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HomeMarket NewsM&G’s Vikas Pershad bullish on defence and auto parts, cautious on IT
Vikas Pershad, Portfolio Manager – Asian Equities at M&G Investments, remains confident that an India–US trade deal will eventually be sealed, saying it is in the best interest of both sides and will serve as a key long-term catalyst for the market.
Vikas Pershad, Portfolio Manager – Asian Equities at M&G Investments, picks defence and autos as his top investment themes for 2026. “We became overweight in this sector in 2022, not long after the Russia-Ukraine conflict kicked off,” he said, referring to defence. The firm has since increased its exposure, seeing sustained government spending and strong order books.
Within autos, Pershad stated that M&G has shifted some allocation from original equipment manufacturers (OEMs) to auto parts makers, where innovation and export potential are driving growth.
On the other hand, Pershad remains cautious on IT services and consumer staples, calling IT “one of our largest underweights” due to weak earnings visibility and limited artificial intelligence (AI) upside. Foreign investor sentiment, however, appears to be turning a corner. With ownership levels at record lows, he believes this could mark “a great setup heading into the new year” as investors look to rebalance emerging market portfolios.
Pershad also stated that while India has underperformed peers like China and Korea this year, the long-term story remains intact. The country continues to lead in IPO activity, accounting for one in three global listings, and offers “a very broad and deep universe for active managers.”
He expects India and China to lead emerging market convergence, benefiting from global capital rotation away from overheated US tech and AI trades. The current AI bubble in the US and North Asia, he said, could redirect some flows to India, where AI-linked CapEx is only beginning to rise. Pershad remains confident that an India–US trade deal will eventually be sealed, calling it “in the best interest of both sides” and a key long-term catalyst for the market.
Also Read: Exports, innovation & GST cuts fuel optimism in auto component sector, say industry leaders
For the entire interview, watch the accompanying video
