LIC Mutual Fund on oil prices, SIP trends and tech opportunities

Amid geopolitical tensions and shifts in the global technology landscape, investors are navigating a complex market environment. In this conversation with Hindustan Times, Yogesh Patil, Chief Investment Officer – Equity at LIC Mutual Fund Asset Management Ltd., shares his views on the macro impact of rising crude oil prices, the role of domestic institutional flows in market stability, and the long-term opportunities emerging within India’s technology ecosystem.

Markets have been volatile in recent weeks following the escalation of the conflict between the United States and Iran. How do you assess the potential impact of rising crude oil prices on India’s macro outlook and equity markets?

The recent US–Iran conflict has pushed Brent crude into the high‑$70s to around $80 a barrel. That is a risk for India. Higher oil prices can lift inflation and worsen the current account deficit (CAD). A 10% rise in crude typically adds about 20 bps to CPI. A $10 per barrel rise can widen CAD by roughly 0.3–0.4% of GDP.

India imports approximately 85% of its crude oil. If prices sustain above $80, the rupee could weaken, squeezing corporate margins in fuel‑sensitive sectors, and delaying monetary easing. However, strong reserves and services exports offer buffers. Overall, elevated crude is a macro headwind. The outlook could improve if supply routes normalise. Many agencies still expect oil markets to be balanced in 2026 unless disruptions last longer.

In phases like the current one, when markets are volatile but retail participation through SIPs remains strong, what approach should equity investors adopt to navigate uncertainty?

Mutual funds investors may continue their SIPs in diversified equity schemes. We have a more constructive view on equities today as compared to a year ago, given improved earnings growth visibility and relatively reasonable valuations. If cashflows permit, investors may consider supplementing their SIPs with lumpsum investments.

Domestic institutional flows, particularly through SIPs and mutual funds, have played a key role in supporting markets even during corrections. Do you see this trend continuing, and how significant are these flows in shaping market stability today?

Investments through mutual funds SIPs have continued in the consolidation phase we saw over the last 18 months. Investors have been using well diversified schemes to allocate money to equities in the recent past. This is a sign of maturity and an outcome of the sustained efforts on the investor education front. As more investors enter the equity markets with a long-term view using SIP, this may create a supportive environment. On the one hand investors participate in the long-term wealth creation and on the other, Indian corporates get a steady and reliable source of capital to fund future growth. This could contribute to a positive cycle in the Indian capital market, offering long term growth.

Technology as a sector has seen shifts globally with developments in AI, semiconductors, and digital platforms. From an Indian equity perspective, how do you view the long-term opportunity in the broader technology ecosystem?

Core technologies such as cloud, software, automation, and AI have become the productivity engines of enterprises. Cloud, AI, and software have moved from the back office to the frontline of growth and productivity.

You can see this in the global capex cycle. Hyperscalers have stepped up AI and cloud infrastructure spending through 2026, largely because enterprise demand is increasing. For India, this carries significant implications. As global cloud spending grows and deal backlogs hit record levels, the Indian IT and software ecosystems, from services integrators to product firms, become key partners for migration, data engineering, cybersecurity and AI enablement. Cloud, software, automation and AI are now the frontline productivity stack. As global spend rises, India offers the execution fabric—from migration and data engineering to cybersecurity and AI enablement.

LIC Mutual Fund recently launched the LIC MF Technology Fund. How do you see the opportunity evolving for Indian investors looking to participate in this broader technology value chain?

Technology today is not merely a tool; it is part of everyday life. It powers nearly every interaction such as how we learn, travel, communicate, transact, shop, work, and manage our well‑being. For businesses, technology has evolved from a support function into the core engine of competitiveness. Cloud computing, AI, data analytics, and digital infrastructure now drive value creation across industries.

These are not thematic overlays; they represent structural economic changes that are expected to influence long‑term value generation over the coming decade.

Lastly, which sectors do you believe could be the key drivers of equity returns over the next few years?

India’s investment momentum is strengthening thanks to a combination of lower borrowing costs, regulatory reforms, an investment upcycle, global supply‑chain diversification, and rising financialisation. We are positive on BFSI, auto ancillaries (especially on the export side), specialty chemicals, EMS, select defence companies, data centres and capital goods.

LIC MF TECHNOLOGY FUND

An open-ended equity scheme investing in technology and technology-related companies