Commodities cycle has bottomed out, decadal opportunity in energy, power: Sandeep Tandon

The commodities cycle has bottomed out — be it precious metals, base metals, or agri commodities — and now offers a decadal investment opportunity in energy and power sectors, said Sandeep Tandon, Founder & CEO, Quant Mutual Fund.

The leverage economy is 10-12 times the global GDP, and has peaked out. As deleveraging happens and the money flows into the real economy, commodities will be the first beneficiaries, Tandon said in an interaction with Moneycontrol.

Tandon listed commodities, metals, pharma, cement and infra as pockets that offer value. He also likes energy and metal-centric value companies. The Nifty metal index is up 20 percent in the past six months, while Nifty Energy has gained 40 percent during the period, bouncing back from the lows touched in late 2022 and early 2023.

Also Read | Not a momentum player but an opportunistic investor, says Quant MF’s Sandeep Tandon

One of the reasons for optimism on metals is the infrastructure growth. While there has been a lot of hype around the capital goods sector in recent times, Tandon said the attention will now shift to construction, logistics, equipment providers or anything part of the larger infrastructure theme.

“That’s a thesis which I’m extremely bullish on, and if infra grows then metals will also do well. Without metals, you can’t build the infrastructure,” he added.

India’s infrastructure sector is poised to emerge as a primary driver for the country’s economic growth, with a targeted investment of Rs 143 trillion earmarked for 2024-2030. The focus of this infra spending will be on sectors such as roads, power, electric vehicles, solar, wind and hydrogen.

Tandon also sees good value in pharma stocks. However, since largecap pharma stocks have already surged 23-152 percent over the past year, he expects money to now flow in mid- and smallcap pharma companies.

His fund house also has tactical exposure in the media sector. “It’s a neglected sector and there is deep value in this area, but the segment is very small so we only have marginal exposure here,” Tandon added.

Also Read | More steam left in PSU stocks; will see healthy correction, says Sandeep Tandon of Quant MF

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.