Geopolitical uncertainty weighing on markets, but India’s long-term growth outlook remains strong: IKIGAI's Pankaj Tibrewal

He expects double-digit earnings growth for the broader market, with FY27 earnings growth improving from about 8–8.5% in the current year to around 12–13% next year. Despite geopolitical noise and corrections in US markets, Tibrewal believes domestic conditions remain supportive.

• Global markets face uncertainty, but India's economy remains resilient
• Tibrewal predicts India's earnings growth will surpass global GDP in the next decade.
• Banking, pharma, auto, and metals sectors are attractive investment options.

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Global markets have been unsettled by recent geopolitical developments and comments from global leaders, leading to heightened uncertainty about the near-term outlook, according to IKIGAI's Founder and CIO Pankaj Tibrewal. Speaking to CNBC TV-18, he said the global order is undergoing a transition that may be painful in the interim, even as India’s domestic economy continues to remain resilient.

Tibrewal noted that over the next decade, India’s growth is expected to be at least double that of global GDP growth, positioning it as the fastest-growing major economy in terms of earnings. In the near term, he believes that corporate earnings are broadly in line with expectations after adjusting for labour code provisioning. IT and banking companies have reported reasonable results so far, and the broader market earnings season is only beginning.

He expects double-digit earnings growth for the broader market, with FY27 earnings growth improving from about 8–8.5% in the current year to around 12–13% next year. Despite geopolitical noise and corrections in US markets, Tibrewal believes domestic conditions remain supportive.

Tibrewal suggests that risk management is critical in the current environment. He cautions investors against chasing narratives and stressed the importance of adhering to basic investing principles. While short-term drawdowns cannot be ruled out, he said medium- to long-term portfolio performance should remain healthy. Historically, he noted, sell-offs driven by global events have provided good opportunities to invest.

According to Tibrewal, several companies with strong franchises, sound balance sheets and credible promoters are now available at attractive valuations, making it an appropriate phase to gradually increase equity allocation.

Sectoral preference

On sectoral preferences, he said banking, particularly private sector banks, appear well positioned after recent corrections. Pharma stocks, including CDMOs and domestic generics, also look attractive following their recent decline. Auto and auto ancillary companies continue to show momentum and now offer buying opportunities, while select capital goods companies stand out due to strong order book visibility and more reasonable valuations.

Tibrewal remains positive on metals, highlighting that resources are increasingly being used as geopolitical tools, which enhances the long-term value of commodities. Chemicals are at an inflection point, with many stocks delivering near-zero returns over the last five years, and China’s deflationary policies could support the sector.

Tibrewal also sees improving value in consumer durables and home building products, noting that a good summer season could help drive a rebound.

However, he said he remains cautious on most electronics manufacturing services (EMS) companies, except for a select few.

Tibrewal advised investors to avoid narrative-driven stocks that lack cash flow strength and balance sheet support, particularly those trading at excessive valuations. "Maintaining diversification, managing position sizes carefully and prioritising risk management remain essential in volatile markets," he said, adding that long-term growth tends to follow once capital preservation is ensured.