‘Bullish’ on defence sector; foreign investors may return in H2 2025:

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, expects retail participation to grow further in the upcoming calendar year 2025. “Regulators have been taking adequate measures proactively to safeguard the interest of retail investors from time to time. We still remain confident of greater participation from retail investors in times to come due to digitalisation and diversification of financial assets,” the market expert

Sector-wise, he stays ‘bullish’ on the defence pack but only with a long-term perspective. “We remain bullish on the defence sector, given order book size and earnings visibility. Defence stocks are also under consolidation in 2024 after their strong run-up,” Bathini said.

Select defence counters such as Cochin shipyard, Garden Reach Shipbuilders, Mazagon Dock Shipbuilders, Hindustan Aeronautics Ltd (HAL) and Bharat Electronics Ltd (BEL) can be considered with a long-term view, he added.

The market specialist remains optimistic about the railway pack. “The railway theme is still quite strong. There is clear visibility of earnings and order book growth. These stocks are in a consolidation zone after the strong run-up in the last two years,” he said. Bathini mentioned that wagons and rail infra-focussed stocks are likely to benefit more.

The expert sees foreign investors returning to the Indian market in the second half of 2025 (H2 2025). “Net FPI (foreign portfolio investment) inflows in 2024 were uninspiring. After the unprecedented sell-off by foreign investors in 2024, we expect a significant comeback of FPIs in the second half of 2025,” the expert said.

For the upcoming year, Bathini selected HDFC Bank Ltd, Reliance Industries Ltd (RIL) and Larsen & Toubro (L&T) shares as his top three picks from Nifty50 due to their strong domestic growth opportunities.

He believes that a blended portfolio is the key to success in the stock market. “A portfolio blend is always essential. One needs to have an individual strategy based on their risk appetite and time horizon. Changing strategy along with the market texture and conditions is also sometimes essential for the short term. The market is very dynamic and any short-term volatility can offer an opportunity for the long term,” Bathini suggested.

When asked to share foreseen events which can influence market performance in 2025, he said, “US Federal Reserve’s policy decisions and RBI’s monetary policy events are the crux for the domestic market in 2025. The new Trump administration in the United States (US) from January 22, 2025, and India’s Union budget presentation on February 1, 2025, will be key events in the near term.”

On the economic front, he finds managing inflation and balancing growth a challenging task for the Reserve Bank in the near term. “Rate cuts are essential now to maintain the pace of growth. When that happens, banking, financial services, construction, automobile and infrastructure sectors can gain the most,” Bathini added.

Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.

SEBI registered research analyst

Stock market

Accurate intraday tips

Call or whatsapp: +91 9924987385 / +91 7096190322

www.moneywealth.co.in