Infrastructure, hospitality, energy and pharma — that’s where the next market leaders may emerge, says Quant Mutual Fund’s Sandeep Tandon, urging investors to move beyond well-worn favourites and look at sectors making a comeback.
Consumption stays key, but the real gains, he believes, will come from neglected parts of the market that are beginning to show promise.
Infrastructure is poised to benefit from both domestic policy focus and global geopolitical shifts, he said. “We are talking about global thermal battlegrounds, water-related tensions, and geopolitical noise that is on the higher side,” Tandon said, adding that in this environment, “large infra names will do very well”.
Hospitality is another space he likes, buoyed by strong domestic travel trends and rising incomes.
He also sees potential in energy transition plays and Indian pharmaceutical exporters. “We remain very constructive,” he said on energy.
On pharmaceuticals, he noted, “US has no option but to buy generally from India.” For context, in financial year 2024 alone, the US imported $8.7 billion worth of drugs from India, which supplies around 40% of all generic medicines used in the American market, according to the Pharmaceuticals Export Promotion Council of India.
Within financial services, Tandon prefers insurers and non-banking financial companies to banks. “We think even from the current levels…NBFCs and insurance will outperform banks going forward.”
Consumption remains a strong theme structurally he said, though he’s more inclined to look at neglected stocks rather than over-owned favourites.
Sandeep Tandon, Founder and CIO, Quant Capital
Pick Stocks Not Sectors
While he listed several promising sectors, Tandon emphasised that investors should avoid painting with a broad brush. “2025 is about stocks, not about sectors,” he said. “In the same sector, a few stocks will do very well and a few stocks will not.”
This bottom-up approach also extends to valuation discipline. Tandon cautioned against chasing popular names trading at high valuations without earnings clarity. “We must together avoid all those stocks which are in the admired territory,” he said, describing them as “fashionable names…whether they have a cash flow or not, but these are in fashion today.”
Instead, he prefers companies with improving fundamentals that have been overlooked by the market. “Something is changing. The numbers are improving. We like to participate in these things,” he said.
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