“The real move is happening beneath it, and bottom-up stock picking is getting rewarded and our belief is that this could be the trend going forward in the next 12 to 18 months,” Tibrewal said, adding that India’s mid- and smallcap stocks, taken together, are up 4% to 5% this year even as the Nifty has fallen.
A major theme in Tibrewal’s outlook is currency. He said the Indian rupee has been the second-worst performing major currency in the world since March 2025.
Counterintuitively, Tibrewal sees opportunity in that weakness. He said the rupee has fallen 10% to 20% against the currencies of competing exporters like China, Bangladesh, and Vietnam, making Indian goods cheaper and more competitive abroad.
He said companies in auto parts, engineering products, electronics manufacturing, chemicals, and textiles are reporting inquiries from new export markets where Chinese or Vietnamese suppliers had previously dominated.
He cited the textile sector specifically: with a 50% US tariff on Indian textile exports recently lifted, he said, “garment makers… are completely overbooked for the next many quarters to come.”
On the import side, Tibrewal said China’s currency, the yuan, has appreciated 18% to 20% against the rupee, while global shipping costs have roughly doubled and Beijing removed export rebates for Chinese manufacturers starting April 1.
Because global trade typically runs on profit margins of just 5% to 10%, he said, those shifts are pushing Indian buyers to source more goods domestically instead of importing from China — a trend he expects to continue as Chinese manufacturers exit lower-end production.
“The Chinese government wants to vacate the low-end manufacturing and focus on high-tech EVs, defense, and AI, and hence India has the right to win this time around,” Tibrewal said.
Another trend that stood out for him was the pick-up in private sector capital expenditure. He noted that mid-sized and smaller companies are expanding capacities at a faster pace, which could translate into stronger revenue growth over the coming years.
On consumer-facing businesses, Tibrewal said demand has stayed resilient so far. Conversations with retailers in the past ten days, he said, showed buying activity has not slowed despite rising costs tied to crude oil and, more recently, food prices.
He cautioned that a sustained rise in fuel costs could eventually hit demand, since not all of the recent increase has yet been passed on to consumers.
For the entire discussion, watch the accompanying video
