Badshah said the fund remains constructive on EVs, healthcare, banks and select industrial businesses, although he cautioned that investors need to be selective as valuations have risen in several parts of the market. He also expects earnings momentum to remain strong in parts of the power sector, while opportunities are emerging in power distribution alongside transmission.
Badshah said the move regarding Delhi’s new EV policy aligns with the broader direction of India’s automobile industry.
“EVs and adoption of EVs is going to only rise across different segments of the market.”
He said Delhi has historically led policy implementation in the sector, although execution will be gradual and depend on charging infrastructure and effective implementation.
While hybrid vehicles have been left out of the policy, Badshah said companies focused on conventional and hybrid technologies can continue to grow by strengthening their niche offerings. However, he acknowledged that the near-term sentiment is probably negative for some of these companies.
Badshah said Invesco currently prefers original equipment manufacturers (OEMs) for investment opportunities within the EV ecosystem, particularly in the two-wheeler and four-wheeler segments, over ancillary companies serving the domestic market.
Beyond automobiles, Badshah said consumer-related sectors have seen an improvement as oil prices have eased and demand trends have remained resilient.
“I think on both these counts, things are turning out to be somewhat better than what the market expectations were,” he said, referring to lower crude oil prices and stronger-than-expected demand.
Badshah said transmission companies continue to benefit from healthy order books and earnings visibility, although valuations have become richer. He said the fund is gradually evaluating opportunities in power distribution, where earnings growth could accelerate over the coming years.
“We see a lot of investments, at least as far as transmission is concerned,” he said, adding that opportunities are beginning to emerge in the distribution segment of the power ecosystem.
Badshah said industry trends remain stable in mutual fund flows despite a marginal slowdown in the previous month due to geopolitical concerns and uncertainty around the monsoon. He said systematic investment plan (SIP) inflows have remained resilient and there is nothing which is very alarming at this stage.
Badshah identified healthcare as one of the fund’s preferred sectors after the recent correction.
“That is a place where we can probably now put incremental money to work.”
He also remains constructive on financial services, particularly banks, while continuing to favour capital market-linked businesses from a long-term perspective. According to Badshah, investors should adopt a bottom-up approach in industrials, focusing on companies capable of delivering earnings above market expectations rather than chasing the broader sector.
For the full interview, watch the accompanying video
Catch all the latest updates from the stock market here