360 ONE fund manager bets on Indian manufacturing and data centre buildout

360 ONE Flexicap Fund manager Mayur Patel is positioning for a multi-year Indian manufacturing expansion, betting the broader market will outpace the benchmark Nifty. The fund has returned 17.5% over three years, compared to 11.5% for the BSE 500 TRI.

Patel views manufacturing as the defining theme for India's next decade, replacing the consumption narrative of the past twenty years. He points to the renewables sector as evidence of this structural shift, noting that India has moved from importing most solar equipment five years ago to mandating domestic production of solar cells starting in June.

Rather than chasing direct artificial intelligence plays, Patel is targeting second-order beneficiaries. He estimates roughly 14 GW of data centre capacity will come online over the next five to seven years, supported by upwards of ₹10 lakh crore in investment. This capital deployment is expected to drive sustained demand for power transmission and distribution equipment, cables, diesel gensets and renewable energy infrastructure.

The portfolio reflects this thesis, with industrials as the fund's second-largest holding at 13.44%. Patel holds a large overweight in power T&D and renewable equipment manufacturers, alongside defence and electronics manufacturing. However, he cautioned that some stocks in the industrial space have become expensive and the fund will book profits where the risk-reward turns unattractive.

On broader market valuations, Patel noted the Nifty is trading at roughly 3x price-to-book. "At around 3x P/B currently, Nifty is trading close to its 20-year median, which makes for a reasonable entry point," he said. He highlighted that the Nifty 500 delivered comparatively better earnings growth than the Nifty in FY26. Falling crude prices, credit growth, consumption and capital expenditure are expected to drive a meaningful earnings rebound in the broader market during the second half of the year.