Consumption in spotlight, metals steady, defence looks stretched: Old Bridge CIO

Kenneth Andrade, Chief Investment Officer of Old Bridge Mutual Fund, which manages assets worth nearly ₹1,600 crore, believes the upcoming festive season could mark a significant boost for consumer-centric sectors.

With policy and monetary measures aligning to support demand, he sees both consumer durables and automobiles emerging as strong beneficiaries.

“The focus has moved to the domestic environment… we necessarily have to refocus our entire energies and to see how we can kick start the domestic economy,” Andrade said, adding that the timing of the stimulus measures coincides well with the festive season, which should drive higher volumes.

He expects discretionary categories, particularly autos and large appliances, to see stronger profitability as operating leverage plays out. “Those kind of companies should see a relatively higher increase in margins, or should I say, profitability, going into this season,” Andrade noted.

Beyond consumption, Andrade highlighted that metals remain well-positioned. He observed that fundamentals and cash flows of Indian metal companies are stable, leaving little downside risk.

Old Bridge Mutual Fund maintains exposure of around 8% to both ferrous and non-ferrous players, viewing the sector as structurally sound with capacity expansion largely funded through internal accruals.

On the defence sector, Andrade described it as a long-term theme underpinned by the capex cycle already underway. However, he cautioned that valuations are tight, leaving limited scope for further re-rating.

Future gains, he said, would depend more on earnings delivery and government-led procurement than on valuation multiples expanding.

Overall, Andrade stressed that investors’ attention is likely to remain firmly on the domestic economy in the near term, with the festive season offering a strong test of resilience across consumption-driven sectors.

For full interview, watch accompanying video

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