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Below the Quote on Defence Stocks by Dr. Vikas Gupta, CEO & Chief Investment Strategist at OmniScience Capital 

“In 2024, the total India-US trade was $129 billion including $87 billion exports from India and remaining imports from US. At around 3% of India’s GDP it is relatively small. Since, tariffs could impact the near term revenues and earnings, investors can prefer to stay away from companies with large exports to the US especially if the current market prices of the companies incorporate large growth to justify the current prices. In the Indian markets, there are a large number of companies which have practically no exposure to the US economic markets. One can focus on those companies with focus on thosw which have medium to high domestic growth driven by domestic growth vectors and where Mr. Market might not yet have discounted it in the prices. These below the radar companies is where an investor can focus his portfolio. For example, banks, power, epc/ infra, domestic business services, etc.  are some of the growth vectors we hold in our portfolio or are overweight. Of course, this is not a recommendation, rather these are examples that one can find a vast array of opportunities if one follows a scientific investing framework.The scientific investing framework encourages a focus on companies with strong balance sheets, persistent competitive advantages, exposure to long-term growth vectors and which are priced at a discount to their conservatively determined intrinsic values. For the current post-tariff situation we would ideally focus on companies with low or no exposure to the US markets. In our opinion, a deal will be reached eventually and the tariffs should be lower at that point of time. So one cannot take a necessarily negative long-term view about US exporting companies until we see the final deal.”

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