Why Deepak Shenoy is betting on industrials, defence, and oil and what he’s avoiding

The narrative around markets has been gloomy. Geopolitical tensions, tariff uncertainty, and slowing global growth have kept investors cautious. But Deepak Shenoy, Founder and CEO of Capitalmind MF, thinks the ground reality is considerably better than the headlines suggest — and he has the data to back it up.

Earnings are holding up better than feared

Speaking to ET Now, Shenoy noted that corporate results coming in have been “meaningfully interesting,” with the actual impact of recent global disruptions proving far less severe than widely expected. “The worst may be ahead of us,” he acknowledged, “but it does not seem like it is as bad as it sounds.”
Market prices have reflected this shift in sentiment. April was an encouraging month for Indian equities, and Shenoy sees that price action as a signal worth paying attention to — particularly in sectors where fundamental tailwinds are building.

The credit data tells a bullish story

One of the most compelling data points Shenoy cited was the latest bank credit numbers. MSME credit grew 34% year-on-year. Large industry credit — a segment that had essentially stopped borrowing — clocked growth of 10.5%, the highest since 2013.
“To the extent that corporates are borrowing again… industrial credit, especially capex, is kind of encouraging,” Shenoy said. Credit growth, he explained, typically acts as a precursor to capital expenditure, making this a forward-looking positive signal for the broader economy.

Where Shenoy is putting money to work

On sector allocation, Shenoy is unambiguous. His preference is industrials, import substitution, and manufacturing — with defence and semiconductors as high-conviction bets within that theme. Both sectors, he argues, have revenue upside that the current market narrative is underpricing.
“There is cause for that to be a primary kind of allocation,” he said of defence and semiconductor names, pointing to strong demand visibility and the potential for significant revenue jumps.Financials, by contrast, remain a lower priority for now. While NBFC credit demand is showing signs of life, Shenoy considers the sector “still weak” relative to the opportunities available elsewhere.

His more contrarian call is on oil exploration. Once the current geopolitical uncertainty eases, he expects domestic oil and gas exploration — particularly in basins with prior discoveries — to attract significant long-term interest.

Don’t make a long-term bet on high oil prices

On crude oil itself, Shenoy’s medium-term view is decisively bearish. He expects prices to fall below $80 per barrel within a year, driven by rising supply from the US, potential re-entry of Russian oil into global markets, UAE’s push to increase output outside OPEC constraints, and new domestic discoveries by India and China.

“Any bet on oil remaining at this level forever is probably a very bad idea,” he said flatly. Long-term electrification trends add further downward pressure, though he places that impact two to four years out.

On Tata Tech and the EV technology theme: Wait for orders first

Shenoy was cautious on the buzz around Tata Technologies and the broader EV technology outsourcing theme. While he acknowledged the opportunity is real, he cautioned that entry timelines in this space are long, competition is fierce, and major players like Tesla and Chinese automakers do not meaningfully outsource to India.

His advice: wait for actual order wins before treating the narrative as an investment thesis. “There is a better set of plays out there in plain old semiconductors or industrials,” he said, rather than making a specific bet on IT names riding the EV upgrade cycle.