Should you buy infra, defence, PSU themes amid lower FY25 GDP projections, flat FY26 capex? Nikhil Rungta of LIC MF recommends this

Even with a downward revision in FY25 GDP projections and low capex spending in the first half of the year, infra, defence, and PSU themes remain relevant investment opportunities, says Nikhil Rungta, Co-CIO Equity at LIC Mutual Fund Asset Management. PSUs, particularly in sectors like railways, power, and defense, may continue to see earnings visibility and improving efficiency, he opines. Excerpts:

Net equity inflows in January were strong despite negative sentiments though down on a MoM basis. Do you think there is an attitudinal shift in the way people are now approaching equity investments in a sense that they want to remain invested even if it is small, come what may?
Yes, there is a clear attitudinal shift in the way investors are approaching equity investments. Despite market volatility and occasional negative sentiment, investors are demonstrating resilience by continuing their investments, even if in smaller amounts. This is largely driven by the increasing financialisation of savings, with a growing preference for equities over traditional asset classes.

Additionally, the role of systematic investment plans (SIPs) has been instrumental in fostering a disciplined investment culture, ensuring steady inflows irrespective of short-term market fluctuations.
Another key factor is the maturing investor mindset, where market cycles are better understood, leading to fewer panic-driven redemptions. Mutual funds, in particular, have gained significant trust, supported by investor awareness initiatives that