Dipan Mehta Recommends Pharma and Specialty Chemicals; Advises Selective IT Exposure Amid AI Debate

Dipan Mehta Recommends Pharma and Specialty Chemicals; Advises Selective IT Exposure Amid AI Debate​

Dipan Mehta, Director at Elixir Equities, has advised investors to focus on sectors with clearer earnings visibility such as pharmaceuticals and specialty chemicals, while maintaining a selective stance toward information technology and new-age technology companies as market dynamics evolve.

Pharma and Specialty Chemicals Offer Clearer Visibility​

Mehta identified pharmaceuticals as an attractive sector over a two to three year investment horizon. He cited stable domestic demand, export expansion, and currency benefits as key supportive factors. He added that tariff risks for pharma companies appear limited and that opportunities in new therapy segments could help drive growth.

Specialty chemicals have also emerged as a preferred space. According to Mehta, the sector is recovering after a cyclical slowdown and has reported improved earnings across companies. Rupee depreciation and global supply diversification trends continue to support the industry outlook.

In addition, he remains positive on auto ancillaries and non-banking financial companies.

Auto Sector Supported by Exports​

The auto sector, Mehta said, is benefiting from exports and steady demand. Competition from new entrants remains limited as overall demand continues to expand. He noted that Indian companies are increasingly exploring overseas markets to drive growth.

Companies such as Maruti Suzuki are focusing more on exports, and other players may also expand internationally over time.

IT in a Wait and Watch Phase​

On information technology stocks, Mehta said the sector has entered a wait and watch phase amid the artificial intelligence debate. He observed that uncertainty around AI has created diverging market views, but the sharp correction in IT shares has already priced in several concerns.

“The time to sell IT is gone because they’ve corrected so much,” he said.

Mehta emphasized that AI’s impact will vary across companies. Some may benefit from implementation opportunities, while others could face pressure. He advised investors to track company-specific developments rather than adopting a broad sector approach.

EV Challenges and Selective Bets​

Commenting on Ola Electric, Mehta said the broader electric vehicle segment is facing subsidy-related issues and demand concerns. He described the stock as a hold for existing investors, calling it an optional bet dependent on operational execution and market share improvement.

On artificial intelligence infrastructure, he named E2E Networks and Netweb Technologies as key domestic players offering exposure. However, he cautioned that strong revenue growth is accompanied by high depreciation costs, making valuations complex. Referring to E2E Networks, he said it is well positioned but expensive, with execution risks and potential competition to monitor.

Exiting Info Edge, Limited Exposure to New-Age Platforms​

Despite long-term exposure, Mehta suggested investors may consider exiting Info Edge due to slowing growth in its recruitment business and continued losses in some verticals. He noted that holdings in investee companies are already reflected in valuations.

On new-age digital companies such as Urban Company and Meesho, he recommended limited allocation within portfolios. He advised treating such investments as options, given uncertain profitability timelines despite long-term growth potential.