Midcap IT Outperformance
Discussing the IT sector, Tibrewal highlighted the difference between largecap and midcap players: “Growth momentum in large IT companies is okay, not too bad, not too great, and margins have held up. Mid and smallcap IT names could see faster growth as clients adopt AI and companies pivot. Our preference is for faster-growing midcaps, even if valuations are high, because growth can justify them.”
He added that while large IT companies may see single-digit growth, midcap players are positioned for double-digit expansion due to agility, AI adoption, and strong client wins.
AI Transition in Indian IT
Tibrewal expressed cautious optimism about AI adoption: “Indian IT missed reinvesting cash flows into new disruptions over the last decade. Large companies may struggle to pivot fully, but smaller companies could emerge with a stronger AI focus.”
Capital Markets and Non-Lending Plays
Highlighting capital markets, he said: “Non-lending plays like AMCs, depositories, exchanges, and distribution platforms have done well. Some showed strong numbers this quarter despite limited mark-to-market gains. Over three to five years, these franchises should benefit from a rising market.”
Private Banking Outlook
On private banking, Tibrewal shared: “We have a positive bias. NIM contraction is behind us. FY27 could see private banks grow 20%. This year is consolidation, but earnings growth should resume as deposits get repriced.”
Metals and Hard Assets
Tibrewal remains bullish on hard assets amid global supply constraints: “Commodities are now geopolitical tools, with supply concentrated in few countries. For example, copper demand over the next 18 years could match what was mined in 10,000 years. Metals like copper and aluminum will remain in tight supply, supporting long-term prices.”
Market Breadth and Index Recovery
Despite sectoral optimism, index-level gains remain muted: “Small and midcaps have been in hibernation for 15–16 months. NSE 500 is near highs, but breadth is weak. Next year, earnings growth should move into double digits, led by banking, autos, and power, which could push markets higher. FII buying resuming would help sentiment.”
Tibrewal’s commentary suggests that while largecap IT and midcaps follow different growth paths, private banking, capital markets, and hard assets are poised to benefit from structural changes, creating opportunities for patient investors.
