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Tue, 15 Sept 2026
12:15:14 pm
Tue, 15 Sept 2026
12:15:14 pm
Rudransh Sangwan
Published at: August 25, 2026, 6:58 AM
Synopsis
Aniruddha Sarkar shares his top stock picks and investment strategy, with a focus on midcap, smallcap, defence, auto, power and textile stocks for long-term growth.
Aniruddha Sarkar, Co-founder and CIO of Equinova Investment Managers, shared his investment strategy and outlook for the Indian stock market following the Q1 FY27 earnings season. He believes investors should focus more closely on company earnings rather than market capitalisation and remains bullish on midcap and small-cap stocks, where he sees stronger earnings growth opportunities compared with large-cap companies.
Sarkar's portfolio has significant exposure to sectors including auto and auto ancillaries, power, textiles, private defence and aerospace. He highlighted private defence manufacturers supplying critical components to large PSUs as an attractive area, with Astra Microwave Products standing out because of its entry barriers and earnings visibility.
| Investment Focus | Key Areas |
|---|---|
| Market segments | Midcap and small-cap |
| Core sectors | Auto and auto ancillary, power, textiles, private defence and aerospace |
| Portfolio exposure | Around 50-60% |
| Defence focus | Astra Micro |
Sarkar emphasises earnings growth as a key factor in stock selection rather than simply focusing on whether a company falls into the large-cap, midcap or small-cap category. He believes the strongest growth opportunities are currently emerging from the midcap and small-cap segments of the Indian stock market.
His portfolio allocation is heavily concentrated in sectors such as auto and auto ancillary, power, textiles, private defence and aerospace. Together, these sectors account for around 50-60% of his portfolio, reflecting his preference for businesses where structural growth and improving earnings can support long-term returns.
| Portfolio Allocation | Exposure |
|---|---|
| Auto and auto ancillary | 20% |
| Core sectors | 50-60% |
| Midcap and small-cap | Bullish |
Sarkar is particularly optimistic about private defence manufacturers that supply specialised components and systems to large public-sector defence companies. He believes these businesses can benefit from increasing defence spending, rising domestic manufacturing and high entry barriers in specialised areas.
Astra Micro is one of the stocks he highlighted as a key addition to his portfolio. The company stands out in his strategy because of its high entry barriers and strong earnings visibility, which he believes can support its long-term growth prospects.
| Defence Focus | Key Factors |
|---|---|
| Private defence | Increasing defence spending |
| Manufacturing | Rising domestic manufacturing |
| Astra Micro | High entry barriers and strong earnings visibility |
Sarkar remains underweight on the banking sector overall but prefers PSU banks over private-sector banks. His preference is based on what he sees as valuation mismatches and comparatively stronger operational parameters among selected public-sector lenders.
Rather than taking direct exposure to individual banking stocks, he gains exposure to the segment through a PSU Bank ETF. This approach allows him to participate in the PSU banking theme while maintaining portfolio efficiency.
| Banking Strategy | Preference |
|---|---|
| Banking sector | Underweight |
| PSU banks | Preferred |
| Exposure | PSU Bank ETF |
| Preference basis | Valuation mismatches and operational parameters |
Auto and auto ancillary companies account for around 20% of Sarkar's portfolio, making the sector one of his major investment themes. He sees opportunities across commercial vehicles, electric vehicles and specialised auto-component businesses.
Among his holdings, SML Mahindra is positioned as a growth opportunity in the truck and bus segment, while Ather Energy is favoured for its research and development capabilities and patent-backed battery technology. TVS Holdings and Sansera Engineering are also part of his auto strategy.
| Auto Strategy | Key Holdings |
|---|---|
| Commercial vehicles | SML Mahindra |
| Electric vehicles | Ather Energy |
| Auto | TVS Holdings |
| Auto components | Sansera Engineering |
| Portfolio allocation | 20% |
Sarkar has a positive view on Arvind Limited, particularly because of the company's advanced technical textiles business. He believes technical textiles offer stronger growth potential and higher margins compared with conventional textile operations.
The focus on advanced technical textiles reflects his broader investment approach of looking for businesses where specialised capabilities can create higher entry barriers and improve earnings quality over time.
| Textile Focus | Key Factors |
|---|---|
| Company | Arvind Limited |
| Business | Advanced technical textiles |
| Opportunity | Strong growth potential |
| Benefit | Higher margins |
Hitachi Energy is highlighted as one of Sarkar's top-performing investments, with the stock having approximately doubled in value over the previous six months. The power sector remains an important part of his broader investment strategy.
The company's performance also reflects the growing investor interest in power infrastructure and businesses positioned to benefit from India's increasing electricity demand, grid expansion and industrial investment.
| Power Focus | Key Factors |
|---|---|
| Stock | Hitachi Energy |
| Performance | Approximately doubled |
| Sector | Power |
| Growth factors | Electricity demand, grid expansion and industrial investment |
Sarkar's investment strategy focuses on midcap and small-cap companies with strong earnings visibility and structural growth opportunities. His preferred areas include private defence, aerospace, auto and auto ancillaries, power and technical textiles.
Stocks and companies highlighted in his strategy include Astra Micro, SML Mahindra, Ather Energy, TVS Holdings, Sansera Engineering, Arvind Limited and Hitachi Energy. His portfolio positioning suggests a preference for specialised businesses that can benefit from long-term domestic investment and rising demand across emerging industries.
| Stocks | Sectors |
|---|---|
| Astra Micro | Private defence |
| SML Mahindra | Auto |
| Ather Energy | Electric vehicles |
| TVS Holdings | Auto |
| Sansera Engineering | Auto components |
| Arvind Limited | Technical textiles |
| Hitachi Energy | Power |
Following the Q1 FY27 earnings season, Sarkar's approach remains focused on identifying companies where earnings growth can justify future valuations. His bullish stance on midcaps and smallcaps indicates that he sees opportunities beyond India's largest listed companies.
However, investors should evaluate individual companies based on their valuations, earnings visibility, balance sheets and execution capabilities rather than simply following stock recommendations. The sectors highlighted by Sarkar could remain important themes as India's investment cycle develops, particularly across defence, power, automobiles, manufacturing and specialised industrial businesses.
| Investment Outlook | Key Factors |
|---|---|
| Stock selection | Earnings growth |
| Market focus | Midcaps and smallcaps |
| Key sectors | Defence, power, automobiles, manufacturing |
| Evaluation factors | Valuations, earnings visibility, balance sheets and execution capabilities |
Aniruddha Sarkar is the Co-Founder and CIO of Equinova Investment Managers. He focuses on fundamental stock selection, sector allocation and long-term wealth creation, with an investment approach that can move across large-cap, midcap and small-cap companies.
Stocks highlighted in Sarkar's investment strategy include Astra Micro, SML Mahindra, Ather Energy, TVS Holdings, Sansera Engineering, Arvind Limited and Hitachi Energy. His broader focus is on businesses with strong earnings visibility and structural growth opportunities.
Sarkar's approach does not revolve around simply identifying one "best stock to buy." His strategy focuses on selecting companies where earnings growth, sector tailwinds, valuations and business quality support the investment case. His highlighted areas include auto, auto ancillaries, defence, power, EVs and technical textiles.
Sarkar has maintained a positive view on selected midcap companies, particularly where earnings growth and sectoral tailwinds are visible. Investors looking at midcaps should evaluate individual companies based on valuations, balance sheets, earnings growth and execution rather than market capitalisation alone.
Sarkar has previously said that selected small-cap and midcap stocks could offer opportunities over a multi-year period. However, smallcaps can carry significantly higher volatility, so investors should focus on business quality, earnings visibility, debt levels and valuations before investing.
Defence is one of the sectors Sarkar views positively, particularly private companies supplying specialised products and components to larger defence organisations. He has highlighted Astra Micro as an important stock because of its entry barriers and earnings visibility.
Astra Micro has been highlighted by Sarkar as a defence stock with high entry barriers and strong earnings visibility. Whether it is suitable for an individual investor depends on its valuation, earnings outlook, financial performance and risk tolerance at the time of investment.
Private defence companies with specialised technology, high entry barriers, strong order visibility and improving earnings can attract investors looking for long-term growth. However, no stock can be guaranteed to become a multibagger, and valuations and execution remain critical.
Sarkar has a significant allocation to auto and auto ancillary companies. His highlighted names include SML Mahindra, Ather Energy, TVS Holdings and Sansera Engineering, reflecting his preference for commercial vehicles, EVs and specialised auto-component businesses.
Ather Energy is one of the EV-related companies highlighted in Sarkar's strategy. He has pointed to its R&D focus and patent-backed battery technology as important factors. Investors should also assess EV competition, profitability, valuation and future growth before making an investment decision.
Auto ancillaries are an important theme in Sarkar's portfolio. Sansera Engineering is among the companies highlighted in his strategy, while the broader investment thesis is focused on businesses that can benefit from vehicle production, technology adoption and increasing component demand.
Sarkar prefers PSU banks over private banks within the banking sector because of what he sees as valuation mismatches and stronger operational parameters among selected lenders. His exposure through a PSU Bank ETF also reflects a preference for gaining diversified exposure rather than relying entirely on individual stocks.
Power and power infrastructure are important themes in Sarkar's investment strategy. Hitachi Energy has been highlighted as a top-performing stock, while the broader thesis is linked to rising electricity demand, grid expansion, industrial investment and India's power infrastructure requirements.
Hitachi Energy has been highlighted by Sarkar as one of his top-performing investments. The company's exposure to power infrastructure gives it potential exposure to India's expanding electricity and grid investment cycle, although investors should evaluate valuation and future earnings before investing.
Sarkar is bullish on Arvind Limited, particularly because of its advanced technical textiles business. His thesis is based on the potential for specialised technical textiles to generate stronger growth and higher margins than conventional textile operations.
There is no single list of universally best long-term stocks. Sarkar's strategy suggests looking for companies with structural growth opportunities, strong earnings visibility, sustainable competitive advantages and reasonable valuations across sectors such as defence, auto, power and specialised manufacturing.
Sarkar's investment approach places significant emphasis on earnings growth. His preferred themes include auto and auto ancillaries, private defence, power, EVs, aerospace and technical textiles, where he sees potential for an earnings upcycle.
Growth-stock investors are increasingly looking at sectors benefiting from India's capital expenditure cycle, defence spending, electrification, manufacturing and infrastructure investment. Sarkar's current strategy particularly highlights midcap and smallcap opportunities within these themes.
Stocks highlighted in Sarkar's strategy that investors may research further include Astra Micro, SML Mahindra, Ather Energy, TVS Holdings, Sansera Engineering, Arvind Limited and Hitachi Energy. A watchlist should be based on further analysis of valuations, earnings and business performance rather than simply following an expert's portfolio.
Sarkar's current investment themes include auto and auto ancillaries, power, defence, aerospace, EVs and technical textiles. His broader investment philosophy is to identify sectors entering an earnings upcycle rather than simply buying companies because they belong to a popular sector.
Not necessarily. Sarkar is bullish on selected midcap and smallcap opportunities because of their potential earnings growth, but these segments can also carry greater volatility and valuation risk. The quality of the individual business remains more important than its market-cap category.
Sarkar's strategy centres on identifying sectors with strong earnings momentum and then selecting companies with high conviction within those sectors. His views have highlighted industrials, capex, auto, auto ancillaries, defence, power, EVs and selected textile companies.
Stocks with strong structural growth, high entry barriers, expanding addressable markets and accelerating earnings can potentially deliver substantial long-term returns. However, identifying a future multibagger is inherently uncertain, and investors should not treat any stock as a guaranteed high-return investment.
Current expert strategies are increasingly focused on earnings growth, domestic capex, defence, power infrastructure, manufacturing and selected midcap and smallcap companies. Sarkar's portfolio themes reflect a similar focus on structural growth rather than short-term market movements.
No. Expert stock picks can help identify companies or sectors for further research, but investors should independently assess valuation, financial statements, debt, cash flow, earnings visibility, competitive position and risk before investing.
Financial journalist specializing in market analysis, stock research, and investment trends. Dedicated to providing accurate, timely insights for informed decision-making.
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