Pankaj Tibrewal, founder and CIO of Ikigai Asset Manager, believes India is entering an interesting phase as corporate earnings show resilience and demand improves across several sectors.
Speaking to NDTV Profit, Tibrewal said the last two years of subdued market returns are part of the normal market cycle and that investors should not expect markets to deliver 15-20% returns every year.
Tibrewal said his interactions with companies across sectors suggest that demand is no longer the biggest concern. Instead, companies are increasingly focused on supply chains as they plan for stronger growth. He said the latest earnings season has also been better than expected, with broad-based strength across large-, mid- and small-cap companies.
FPI Flows Could Turn Positive
Tibrewal anticipates foreign portfolio investor flows to India to improve in the second half of the year. He pointed to foreign currency deposit inflows, bond market flows and greater stability in the rupee as signs of improving investor confidence.
He said many global investors had earlier stayed underweight on India, but the improving earnings picture and stable currency are making them reconsider their positions. However, strong earnings in the US remain a challenge, as there is less reason for investors to move money out of the US while its companies continue to report strong growth.
Also Read: Why India's Next Growth Story Begins With Young Indians
Why Tibrewal Is Cautious On US Markets
Tibrewal is cautious about US markets because of high valuations, rising inflation concerns, and heavy debt. He also believes the AI-led investment boom could face pressure as large technology companies move from generating cash to spending heavily on AI-related infrastructure.
He said investors should, therefore, focus on companies with strong management, good governance, healthy balance sheets, and strong cash flows rather than relying only on high earnings growth. He added that India's correlation with US markets has fallen significantly over the years: from 0.7 15 years back, it has come down to 0.3 now, which can reduce the impact of a global sell-off.
Metals, Exports And Midcaps In Focus
Tibrewal remains positive on metals and mining, citing geopolitical tensions, limited resources and years of underinvestment in new mines. He also sees opportunities in manufacturing and other hard assets.
He is particularly positive on Indian mid- and small-cap companies and prefers bottom-up stock picking. According to him, companies outside the top 100 by market value could grow significantly over the next three to five years if they have strong management, balance sheets, cash flows, and competitive businesses.
Tibrewal's broader message for investors was simple, and that is to remain patient through market volatility and have faith in India's long-term growth story. His one-line recommendation for India's journey towards 2047 was, "Buy India."
Also Read: India's Exports To West Asia Region Rise 8.62% In July: Commerce Secretary
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
