Keep an eye on Defence sector with 3-4 year view: Arvind Sanger, Geosphere Capital Management

In a chat with ET Now, Arvind Sanger, Managing Partner, Geosphere Capital Management, shares his views on defence sector. Excerpts:

ET Now: Defence seems to be the flavour of the fortnight right now. What is the sense that you are getting about where the prospects of this sector and of course the stock prices may be?

Arvind Sanger: Clearly, it is an area where the government is focussed on. There are many good ways to play it. There are companies that have gut ventures going on, whether it is an L&T or Bharat Forge or maybe other smaller companies like Bharat Electronics or all but there are very niche plays on the defence sector but it is going to be a long road. It is not going to be that just because you have announced it today, there is going to be big opportunities because what they are talking about is companies signing up with foreign partners for significant domestic defence capacity we built up.

So, defence is something to keep an eye on with a three-four-year view, there are going to be potentially some big beneficiaries of it but I would not look for any big earnings prop. I would look for capex announcements which could have benefits three to four years from now and hopefully, the benefits will accrue to some of the companies that are otherwise capital disciplined so that we can see whatever they do, they do in a fashion that will create value for shareholders.