L&T, RIL may emerge frontrunners in Gulf reconstruction once West Asia conflict eases: Expert

Kshitiz Mahajan, CEO of Complete Circle Wealth, believes Larsen & Toubro Ltd (L&T) and Reliance Industries Ltd (RIL) could emerge as key beneficiaries of a potential reconstruction cycle in the Gulf region once the ongoing US-Iran-Israel conflict stabilises.

"L&T has shown strength. Even RIL, for that matter. The US is calling on RIL to establish refining capabilities. Jamnagar refinery is among the best refineries in the world, with efficiency levels of around 94 per cent. From waste, they are also generating energy. Companies of this type could have a first-mover advantage when reconstruction activities begin in the Middle East," Mahajan told Business Today on Tuesday.

He added that several other businesses may also benefit from rebuilding activity, but L&T and RIL appear best positioned at present. "There will be many other companies that could gain, but on the face of it, these two seem likely to benefit the most -- in fact, L&T possibly the most," he said.

Sharing his perspective on the recent sharp decline in precious metals, Mahajan said silver prices have corrected nearly 50 per cent from their highs, while gold has fallen around 25 per cent and capital markets are down roughly 15 per cent from their respective peaks.

"One should ideally have 5–7 per cent allocation to gold as a hedge. However, expectations from gold should be moderate -- around 8–9 per cent returns over the long term," he noted.

Mahajan refrained from offering a view on silver but recommended investors remain invested in gold as part of a diversified portfolio.