Poonam Tandon, Chief Investment Officer at IndiaFirst Life, expects India’s earnings growth to rebound meaningfully in the coming year, with profits likely returning to low-to-mid teens growth, and potentially even high-teens levels if macro conditions remain supportive.
In an interview with Moneycontrol, Tandon highlighted that the next phase of market performance will be driven by earnings upgrades rather than valuation expansion, making sector selection critical for investors.
BFSI Sector Poised to Lead Earnings Growth
According to Tandon, the banking and financial services (BFSI) sector is well positioned to lead the next earnings cycle. An expected pickup in credit growth, coupled with stable asset quality, could drive upgrades to earnings estimates across banks and NBFCs.
She noted that financials remain a key pillar of India’s equity market and are likely to benefit as economic activity improves and lending demand strengthens.
Commodity Cycle Turning Up Globally
On the global front, Tandon believes the commodity cycle is entering an upswing, supported by a weaker US dollar and emerging supply-side constraints, particularly in metals such as copper.
She added that increasingly inward-looking policies across countries are accelerating industrialisation trends, which could further boost demand for commodities over the medium term.
Midcap and Smallcap Stocks Becoming Attractive
Addressing opportunities in the broader market, Tandon pointed out that equities have seen a meaningful correction between October 2024 and March–April 2025. Markets have remained largely range-bound for over 14 months, still below last year’s highs.
As a result, select pockets of midcap and smallcap stocks, which have underperformed benchmark indices, are now offering attractive risk-reward opportunities for long-term investors, she said.
Keywords: India earnings growth outlook 2026, BFSI sector outlook, Poonam Tandon IndiaFirst Life, commodity cycle upswing, copper demand outlook, midcap smallcap opportunities India, equity market outlook India
