Defence sector poised for long-term growth, says Kotak AMC’s Harsha Upadhyaya

Defence sector poised for long-term growth, says Kotak AMC’s Harsha Upadhyaya

The Indian defence sector is set for sustained long-term growth, with more companies expected to list and expand the investment universe, according to Harsha Upadhyaya, Chief Investment Officer of Kotak Mahindra Asset Management Company (AMC).

Speaking at the Moneycontrol Mutual Fund Summit, Upadhyaya said the outlook for defence spending remains strong globally as well as in India. “We are not seeing anyone cutting defence capital expenditure. It’s difficult to imagine a world without conflicts or geopolitical tensions. Even the fear of conflict compels nations to spend, so defence expenditure will continue to grow,” he noted.

He added that India’s journey toward self-reliance in defence manufacturing is gaining momentum. “Historically, India depended heavily on imports, but that is changing. The realisation that we must be self-reliant, especially after past conflicts, has strengthened the push for indigenisation,” he said.

Upadhyaya expects more firms in the defence and aerospace ecosystem to go public, enlarging the investable space for domestic investors. However, he cautioned that investors need to be selective and valuation-conscious.

“Defence stocks may appear expensive in the short term — over the next six months to a year — but they could be reasonable buys when viewed from a five-year perspective. The era of easy money is over; investors must focus on stock selection and risk management,” he said.