$46 billion asset manager reallocates some funds from automotive and industrial to these sectors

Harsha Upadhyaya, who manages over $45 billion in funds as chief investment officer, Equity at Kotak Mutual Fund, recently shifted some funds from the auto and industrial sectors to information technology (IT) and banking.

He noted that as a defensive investment, banks have not performed well in recent quarters, but taking into account the results for the first quarter (April-June), there should be no major deterioration.

Although they have recently slightly increased their exposure to IT, reducing their underweight position in some stocks, their investments in this sector are still lower than average. While Upadhyaya doesn’t expect impressive quarterly results, he believes it makes sense to shift some funds from domestically focused sectors to more defensive investments such as IT.

Both banks and IT are considered good defensive picks, he told CNBC-TV18.

Upadhyaya predicts corporate profit growth of around 50% this year and next year (FY26).

Although there are no serious problems, share prices are still high. Therefore, it is important to choose stocks and sectors carefully to avoid an overly risky portfolio and minimize exposure to potential market volatility, he advises.

He stated that in the telecommunications area, tariff increases were as expected. While most of the near-term positives are already visible in prices and valuations, “The next important factor will be continuing to think about adjusted gross revenue (AGR) and any progress there.”

Although they have limited their activities in the automotive and car accessories sector, they still invest much more than average in this sector.

He believes that the short-term positives in the auto sector have already been factored in, and the upcoming monthly sales data could be weaker compared to the last few quarters. As a result, profits may not be as strong as they have been in the last few quarters.

“However, we are still overweight and the automotive sector may, as before, favor two-wheelers, which we believe can still make money,” Upadhyaya added.

You can watch the entire interview in the attached video

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