Stock-specific opportunities emerging in defence, renewables after recent market pullback: Narendra Solanki

Railway and defence stocks staged a rebound in Tuesday’s trade, sparking debate over whether the bounce was sustainable or merely a technical blip. Market experts noted that valuations in these pockets remain elevated, but recent corrections have opened selective opportunities.

Narendra Solanki, Head of Equity Research at Anand Rathi Shares & Stock Brokers, told ET Now that the long-term investment story in sectors such as defence, electronics manufacturing, renewable energy, and the emerging battery energy storage (BESS) space remains robust.

“Over the next 5–10 years, the growth runway for these sectors is very strong. Corrections only make stock-specific opportunities more attractive. Investors can use such phases to accumulate quality names,” Solanki said.

Banking Pack Shows Resilience

Meanwhile, the banking and financial space also drew investor interest. The Nifty Bank index held steady, while PSU banks saw a 1% uptick with Union Bank, Indian Bank and IOB among the notable gainers.

According to Solanki, the sector’s strength will be driven largely by retail-focused franchises. “In the second half of the financial year, the two key themes are rural growth and consumption revival. Rural demand is already strong and urban consumption is also improving gradually. Retail-oriented banks and NBFCs are well placed to capture this trend,” he explained.

Within the banking basket, Solanki expressed a preference for PSU lenders over private peers, citing attractive valuations and improving balance sheets. In the non-banking space, he highlighted names such as Bajaj Finance and Cholamandalam as well-positioned plays on the retail credit cycle.

The Road Ahead

With global uncertainties still weighing on sentiment, investors appear to be shifting focus back to domestic growth drivers. Sectors aligned with government spending—such as defence and railways—alongside rural demand and consumption-led financial plays, are emerging as favored bets for the months ahead.