when it will start impacting the stock market, he said.

With rising temperatures in India, the power sector has also seen a major uptake. "We have been underinvested in energy for a while" and that needs to change, said Mishra.