In April 10th edition of Moneycontrol Pro Panorama: World Bank backs India’s 2047 growth potential, IPO market feels strain of Israel Iran war, ceasefire lifts sentiment but uncertainty remains ahead, and more

Moneycontrol Pro Panorama | Beyond buying the dip -- What markets may not have priced in

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The Panorama newsletter is sent to Moneycontrol Pro subscribers on market days. It offers easy access to stories published on Moneycontrol Pro and gives a little extra by setting out a context or an event or trend that investors should keep track of.

The Q4 FY2026 results of listed Indian companies have started unfolding even as equity markets got some relief from news of a temporary ceasefire in the US-Iran conflict. But market veterans are already looking beyond the ceasefire to price in the long-term impact of the conflict on the economy and corporate earnings.

Bank of America (BofA) Securities, in one of the most aggressive downgrades, cut FY2027 earnings growth for the Nifty50 to 8.5 percent from 14 percent before the conflict broke out. Likewise, Motilal Oswal Financial Services estimates the Q4 FY2026 earnings growth to be the weakest in five quarters, with some moderation in FY2027 growth. Others who choose to remain neutral have a caveat stating that continued paucity of gas and fuel, for which India is import-dependent for nearly all its requirements, would trigger sharp downgrades, going forward.

Not surprisingly, Indian equities have corrected by about 8 percent since the conflict in early March. The good news here is that the Nifty is trading at about 17 times the estimated one-year forward earnings, which is at a discount to the decadal average of 20 times.

Blame it on the US-Iran conflict, but valuations have come off. The question is: Does this build a strong case for an entry point into Indian equities? Is the Indian economy structurally resilient to shrug off the shocks from the recent conflict?

To be sure, India’s domestic economy, supported by deft policy decisions of the central bank and the government, has displayed resilience in past global crises, be it the Global Financial Crisis or the Covid-19 pandemic. However, this time around, the conflict brings with it the uncertainty of crude oil prices, critical to Indian economy. Media reports cite the US Energy Information Administration, which points out that fuel prices may continue rising for months even after the Strait of Hormuz is fully reopened. Forecasts from commodity markets peg Brent crude to rule around $100/barrel for some months ahead.

On top of this, the conflict has sparked regional tensions with attacks and retaliation continuing. Therefore, one could expect volatility in stock markets to continue.

The larger question raised in this FT article (free for MC Pro subscribers) is whether the markets have priced in all the negatives. The magnitude of supply chain disruption shocks, the time taken to rebuild lost infrastructure that may in turn impact trade, the forgotten (temporarily) shadow cast by the US tariffs and shifting trade policies between nations and finally, who and how the new global power plays unfold -- would all determine macro and micro trends globally and in India.

A pertinent point made in the FT article is that “chokepoints matter more deeply than before and many are beyond western control”, talking of control over energy, shipping routes and even rare-earth minerals.

These vulnerabilities may not have been priced in yet by markets. So, while buying the dips when valuations are at long-term lows may be theoretically correct, the uncertainty begs for caution. Our columnist Ananya Roy writes here why it is prudent for investors to clarify their investment objectives rather than forecast market outcomes.

Investing insights from our research team

TCS Q4 FY26 – Does it merit a look after a good quarter and recent stock underperformance?

Weekly Tactical Pick: What’s the underlying power of this energy exchange?

GM Breweries Q4 FY26: Input costs a headache even as growth continues

What else are we reading?

The ceasefire boosted sentiment, not certainty. The road ahead for investors

Chart of the Day | Is war gloom casting a shadow over IPO market?

World Bank says India can be a developed country by 2047, with reforms

Steady Indian market to help pharma companies amid US slowdown

Does Kalpakkam mark India’s nuclear inflection point?

Start-up Street | Sarvam AI's mega fund-raise: Trendsetter or a one-off?

Six lessons for investors on pricing disaster (republished from the FT)