PSUs in Defense and Drones: State-Led Growth

What’s the core bet for the next decade?

Damani’s message is simple: think long, not short. He wants long-horizon equity bets that ride India’s evolving economic map, not quick trades that chase the noise of a single quarter. The central idea is state-directed capital expenditure—the government steering money into strategic sectors to build enduring value. The three verticals he flags for a 5-10 year portfolio are big because they align with policy and trade flows: rare earths and strategic minerals, shipbuilding and maritime infrastructure, and urban reconstruction and construction. And yes, he still leans on PSUs in sensitive domains like aerospace, defense systems, drones, and strategic manufacturing—areas where the state’s appetite for investment creates a predictable runway.

Beyond infrastructure, he doubles down on healthcare innovation. The logic? In a country hungry for self-reliance, pharmaceutical leaders that own real ideas and processes can compound value well beyond episodic commodity cycles. And across the board, his core mantra remains: invest with patience, pick cheap but quality, and hold for a long horizon—10-20 years if you want compounding to do the heavy lifting.

Imagine the market as a garden and policy as the irrigation system. Great companies aren’t built in a season; they’re tended for decades. The “state-sponsored capitalism” trend Damani touts isn’t about government controlling every move; it’s about creating sturdy rails for growth in sectors India must own. The result, in practice, is a shift away from chasing glittering hotspots to identifying durable franchises with government backing, steady demand, and lean, scalable execution.

What should an Indian investor do with this knowledge?

Lean into long-horizon, “cheap quality” bets in the sectors Damani highlights. For the rare-earths and minerals play, look for dominant players with solid mineral access and policy alignment. For shipbuilding and maritime infra, keep an eye on companies with visible order books, scalable capacity, and smart partnerships. In urban reconstruction, prefer firms that combine execution discipline with strong governance. In pharma, tilt toward firms focused on IP and novel drug research, not just API suppliers.

Hold firm. Think decades, not quarters. The decade ahead isn’t about timing the market; it’s about aligning your portfolio to India’s state-led growth arc and letting compounding do the rest. The message is clear: patient, active stock-picking in these core areas can redefine what “wealth” looks like for Indian investors.