While power and industrial stocks enjoy robust order inflows, Mirae Asset Mutual Fund has chosen to stay underweight, citing that the expected growth is largely already priced in—at least, that’s what senior manager Ankit Jain told CNBC‑TV18.
Jain pointed out that since the September‑2024 peak, valuations have slumped by 30–35% across the board, with large‑cap names bearing the brunt of a sharper decline. The sector’s demand‑supply mismatch has kept margins steady, even as commodity cost pressures mount.
But the fund warned that the current ordering momentum could wane if global AI‑related investments and capital expenditures hit delays, as the industry’s long‑term growth hinges on these capital inputs. Jain said the market should watch how long the present inflows sustain before the next big spend cycle kicks in.
On the macro front, crude oil prices lingering above $110, rising inflation, and tightening interest rates paint a grim backdrop for the broader equity market, while the El Niño‑induced monsoon slump may keep inflationary pressures in check for the next quarter. “These headwinds have contributed to the recent market sell‑off,” Jain added, noting that liquidity is being absorbed by IPOs, further tightening the environment.
Looking ahead, investors could see a correction if the sector’s valuations realign with the underlying growth fundamentals. Mirae Asset’s stance suggests that a 30–35% derating might pave the way for a more attractive entry point, but only if the order book sustains and macro headwinds ease. The fund’s commentary hints that a careful reassessment of power and industrial exposure could be on the cards, especially if earnings growth expectations of 20%+ start to materialize.