Stock market analysis and stories by Anagh Keremutt

Articles by Anagh Keremutt

23 Sep 2026, 05:17PM

Big names, uneven returns: What drove India’s business groups over the year

Lately, it feels like one Adani stock or another is turning up among the gainers. The Adani family's listed companies span power, ports, renewables, cement and other businesses, and several of its larger stocks have risen over the past year.

But how have India’s other big business groups fared? Lalit Kumar, Fund Manager at ICICI Prudential Mutual Fund, says large promoter-led groups benefit from “deep balance sheets, lower borrowing costs, and access to multiple growth engines.”

Most of these groups have businesses spread across multiple industries, which usually helps reduce risk. But that diversification does not always show up in stock returns. A few big companies can still end up deciding how the whole group performs.

For this analysis, we give bigger listed companies more weight based on their market value. And the results tell very different stories. Adani Group’s gains were largely broad-based, while IndusInd Bank and Ashok Leyland drove most of Hinduja’s return.

Even as most listed companies within Bajaj and Murugappa fell, both groups still posted positive returns as a few large stocks outweighed the declines elsewhere. Tata and Mahindra lost ground mainly because of their largest companies, while Reliance and Godrej saw all their group stocks decline.

Sector mix played a part too. Groups with greater exposure to power, steel and financials generally fared better, while IT, consumer and real estate businesses weighed on others.

In this edition of Chart of the Week, we look at how India’s major business groups performed over the past year and which companies drove those returns.

Group leaders drive gains, but breadth varies

The best-performing groups saw very different levels of participation across their listed companies. Adani drew support from several large companies, Hinduja leaned on two flagship names, while a handful of stocks drove much of the upside at Aditya Birla and Jindal.

Adani’s listed companies rose nearly 36% on a market-cap-weighted basis, with gains spread across its larger names. Its median stock gained roughly 17%, while Ambuja Cements was the main laggard.

Power generation and transmission drove much of the upside. Adani Power alone contributed around 15 percentage points to the group return. By Q1FY27, it had secured long-term buyers for 56% of its planned capacity additions, while Adani Energy Solutions had transmission projects worth about Rs 71,800 crore under construction.

IndusInd Bank and Ashok Leyland drove most of Hinduja Group’s 22% gain. Together, they account for about 95% of the group’s listed market capitalisation.

IndusInd Bank’s shares recovered from their sharp March 2025 fall, which followed discrepancies in its derivatives book. In Q1FY27, loans grew 3% sequentially, marking their first increase after six straight quarters of contraction. Ashok Leyland also gained as truck and light-commercial-vehicle demand stayed strong, while the company held a 34% share of India’s bus market.

Aditya Birla Group rose 20%, even though half of its 14 listed companies fell over the year. Vodafone Idea, Hindalco, AB Capital and Grasim drove much of the gain. UltraTech Cement, its largest listed company, declined and knocked off 4 percentage points from the group’s overall return.

Vodafone alone added 12 percentage points to the group gain. The Indian government reduced its long-pending telecom dues by 27% and postponed most repayments, easing a major financial burden. In Q1FY27, the company posted its first quarterly net subscriber additions since the 2018 merger.

The Jindal Group relied heavily on JSW Steel, which contributed around 6.2 percentage points to the group’s 7.8% return. Jindal Steel also supported the gains.

India’s curbs on cheaper steel imports helped domestic producers, with the government introducing a three-year safeguard duty in December 2025. The government also imposed anti-dumping duties on some steel products from China and Vietnam, supporting domestic pricing. In Q1FY27, JSW Steel more than doubled its profit YoY as higher steel prices and record first-quarter sales boosted margins.

Few winners keep group returns afloat

Positive group returns masked much weaker performance underneath. For example, Bajaj and Murugappa posted positive returns even as most of their companies fell over the past year.

Only two of Bajaj Group’s 11 listed companies gained over the year. Bajaj Auto drove much of the group’s 1.2% return, led by its exports, which jumped 54% in Q1FY27. Bajaj Finance was the only other stock in the green, while the group’s median stock fell 19%.

Murugappa Group gained 2.5% even as its median stock fell nearly 13%. CG Power and Cholamandalam Investment, which together account for about 62% of the group's listed market capitalisation, helped keep the overall return positive.

Demand for power equipment helped CG Power build a much larger order pipeline, with its power systems order backlog rising 59% YoY in Q1FY27. Cholamandalam Investment also rose 10.8% over the past year.

Heavyweights sink some groups, broad declines hit others

The weaker groups fell for different reasons. The losses were concentrated at Tata and Mahindra, but spread across the board at Reliance and Godrej.

Tata Group slipped 4%, with TCS largely driving the losses. The stock plunged 33% as Indian IT faced weaker client spending and worries over how AI could reshape outsourcing. Titan partly offset the impact, rising 42%.

Tata’s return needs some context. Tata Motors split its passenger and commercial vehicle businesses during the year. The latter listed separately only in November 2025, making its 1-year return less comparable with the rest. The RBI also rejected Tata Sons’ request to give up its non-bank lender registration, raising expectations of a future listing. Tata Chemicals, Tata Motors and other group stocks briefly rallied on the news before giving up much of those gains.

Mahindra & Mahindra played a similar role, driving much of the Mahindra group’s 8.5% decline. The stock fell over 15% as higher input costs and rising inventories weighed on the auto business. Its operating margin contracted 1.8 percentage points to 7.1% in Q1FY27.

Reliance Group dropped 13.5%, with all ten listed companies ending the year in the red. Reliance Industries was the main drag and accounts for over 90% of the group’s listed market capitalisation. The smaller stocks saw a sharper decline, with the group’s median return falling over 30%.

Vaqarjaved Khan, analyst at Angel One says RIL’s fall reflects pressure on near-term earnings and valuations, with West Asia disruptions raising crude premiums and freight costs. “At current levels, much of the bad news appears priced in,” he added.

Godrej recorded the steepest decline during the year, falling 21% alongside a 14% drop in the group’s median return. Godrej Consumer Products was the biggest drag, weighed down by higher raw material costs due to the West Asia conflict. The stock also plunged over 11% on August 12 after CEO Sudhir Sitapati resigned unexpectedly, shortly after shareholders approved another five-year term.

Godrej Properties added to the pressure as its pre-sales growth slowed after peaking in FY25. Rising premium housing supply also slowed sales across key markets.

A group may span several businesses, but its stock-market return can still depend heavily on where most of its listed value sits.

The Baseline

17 Sep 2026

Nifty 500 slips, but analysts still see upside in power, infra, financials and healthcare

By Anagh Keremutt

The US Federal Reserve raised interest rates on September 16 for the first time since 2023 as inflation remains high, with expensive oil adding to price pressures.

US President Trump says the West Asia war is “hopefully towards the end,” but investors may not be quick to cheer. The conflict has seemed close to ending several times before, only for fighting to resume.

The Nifty 500 is down 5.3% this year, while rising inflation and high oil prices revive bets on an RBI rate hike. But analysts still see upside in select stocks, betting on capacity expansion and bigger order books in power and infrastructure companies. Financials are benefitting from resilient loan books and diversification into newer income sources, while merger savings and rising outsourcing demand in the US are supporting optimism in healthcare.

UBS Head of India Research Divya Nagarajan sees opportunities in private banks and companies that can turn orders into revenue faster. “We also like data centre proxies, large consumer stocks, and quick commerce,” she added.

In this edition of Chart of the Week, we look at stocks with the highest analyst-estimated upside that have posted positive returns over the past 6-12 months.

Power capacity and grid spending fuel growth

India is adding thermal and renewable generation capacity while expanding transmission networks, increasing demand for transformers, cables and other electrical equipment. Companies across the chain are seeing larger project pipelines, stronger order books and higher output.

Adani Energy Solutions has projects worth around Rs 71,800 crore under construction, and CEO Kandarp Patel expects to add Rs 20,000-25,000 crore in new projects each year. Analysts see over 30% upside in the stock, with IDBI Capital expecting net profit to grow 69% annually between FY27 and FY28.

Analysts also expect around 25% upside in Adani Power and Adani Green Energy, as planned capacity additions could lift power generation and earnings. Adani Power has already secured long-term buyers for 56% of its planned capacity addition, while Adani Green’s generation rose 30% YoY in Q1FY27 as new renewable projects started generating power.

Hitachi Energy is also expected to rise nearly 24%. In Q1FY27, revenue surged 69%, while net profit more than doubled.

Analysts see 28.2% upside in KEI Industries, which is gaining from power transmission spending and household demand for cables. CFO Rajeev Gupta said higher-margin dealer and distributor sales now make up 59% of revenue, up from 51% a year ago. The company is also selling more extra-high-voltage cables, which earn operating margins of around 15%, compared with roughly 10.5% for lower-voltage power cables.

GE Vernova is expected to rise 27.5%, with Nomura forecasting net profit to grow 31% annually through FY29. The company emerged as the lowest bidder for a Power Grid project that brokerages estimate is worth Rs 13,000 crore.

Analysts also forecast a 25% rise in Triveni Turbine, helped by stronger exports, while Thermax is expected to climb 23.4% on expectations of an earnings recovery.

Infrastructure spending fills order books and lifts earnings

Spending on metros, ports and data centres is filling order books, while airports and industrial suppliers are earning more from existing capacity and higher-value products.

Cemindia Projects won new orders worth Rs 8,519 crore in Q1FY27, nearly three times the year-earlier amount, while analysts see 30% upside. MD Jayanta Basu expects around 25% revenue growth this year and next, supported by opportunities in ports, underground metros, tunnels and data centres.

Adani Enterprises is also scaling up its data-centre business and is expected to rise 28.7%. It has signed customers for more than 960 MW of capacity, versus the 65.4 MW currently operating. EBITDA in Q1 rose 49%, driven by its airports and copper business.

Analysts expect GMR Airports to rise 27.7%. Passenger traffic grew just 1% in Q1, but income rose 23% as Delhi earned more from airport charges, retail, cargo and advertising, while Goa benefited from the withdrawal of airline incentives. The company also reported a profit for the fourth straight quarter.

Usha Martin gets much of its demand from replacement sales. Around 80% of its wire-rope demand comes from replacing worn-out products in mines, cranes and lifts. The company is expected to rise over 25% as it sells more specialised ropes, including plastic-coated strands that fetch roughly 2-3 times the price of standard products. Q1 operating EBITDA rose 44%.

Jindal Saw and AIA Engineering are also expected to rise around 24%. Jindal has more than $1.3 billion of orders across India and Abu Dhabi, while AIA is banking on mining trials turning into repeat orders.

Financials gain from loan growth, cleaner books and new income

Banks are growing loans, reducing bad loans and improving lending margins. Lenders such as CreditAccess and IIFL Finance are seeing better repayments and faster growth, while Angel One is expanding beyond brokerage revenue.

Jammu & Kashmir Bank tops the entire list with a 51.1% upside potential. In Q1, loans grew 26.6%, while the bad-loan ratio fell 113 basis points to 2.37%. But net profit fell 12.5% as weaker margins and more money set aside for potential loan losses weighed on earnings.

Axis Bank is expected to rise 29.5% as management expects lending margins to recover from Q1 lows. The bank’s net interest margin (NIM) fell 34 basis points to 3.46% amid rate cuts and a shift towards corporate loans. Executive Director Subrat Mohanty reiterated the bank’s 3.8% target, while CFO Puneet Sharma expects stronger retail lending to help improve the loan mix.

Analysts forecast a 25.8% rise in CreditAccess Grameen as collections improve and loan stress eases. It collected nearly 99.7% of payments due in Q1, while money set aside for potential loan losses fell 63%. The loan book grew 16% and net profit jumped more than eight-fold, partly due to a weak base.

Gold loans have become IIFL Finance’s largest lending business, accounting for 51% of total loans. The portfolio more than doubled in Q1, while nearly 90% of overall lending is now secured. Money set aside for potential loan losses also fell 43%. Motilal Oswal expects net profit to grow about 44% annually through FY28, while consensus targets imply 23.5% upside.

Angel One is diversifying beyond broking into loan distribution, wealth management and asset management. The value of loans distributed through its platform more than doubled in Q1. Operating margin jumped nearly 11 percentage points to 32.7%, while net profit more than doubled as the company spent less on acquiring customers. The stock is estimated to climb 23.6% as per analysts.

Merger savings cut costs, US outsourcing boosts demand

The Aster DM-Quality Care merger gives the combined hospital network room to cut costs. Sagility, meanwhile, is gaining from rising outsourcing by US insurers and hospitals, which is increasing demand for claims and payment services.

Aster DM Quality Care is expected to rise 25.9%. Management expects the merged hospital network to save Rs 150-200 crore annually by sharing doctors, buying supplies together and combining support teams across the group. Since the merger took effect on July 1, most of those savings are yet to show up in earnings.

Analysts expect Sagility to rise 23.5% as US insurers and hospitals outsource more claims, payments and clinical work. The company already works with seven of the ten largest US health insurers and is winning more business from newer clients while expanding into additional services.

These stocks are based on Forecaster estimates from analysts, not estimates by Trendlyne. These are not buy recommendations.

The Baseline

10 Sep 2026

India’s private capex revival looks promising, but the opportunity is narrower than it seems

By Anagh Keremutt

India’s economy gave investors more to cheer about than they expected. GDP expanded 7.8% in Q1FY27, even as global uncertainty clouded the outlook.

But the bigger cheers came for something else: early signs of a revival in private capex. Overall investment across the economy grew 11.9%, up from last year’s 5.8%. That includes investment by households and the government, but data points to greater activity among private companies.

Bhavin Modi of Anand Rathi Institutional Equities said a few large orders partly explained private customers’ growing share of construction orders. But the trend across several construction companies suggested that “private capex is gradually broadening.” He cautioned that the revival remained at an early stage.

The value of new projects planned by private companies nearly doubled in Q1 to Rs 15.4 lakh crore, accounting for over 86% of all new projects by value. But much of the activity was concentrated in power and digital infrastructure such as data centres and cloud computing. The value of new manufacturing projects fell 40% despite resilient factory activity.

In this edition of Chart of the Week, we look at where private companies are planning to invest and which businesses are already winning orders.

Private companies step up as investment activity picks up

Companies are making bigger investment plans, borrowing more and accounting for a larger share of engineering and construction companies’ order books.

Private companies proposed new projects worth Rs 15.4 lakh crore in Q1FY27, nearly twice as much as a year earlier, while the value of new government projects fell 36%. But that doesn’t mean the government actually spent less. These numbers only show the value of projects proposed during the quarter. The actual spending could happen over several years.

Corporate borrowing is rising, with bank lending to industry growing 19.2% YoY in June, compared with 6.3% a year earlier.

Banks say companies are also borrowing more for daily business needs, while a costlier bond market is pushing some borrowers back to bank loans. HDFC Bank’s Deputy Managing Director Kaizad Bharucha said corporate demand was evenly split between daily financing needs and long-term loans during Q1. Electronics, automobiles, renewable energy and commodities were among its strongest sectors.

These investments are also showing up more clearly in companies’ order books. Private customers accounted for 40% of L&T’s domestic order book in Q1FY27, up from 27% a year earlier, with demand coming mainly from metals, buildings and factories, and a few large civil projects. CFO P. Ramakrishnan said, “We have seen a larger share of domestic orders gradually coming from the private sector over the past two years,” adding that the trend did not begin this quarter.

L&T is not alone. Between FY24 and FY26, private customers’ share of Cemindia Projects’ order book rose from 33% to 58%, while Ahluwalia Contracts saw its share increase from 35% to 61%.

Private companies are playing a bigger role, but where are they putting their money?

Concentrated bets: Who is winning?

New project announcements hit Rs 17.8 lakh crore in Q1FY27, the highest in five quarters, with private companies making up over 86% of the total. Across private and government projects, most of the planned investment was concentrated in a handful of sectors.

The value of new electricity and services projects more than doubled to Rs 7.6 lakh crore and Rs 7.8 lakh crore, respectively. IT alone accounted for around 83% of the services total, with the value of new projects nearly quadrupling. Madan Sabnavis, chief economist at Bank of Baroda, described private capex as “being driven by data centres and power.”

Australian data centre company AirTrunk plans to invest more than Rs 3 lakh crore in India by 2030. Building computing capacity often creates demand beyond servers, especially for power. For example, Meta is leasing Reliance’s AI data centre in Jamnagar and partnering with CleanMax and Fourth Partner Energy for nearly 1 GW of renewable energy.

Power investment also goes beyond supplying data centres. Tata Power spent Rs 5,375 crore in Q1FY27, its highest quarterly capex, on renewables, pumped hydro storage, transmission projects and manufacturing expansion.

So who is winning orders as power and data centre projects ramp up?

ABB India’s order intake jumped 50% in April-June 2026. Electrification orders surged 77% and made up over half of the total. The company said demand was led by data centres, metals and mining, buildings and infrastructure, and cement.

Excluding last year’s large Mumbai-Ahmedabad high-speed rail order, Siemens’ order inflows rose 44%. Grid upgrades, data centres and commercial real estate drove infrastructure demand.

Data-centre projects are also bringing orders for backup power and grid connections. Kirloskar Oil Engines won a 192-MW order from HyperNext for backup-power systems to support large AI and cloud data centres. Bajel Projects, meanwhile, won a Rs 300-400 crore order from a Mumbai data-centre customer to build a high-voltage substation.

The value of new manufacturing projects, however, fell 40%, driven by lower investments in food products, textiles, chemicals and construction materials. The construction sector saw a steeper drop, with investment values falling over 63%.

Factory output is still growing, even as companies hold back on new projects. Manufacturing activity grew 9.2% in Q1FY27, while a FICCI survey estimated factory utilisation at around 72%.

Most metals, electrical and electronics companies surveyed planned to add capacity. But most companies in the automobile, textile and chemical sectors weren’t planning to expand anytime soon. Manufacturers are worried about demand, trade restrictions and higher transportation costs, with the West Asia war adding to the uncertainty.

The early signs of a private capex revival are encouraging, but much of the activity centres on power and data centres. For investors, the key is to see which companies can keep winning orders and whether investment spreads across more industries.

The Baseline

03 Sep 2026

India’s gold-loan rush: Bigger books, tighter margins

By Anagh Keremutt

“Avoid buying gold if it’s not necessary,” Prime Minister Narendra Modi reiterated on September 1. Urging Indians to renew their pledge for an Atmanirbhar Bharat, Modi took to Instagram to appeal to citizens to support local products.

Lenders, meanwhile, are tapping the gold sitting in Indian households. Tata Capital and Godrej Capital have entered or expanded into gold-loan lending through acquisitions. Aditya Birla Capital joined the frenzy, with plans to open 200-300 gold-loan branches by March 2027 and build a network of around 1,000 branches over the next three years.

Banks and non-banking financial companies (NBFCs) are expanding aggressively into the segment as gold loans typically carry higher lending rates with lower losses. The pledged gold is also easy to value and sell if a borrower fails to repay.

But the growing competition is forcing established players to cut rates, while volatile gold prices are reducing the protection behind their loans. Siddharth Goel, Director of Asia-Pacific Financial Institutions at Fitch Ratings, said, “We do not see an immediate risk to lenders from the recent decline in gold prices.” However, he warned that another 15-20% fall could test lenders’ ability to contain losses, particularly if small businesses relying on these loans also struggle to repay.

In this edition of Chart of the Week, we look at why gold loans are booming and whether lenders can turn that growth into higher profits.

Why lenders want a piece of the gold-loan boom

A combination of rapid growth, low defaults and attractive interest rates is enticing lenders to the gold loan segment. In FY26, outstanding gold loans grew 50.4%, outpacing the 19.7% growth in loans to small business owners, 13.9% in personal auto loans and 9.4% in home loans.

Rising gold prices meant customers could borrow more against the same amount of gold. For example, Muthoot Finance's gold-loan AUM rose 44% YoY in Q1FY27 even as tonnes of pledged gold declined and customer growth was modest. Manappuram's gold-loan AUM nearly doubled over the same period as pledged gold also rose 18%.

Gold loans also saw fewer repayment delays. In FY26, just 1.2% of outstanding gold loans were overdue for one to six months, versus 2.1–3.3% for home, auto and small-business loans.

Even when borrowers fall behind, final losses tend to remain low because lenders can sell the pledged gold more easily than a house or repossessed vehicle. CRISIL says credit costs for gold-loan NBFCs, which cover provisions and loan losses, have stayed below 1% over the past five years.

Gold loans can also offer higher yields than some other secured products. IIFL Finance and Capri Global, for instance, reported gold-loan yields of around 18.6% in Q1FY27, compared with 10.5% to 16.8% from their housing and secured MSME portfolios.

Competition takes the shine off margins

Banks held around 78% of the organised gold-loan market at the end of FY26, although this includes large agricultural and other non-retail gold loans. Muthoot and Manappuram are leaders in the NBFC retail segment, but newer NBFCs are eating into their share, forcing them to offer lower rates to entice customers.

NBFCs increased their share of the overall organised market from 18% to 22% over the past two years. But that growth is being spread across more players: the four largest gold-loan NBFCs’ combined share fell from around 90% to 70% over the past four years. Among others, Tata Capital, Godrej Capital and Aditya Birla Capital have expanded into gold loans.

Motilal Oswal expects this shift to persist. “Going forward, we expect large private banks and diversified NBFCs to scale up their gold loan operations and network, while gold-loan NBFCs cede some market share,” it said.

Banks have access to cheaper funding through customer deposits, allowing them to offer lower interest rates. For instance, SBI’s gold-loan rates average about 9.6%, depending on the repayment plan. In comparison, Muthoot and Manappuram charge around 16.3% and 16.6%, respectively, depending on the loan scheme and interest-payment frequency.

So why opt for the costlier alternative? NBFCs cater more to smaller borrowers, offering faster processing, flexible repayment and easier access, especially in rural and semi-urban areas.

The impact of growing competition is seen in the recent numbers. Gold loans made up about 95% of Muthoot’s loan book in Q1FY27, and the portfolio grew 6% QoQ. But both its overall yield and net interest margin fell nearly 3 percentage points as it cut rates to retain its customers, while borrowing costs rose only marginally.

Manappuram had already made a similar trade-off. After aggressive rate reductions, its gold-loan yield fell over 5 percentage points to 17.1% in FY26. Group CFO Buvanesh Tharashankar said, “We had overcorrected in terms of pricing. So in Q1, we took some actions to enhance the yield.” He added that the company expects the yield to settle around 18%.

Volatile gold tests lenders’ protection

Falling gold prices don’t directly create repayment problems. The borrower owes the same amount, but the gold backing the loan is now worth less, which raises the loan-to-value ratio (LTV). The LTV shows the amount lent against the pledged gold’s current value.

A higher LTV means lenders have less protection in case the gold’s price drops sharply. The LTV can also increase if the lender provides additional loans against the same gold. The RBI allows lenders to provide consumption gold loans of up to 75-85% of the collateral value. Lenders must stay within that limit throughout the life of the loan.

Between Q4FY26 and Q1FY27, that cushion narrowed across the three listed lenders as gold prices fell over 5%. Muthoot’s implied LTV rose 5 percentage points to 64%; Manappuram’s increased 8.3 points to 65.6%; and IIFL’s climbed 7 points to 70%.

But the thinner cushion hasn’t led to large losses yet. IIFL’s gross bad-loan ratio for gold loans rose from 0.35% in Q4FY26 to 0.61% in Q1FY27. The company said that it does not auction the pledged gold immediately after a missed payment when the gold is still worth enough to cover the loan. IIFL’s losses after recoveries on defaulted gold loans have also stayed close to zero over the past 15-16 years.

The real warning sign would be if LTVs, bad loans and actual losses rose together after a sharp fall in gold prices. Lenders may then struggle to recover the full loan amount even after selling the pledged gold, forcing them to absorb the shortfall.

Analysts remain optimistic, however, forecasting that the yellow metal will gain another 10% by year-end. “We expect central bank gold buying to remain a multi-year trend as countries diversify their reserves against geopolitical and financial risks,” said Lina Thomas and Daan Struyven of Goldman Sachs.

The Baseline

27 Aug 2026

From weak rains to rural spending: India’s next monsoon test

By Anagh Keremutt

India’s farmers are getting squeezed from two sides this year. The conflict in West Asia has increased energy and fertilizer costs, while a weak monsoon is raising risks for crop yields and farm incomes.

A strengthening El Niño is adding to the pressure. As of August 24, cumulative rainfall was 13% below IMD’s 50-year average for the period. July offered brief relief after a sharper deficit in June. The national figure also hides wide differences between states, with some major crop-growing regions facing steeper shortfalls.

“Deficient monsoons have had a bigger impact on food inflation than on rural demand so far,” Nomura said, cautioning that “these are still early days.”

The early sowing shock largely eased after July’s rain allowed farmers to catch up on delayed planting. The shortfall in kharif planting narrowed from 25% at the end of June to 2% by mid-August. Now the worries have shifted to crop yields. Higher irrigation costs could squeeze farm incomes, and impact rural spending even though it remains stable for now.

In this edition of Chart of the Week, we look at how India’s uneven monsoon is changing risks for crops, farm incomes and rural spending.

India’s monsoon recovery hides regional stress

India’s monsoon got a much-needed recovery in July after a rainfall deficit of 35.4% in June. But the relief was short-lived, with rainfall slipping below normal again in August. The national average masks the wide regional differences. Central India was only 1% short of normal, while the South was 21% below average and the East and Northeast saw a deficit of 27%.

These differences are sharper at the state level. Between June 4 and August 10, Bihar recorded a shortfall of 36%, while neighbouring Odisha saw a surplus of 28%. Punjab and Andhra Pradesh were each short by 35%.

Farmers’ dependence on rain varies across regions. For example, Punjab accounted for 9.6% of India’s rice output in 2024-25, but almost all of its rice fields were irrigated. That gives farmers some protection from weak rainfall, while increasing their dependence on groundwater, electricity and diesel.

Madhya Pradesh saw a 16% rainfall deficit. With less than 10% of the crop area under irrigation, weaker rains pose a bigger risk in a state that produces 35% of India’s soybean and 15% of its maize.

Nomura gives more weight to rainfall in regions that account for a larger share of each crop’s production. By that measure, jute is the most exposed, with key growing regions getting 27% less rainfall than normal. Rice and coarse cereals follow at 14% and 13%, while pulse-growing regions are 9% below normal.

The early-season sowing shock has eased. While overall kharif planting has largely recovered, rice and maize sowing are still 4% lower. Pulses and oilseeds have nearly caught up. The focus now is whether the crops in the ground get enough water to support yields as El Niño conditions strengthen.

Rising input costs eat into farm incomes

Around half of India’s farmland lacks irrigation, leaving these regions exposed during weak rainfall. Farmers turning to diesel pumps can see their costs rise as weaker rains force them to irrigate more.

Costs were already rising amid the West Asia conflict. State-run oil companies hiked diesel prices four times in May, taking the cumulative increase to about 8.6%. Farmer organisations estimate that diesel accounts for 20-25% of cultivation costs. “Any rise in diesel prices increases costs as nearly every farm activity relies on diesel-run machinery,” said Puneet Singh, a farmer from Haryana.

The conflict also raised fertilizer and raw-material costs, though the government has absorbed much of that increase to protect farmers.

In Punjab, paddy farmer Dalbir Singh stressed over dry cracks that appeared in his fields during this season. Farmers like Singh can spend up to Rs 570 every hour as they turn to diesel generators to pump water.

Rural income growth was already weakening. NABARD’s July survey showed that only 27.7% of rural households reported higher incomes from the previous year, the lowest since September 2024.

Food prices are up 5.1% since April, compared with 1.9% over the same period last year and a five-year average of 4.6%. Sugar prices are 9% higher, while rice has also become more expensive. Higher retail food prices do not necessarily mean higher farm earnings, especially when input costs are rising faster than income.

The latest increase in farm costs may not be fully visible in retail prices yet. Maximo Torero, chief economist at the United Nations Food and Agriculture Organization, says commodity-price shocks typically take three to six months to feed into retail food prices.

Rural spending holds up, for now

Higher farming costs and weaker income growth haven’t affected rural spending yet. Both tractor and 2-wheeler sales grew in strong double digits in Q1FY27. Rural households entered the kharif season with support from the previous harvest and easier access to credit.

Bajaj Asset Management notes that consecutive years of deficient rainfall generally have a greater impact on farm incomes and rural consumption than a single delayed monsoon. India’s large foodgrain stocks also provide a buffer against a sharp rise in cereal prices.

Part of this resilience comes from the previous crop cycle. Rajesh Jejurikar, CEO of M&M’s Auto and Farm Sector, said, “Rabi cash flows have been healthy, with wheat procurement improving 19%.” Labour shortages are also pushing farmers towards greater mechanisation. The company’s tractor sales rose 18% in Q1.

Escorts Kubota expects the tractor industry to grow in the mid-single digits in FY27, even after volumes rose about 19% in Q1. Management says monsoon distribution and festive demand will be key over the coming months.

Credit is also providing a cushion. Hero MotoCorp’s Chief Business Officer Ashutosh Varma said, “Our retail finance penetration rose to nearly 65% in July as access to credit improved.” He expects financing to provide further support during the festive season.

Spending on everyday goods is holding up too. Dabur Global CEO Mohit Malhotra said Nielsen data showed rural FMCG growth outpacing urban by 1.7 percentage points. While there was no immediate sign of weakness, rising inflation remained a concern.

Rural demand is holding up for now. The real test will come after the kharif harvest, when this season’s yields and farm incomes start shaping food prices and consumption.

The Baseline

20 Aug 2026

India’s IPO market: From listing gains to long-term performance

By Anagh Keremutt

India’s IPO boom has lost steam this year as geopolitical tensions and cautious investors prompted companies to rethink their listing plans. But demand for the issues that did launch remains strong, with recent mainboard IPOs drawing healthy investor interest.

Several companies deferred their listing plans, while others put their IPO plans on hold. Zepto, for instance, had planned to raise Rs 8,010 crore through an IPO but has now opted to raise an eighth of that sum privately from existing investors. The move came after domestic mutual funds pushed back on the $4-5 billion valuation Zepto was seeking.

“A slower IPO market has led to a transition period of pricing discipline. This is the beginning of the next IPO boom,” said Bharat Lahoti, President and Co-Head of Factor Investing at Edelweiss.

So, are India’s IPOs still worth betting on?

Average listing gains in mainboard IPOs fell to 8.7% in 2026 from 31.8% in 2021, even as most stocks listed this year are trading above their issue prices.

The sectors driving IPO activity offer a glimpse into where companies see growth and need fresh capital. There’s also a divergence between SME and Mainboard performance. While SME (small & medium enterprises) IPOs yield higher listing pops on average, their performance after listing leaves much to be desired. And strong demand at the IPO stage does not always translate into strong post-listing returns.

In this edition of Chart of the Week, we look at how the assessment of a ‘good’ IPO in India is evolving.

Booming sectors fuel the IPO rush

The IPO boom post pandemic has been a diversified one, with companies from sectors such as banking and finance, industrials, software, and consumer durables launching in the public markets to raise capital. In contrast, telecom, oil & gas, and media have seen fewer listings in recent years.

Each year, one or two industries tend to dominate listings. In 2024, construction & engineering firms accounted for more listings as infrastructure spending picked up. A year later, electrical-equipment companies led the pack as they raised capital to expand capacity amid rising power demand and investment in the grid.

This year, textiles has led with four IPOs so far. Recent trade agreements with the US, UK, EU, New Zealand and other markets are expected to lower tariffs on textile exports, adding to the sector’s appeal. “The India-UK FTA is likely to increase apparel and textile exports by 20-25% every year,” said Naren Goenka, chairman of Bharat Tex Trade Federation.

Textile companies started to invest heavily in new capacity as these trade agreements were getting finalised.

Alpine Texworld’s IPO shows how rising global demand is prompting textile companies to expand capacity. Its weaving units operated at over 107% of installed capacity in FY26, while the newly launched spinning unit also reached 88.5% utilisation. The company raised around Rs 126 crore through its IPO and plans to use part of the proceeds to set up a new weaving facility, increasing its fabric production capacity by 28%.

Aastha Spintex is another example. It will use 65% of its IPO proceeds to acquire Falcon Yarns for Rs 131.5 crore, more than doubling its spinning and spindle capacity.

Internet software & services has also seen three listings this year, with companies seeking capital to tap growing demand for cloud and digital infrastructure. Amagi Media Labs, for instance, will invest over 30% of its IPO proceeds in technology and cloud infrastructure.

Listing pops grab headlines, but are only half the story

Smaller issue sizes and strong subscription demand often make SME IPOs attractive to investors chasing listing gains. But data suggests that these initial pops didn’t translate into stronger performance this year.

SME IPOs listed at an average gain of 10.3%, versus 8.7% for mainboard IPOs. But only 55% of SME listings are trading above their issue price, versus 79% of mainboard listings.

Some investors chase SME IPOs for quick listing gains, giving less importance to what happens after the debut. But exiting these small issues isn’t easy. About 32% of SMEs that debuted at a premium this year ended below their opening price on listing day. Half of them also hit their lower circuit, restricting further trading that day.

With limited institutional participation, liquidity plays a key role in how easily investors can enter and exit SME stocks. Shouraya Khadgawat, lead strategist of equities at Centricity WealthTech, said, “Low trading volumes can make it harder to sell a large holding without significantly affecting the stock price.”

For instance, Defrail Technologies listed at a premium of over 28%, but hit the lower circuit on both the listing day and the following trading session. The stock now trades 4% below the issue price.

The key, however, is what happens to the business after listing. So far this year, mainboard IPOs are up 29% on average, compared with 22% for SMEs.

Omnitech Engineering listed on the mainboard at an 11% discount after its IPO was subscribed 1.14 times. The company’s borrowings had more than tripled over two years by FY25. Nearly 40% of the issue was an offer for sale by the promoter, adding to investors’ concerns.

By FY26, the company’s debt burden eased despite higher borrowings. Rather than aggressively cutting debt, Omnitech restructured its existing debt and is investing for growth. In Q1FY27, revenue rose 61% and net profit surged 5.7 times, while the company said it was expanding capacity to service its growing order book. The stock now trades 150% above its issue price.

Shadowfax Technologies followed a similar path. It listed at a 9.2% discount, but the stock has more than doubled from its issue price after profitability jumped. CEO Abhishek Bansal also raised the company’s FY27 revenue growth guidance from 27-30% to 38-40%.

A weak debut, then, does not tell the full story. The listing price reflects what investors think of the business at the time of the IPO. What matters over time is whether the business can deliver on those expectations.

The Baseline

14 Aug 2026

How India’s top CEOs got paid in FY26

By Anagh Keremutt

Indian companies faced rising costs in FY26, with supply disruptions and volatile crude oil prices weighing on margins towards the end of the year. Several firms responded with price hikes, while others absorbed the higher costs to protect demand.

But how much of that pressure reached the corner office?

The median CEO compensation rose 5% to Rs 10.5 crore in FY26, the slowest growth since COVID-19. Anandorup Ghose, Partner at Deloitte India, said CXO pay decisions in India have become more measured. “With Indian equities underperforming over the past 12-18 months and market risks rising, boards have kept pay hikes in check,” he added.

Performance-linked bonuses and stock awards made up a huge chunk of many executives’ pay. Swiggy's Group CEO Sriharsha Majety received Rs 550 crore in FY26, seven times his previous year’s compensation. Nearly all of it came from exercising stock options during the year.

While IT CEOs topped the pay charts, some executives took home a much larger share of their companies’ profits. Bank CEOs earned relatively little compared with the profits of the country’s biggest lenders.

In this edition of Chart of the Week, we look at some of India’s highest-paid CEOs across industries in FY26.

IT CEOs cash in on stock rewards

Software companies typically pay their CEOs some of the highest salaries in India. In FY26, stock-linked rewards made up a large part of that pay.

Persistent Systems CEO Sandeep Kalra received the highest pay among IT CEOs in FY26, with his compensation equivalent to about 20.8% of the company’s net profit. His total compensation of Rs 388.6 crore was 162% higher than the previous year. Excluding exercised stock options, Kalra’s core cash salary rose 43%.

Salil Parekh of Infosys received a total remuneration of Rs 82.6 crore, up 2.4% YoY. His base pay, retirement benefits and performance-based bonus accounted for 38.6% of his total pay. The larger chunk of his pay came from stock awards exercised during the year. Under Parekh’s leadership, Infosys secured numerous large deals during the year, half of which were new deals.

Wipro’s CEO Srinivas Pallia took home Rs 49.6 crore in FY26, about 0.4% of the company’s profit. His pay included a fixed salary of Rs 29 crore, with the rest from performance-based rewards.

Some CEOs took a bigger slice of profits

CEOs in personal products, real estate, pharmaceuticals and auto sectors earned higher pay packages relative to their companies’ FY26 profits. Some executives received significant pay hikes.

FMCG company Marico paid its CEO Saugata Gupta Rs 47.3 crore, accounting for 2.7% of the company’s annual profit. His total pay rose 20.7% from the previous year, with more than half coming from exercised stock options.

Sudhir Sitapati, MD & CEO of Godrej Consumer, took home Rs 31.5 crore, about 1.7% of the company’s annual net profit. His remuneration, however, fell 10.2% from the previous year. The company's stock tanked earlier this week after Sitapati abruptly resigned, shortly after his tenure was extended by another five years.

Dabur paid CEO Mohit Malhotra Rs 15.4 crore. Despite taking on the Global CEO role, Malhotra’s pay rose just 5% during the year, slightly below the median hike.

Mahindra Lifespace’s Amit Sinha earned Rs 36 crore, about 12% of the company’s profit. Stock awards from the parent company, Mahindra & Mahindra, accounted for three-fourths of his total pay. Under Sinha’s leadership, the company has expanded its development pipeline fivefold since he took the helm in FY23.

Gaurav Pandey of Godrej Properties received Rs 23.2 crore, four times his pay in the previous year. Most of the increase came from his performance bonus. During the year, the company achieved its highest-ever booking value, up 16%, while Pandey’s compensation amounted to 1.3% of the company’s profit.

Kiran S Divi of Divi’s Laboratories received Rs 34.8 crore, 96% of which came from profit-linked incentives.

Dr. Satyanarayana Chava, CEO of Laurus Labs, received Rs 24.8 crore, or 2.8% of the company’s annual profit. His pay surged 88% from the previous year, with a significant portion coming from bonuses as the company’s EBITDA jumped 64%.

CEO Pranay Godha received an 11% pay hike, taking his compensation at Ipca Laboratories to Rs 10 crore. The increase came as the company’s net profit rose 51%.

JK Tyre paid CEO Anshuman Singhania Rs 39 crore, about 5% of the company’s annual profit. Three-fourths of his pay came from commissions linked to profitability. The company’s profit surged 50% in FY26.

Ashok Leyland CEO Shenu Agarwal earned Rs 18.2 crore, almost entirely as salary. His pay jumped 48% in FY26. The company also posted its highest-ever commercial vehicle sales, beating its previous record from FY19.

Sona Comstar CEO Vivek Vikram Singh took home Rs 15 crore in FY26, nearly four times his pay a year earlier. A third of his pay came from performance-linked stock awards. When China restricted exports of rare-earth magnets, a key input for electric vehicle motors, Singh’s team redesigned Sona Comstar’s traction motors in just four weeks without missing customer commitments. He also helped plug a Rs 300 crore revenue gap after a major customer’s new model underperformed, bringing in 31 new programmes and three new customers.

Bank CEOs earn a smaller piece of net profits

CEO remuneration at the country’s top banks was less than 0.05% of their FY26 profits. For ICICI Bank’s CEO, the figure is higher when exercised stock options are included.

HDFC Bank CEO Sashidhar Jagdishan took home Rs 15 crore, up more than 25% from the previous year.

Sandeep Bakhshi, CEO of ICICI Bank, received Rs 10.6 crore. With stock awards exercised during the year, his total pay rose to Rs 39 crore.

Axis Bank CEO Amitabh Chaudhry earned Rs 10.3 crore. Half of his pay was base salary, while 20% came from performance bonuses earned in previous years and paid out in FY26.

The Baseline

07 Aug 2026

Indian IT wins bigger deals as AI spending grows

By Anagh Keremutt

Indian IT stocks staged a comeback in July after spending more than two years on the sidelines. The Nifty IT Index surged 16.7% during the month, its biggest monthly gain in five years.

Jefferies upgraded the sector from ‘Underweight’ to 'Neutral', citing tactical upside due to a reversal of the AI trade, as investors become less concerned about AI disrupting IT services companies. The brokerage also sees limited downside amid cheaper valuations in software companies.

How sustainable is July's rally? Are investors just rotating into cheaper IT stocks, or are company earnings beginning to stabilise?

The latest quarterly results show mixed signals. Deal wins remain healthy, while some companies sound optimistic. But client spending is uneven and management teams continue to flag longer decision-making cycles among customers.

“The real test is not July's rally. It’s whether deal wins in the September-quarter can prove this is structural and not just a bounce from oversold levels,” independent market expert Ajay Bagga said.

In this edition of Chart of the Week, we examine whether this rally has legs.

Healthy deal wins, but slower revenue growth

The Q1FY27 earnings show companies winning large transformation deals despite cautious technology spending. While AI is becoming a bigger part of those contracts, revenue growth has yet to pick up.

During the quarter, Infosys reported stronger large deal wins, which rose 12.5% sequentially to $3.6 billion. HCLTech saw record new deals worth $2.4 billion, up 26.3% from the previous quarter. This excluded the mega deal signed in early July with a European Fortune Global 50 company.

Wipro signed fewer deals overall, but large deal wins climbed 12.9%. Wipro clients are prioritising bigger transformation programmes even as overall technology spending was subdued. Tech Mahindra's deal wins for the quarter were largely unchanged at around $1.1 billion.

Unlike its peers, TCS reports total contract value (TCV) instead of quarterly deal wins, making direct comparisons difficult. The company’s TCV declined over 20% from the previous quarter to $9.5 billion, despite winning multiple business transformation contracts such as the $800 million SKF deal.

AI was a common theme in many of the largest contracts signed during the quarter. HCLTech said demand was driven by AI-led transformation, cloud migration and digital engineering, while its Advanced AI business grew 62.1% YoY.

TCS said the annualised revenue run rate for its AI services business grew 13.6% from the previous quarter, with growth backed by real-world deployments. The company deployed AI agents alongside insurance claims examiners, helping cut claim settlement time by 40%. Managing Director and CEO K Krithivasan said, “AI typically delivers 10-15% productivity gains,” with customers often choosing to spend those savings on additional work instead of cutting technology budgets.

Wipro’s Managing Director and CEO Srini Pallia echoed that view, saying clients are focusing on cost reduction and vendor consolidation. “Some of our clients are reinvesting those cost savings into AI capabilities,” he added.

However, the stronger order pipeline has yet to translate into broad-based revenue growth. Tech Mahindra was the only major IT company to report notable QoQ revenue growth at 2.6% in constant-currency. Infosys grew 1%, while TCS managed just 0.4%.

HCLTech's revenue slipped 0.5% due to weak discretionary tech spending and seasonal slowdowns. Wipro reported a steeper 1.2% decline as demand in the Americas remained soft.

The recovery still lacks breadth

Healthy deal wins didn't necessarily translate into a stronger outlook. While Tech Mahindra sounded confident, Infosys cut its guidance and Wipro stayed cautious, highlighting an uneven recovery across the sector.

Take Infosys. Managing Director and CEO Salil Parekh said financial services, manufacturing and energy saw healthy demand. But retail and consumer goods are weaker because of inflation, tariffs and geopolitical uncertainty. Despite stronger large-deal wins, Infosys lowered its FY27 revenue growth guidance to 1.5-3%, trimming the upper end of the range by 50 basis points.

Explaining the revised outlook, CFO Jayesh Sanghrajka said, “The guidance reflects slightly over 1% impact from reduced spending by a large European manufacturing client and our decision not to pursue deals that didn't align with our return expectations. It also includes an expected 1.7% contribution from the Optimum Healthcare and Stratus acquisitions,” suggesting underlying weakness in the firm’s organic business.

Wipro saw a similar slowdown, but for different reasons. Pallia said “Clients are taking longer to make decisions as companies become more selective about technology spending,” adding that some large deals are also taking longer to ramp up. Consequently, Wipro guided Q2 revenue to grow in the range of -1.5% to 0.5% in constant-currency terms.

Even TCS saw its biggest market soften during the quarter. North America, its largest geography, weakened during the quarter, while consumer-facing businesses remained under pressure despite strength in BFSI and regional markets.

Tech Mahindra had a more confident outlook after delivering the strongest sequential revenue growth among its larger peers. Managing Director and CEO Mohit Joshi said the company has entered the final phase of its three-year turnaround plan, where the focus shifts from margin expansion to growth. “The company is positioned to grow faster than its peers in FY27,” Joshi said, adding that growth momentum is expected to continue through the remainder of the year.

HCLTech retained its FY27 revenue growth guidance of 1-4%. Managing Director and CEO C. Vijayakumar noted that the guidance reflects only organic growth and excludes acquisitions such as Jaspersoft.

IT clients are spending more selectively. The coming quarters will show whether demand broadens across industries and client segments, or if this is the new normal.

The Baseline

31 Jul 2026

India's chemical makers move into higher-value products, new industries

By Anagh Keremutt

Despite the tit-for-tat in West Asia, India's chemical stocks have been among the market's best performers over the past three months. The chemicals & petrochemicals sector has gained 9.8%, while the Nifty500 is up just 2.6%.

Global companies are diversifying their supply chains beyond China, with India emerging as the preferred supplier of specialty chemicals. Local manufacturers are also benefiting from policy support: India recently imposed anti-dumping duties ranging from $75 to $1,748 per tonne on Sulphenamides Accelerators and $200.7 per tonne on PET resin. The former is used in tyre manufacturing, while the latter is widely used in plastic bottles and food packaging.

Demand from electronics, semiconductors, electric vehicles and AI data centres is boosting demand for higher-value chemicals such as fluoropolymers, battery materials, refrigerant gases and advanced cooling fluids.

Anuj Sethi, Senior Director at Crisil Ratings, said, “Domestic demand will be the key driver this fiscal, supported by diversified end-user segments.” He added that this should help the industry's revenue grow 7-8% this fiscal, even as export demand remains subdued.

In this edition of Chart of the Week, we look at how chemical makers are expanding into higher-value products and new industries, and whether that can support their recent rally.

Chemical makers bet on new demand

Indian chemical manufacturers are shifting towards specialised materials for electric vehicle (EV) battery components, computer chips, and AI data centres.

Gujarat Fluorochemicals (GFL) plans to invest Rs 2,300 crore in FY27 to manufacture EV battery components, with most of it going towards setting up a natural graphite anode active material facility. CEO Bir Kapoor said, "With this addition, we will be able to address nearly 70% of the value of an LFP (lithium iron phosphate) battery cell."

Beyond this, the company is allocating Rs 150 crore to double its R32 gas capacity to 20,000 tonnes to capitalise on the AI data centre cooling boom. GFL is also spending Rs 250 crore to produce more fluoropolymers, which are used in semiconductors, EVs and clean energy equipment. Executive Director Kapil Malhotra said the company expects fluoropolymer volumes to grow 15-20% in FY27.

Meanwhile, Himadri Speciality Chemical has allocated Rs 70 crore to build India's first commercial carbon nanotube plant. These tubes act as highly efficient conductors for lithium-ion batteries. CEO Anurag Choudhary highlighted the material’s advantage: "It is 100x stronger than steel with the conductivity of copper." He added that the company is not dependent on China (which currently controls 100% of global lithium iron phosphate capacity) for any product.

Himadri is also investing Rs 170 crore to convert part of its existing carbon black capacity into 6,000 tonnes of Super Speciality Carbon Black, which is used in engineering plastics, battery materials and specialty coatings. Choudhary said the expansion will produce “significantly higher value-added products that enhance margins.”

Navin Fluorine is spending Rs 236.5 crore to add 15,000 tonnes of refrigerant gas capacity by the end of this fiscal, targeting up to Rs 825 crore in peak annual revenue. CFO Anish Ganatra explained, “70% of recent profit margin growth came from launching new factories and increasing sales volumes.” He added that factors like currency gains were completely offset by inflation.

Aether Industries is expanding its research labs to phase out selling cyclical commodity chemicals. Director Rohan Desai noted that the company completed more than 50 customer and certification audits last year and added 19 marquee clients. He said, "These interactions have boosted our confidence that the contract research & manufacturing and exclusive contract manufacturing businesses can contribute more than 70% of total sales (currently 55%) by FY30."

To support this expansion, Aether is building a new research and development (R&D) plant and wing, scheduled to open by mid-2027.

Supply chain disruption separates winners and losers

Global shipping disruptions and the conflict in West Asia have exposed which chemical companies can absorb higher raw material costs, and which are vulnerable.

In Q1FY27, SRF's chemicals business grew 26%, driven by higher sales of refrigerants, industrial chemicals and fluoropolymers (specialty plastics used in industrial products). CFO Samir Kashyap said, "Post the commissioning of our new HFO (refrigerant gas) plant in Dahej, we will be in the top three to four refrigerant gas manufacturers globally." While supply chain disruptions raised raw material costs, higher realisations helped offset the impact.

SRF is also developing new active ingredients and intermediate molecules for the agricultural and pharmaceutical industries. Kashyap said, "We are working on various molecules that are beyond our traditional customer segments."

Aroma chemicals maker Privi Speciality reduces its dependence on petroleum-based inputs by sourcing 70% of its raw materials from renewable resources. Chairman Mahesh Babani said, "Global fragrance and consumer goods companies pay a 1-2% premium” for Privi's reliable supply of aroma chemicals over cheaper Chinese alternatives. The company also plans to increase production capacity by nearly 50% to 72,000 tonnes by 2028 by expanding existing products and launching new specialty chemicals.

Not every company is immune to rising costs. Executive Director of Alkyl Amines, Kirat Patel said ammonia prices have doubled from Rs 50 to over Rs 100 per kilogram. He cautioned that the recent improvement in margins came solely from selling older, lower-cost inventory at higher market prices.

The company is also facing excess domestic supply. Its competitor Aarti recently commissioned a new methylamine plant, which Patel called a "mystery" because the Indian market already has excess capacity. Alkyl Amines relies on its ethylamine business and its 200,000-tonne production capacity. However, it’s operating at only 55% capacity utilisation and uses one-third of its output to make downstream chemical products.

The recent rally has rewarded the chemical sector as a whole. Going ahead, companies with pricing power with differentiated products, and resilient supply chains are the ones that will be winners, while those competing in commoditised markets will continue to face margin pressure.

The Baseline

23 Jul 2026, 04:57PM

Beyond assembly: India looks to move up the electronics manufacturing value chain

By Anagh Keremutt

India's first Production-Linked Incentive (PLI) scheme, announced in March 2020, helped transform the country into one of the world's largest electronics manufacturing hubs. Today, 99.2% of mobile phones sold in India are manufactured domestically, and the share of electronics in India's merchandise exports has jumped from 1.7% in FY15 to 11% in FY26.

But only about 24% of the value of an electronic product is currently created within India. The government wants to increase this to 40-45% by encouraging companies to manufacture more components locally instead of just importing and assembling them.

On July 15, the Union Cabinet approved incentives worth nearly Rs 1.9 lakh crore to boost India's semiconductor and electronics manufacturing ecosystem. The package includes Rs 1.3 lakh crore for semiconductors (Semicon 2.0) and Rs 62,500 crore for electronics and mobile phone manufacturing (MPMS).

Unlike the earlier PLI scheme, which encouraged companies to manufacture finished products, the new incentives target the parts that go inside them. The scheme covers semiconductor fabrication, chip packaging (OSAT), printed circuit boards (PCBs), electronic components, manufacturing equipment, research and development, among other areas.

Navkendar Singh, Associate Vice President at IDC, said, "The new scheme marks a shift from assembling more electronics to building deeper manufacturing capabilities through R&D and local value addition."

The government is yet to name any direct beneficiaries. Even so, several electronics manufacturing companies have already begun moving towards backward integration. They’re investing in many of the areas the new scheme is designed to support, from camera modules and displays to PCBs and semiconductor packaging.

In this edition of Chart of the Week, we look at how companies are climbing the electronics value chain by manufacturing more of the components that go into finished products.

From assembly lines to high-value components

Smartphone manufacturing is shifting from just assembly to making more advanced components, which typically carry higher margins. “A small device like a phone requires the industry to pack the power of a data centre into a single device. That requires precision. This industry also drives several other industries,” IT minister Ashwini Vaishnaw said.

Dixon Tech is ramping up production of camera modules and display screens. The company is expanding its camera module capacity by 2.6x, aiming to produce 190 million units over the next 15-18 months. Revenue from this vertical is expected to more than double to Rs 2,500 crore.

It has also entered the mobile display business and is targeting a capacity of up to 55 million units over the next two years. Forecaster expects the company to spend about Rs 1,109 crore on capital expenditure in FY27.

Discussing the company's display expansion, Vice Chair & MD Atul Lall said, "Once we start achieving 80-90% of capacity utilization, the revenue generation is going to be Rs 5,500-6,000 crores with a double-digit margin." He added that the camera and display businesses are expected to improve operating margins by 40-50 basis points as they scale.

Amber Enterprises is aiming to capture 20% of Oppo's smartphone manufacturing volume in India, with a target of producing 15 million smartphones annually by FY29. By taking over Oppo's sub-leased manufacturing facility and leveraging government incentives, the company plans to increase the domestic value added in these phones from the current 10-12% to 35-40% over the next six years.

The company also plans to invest over Rs 4,500 crore in electronics component projects that have been approved for incentives under the Electronics Components Manufacturing Scheme. Executive Chairman, CEO & Whole-time Director Jasbir Singh said, “The electronics division is expected to grow around 40% in FY27,” after segment revenue jumped 49% in FY26.

The government is also trying to reduce manufacturing costs beyond direct subsidies. It waived import duties on 85 capital goods used in lithium-ion cell manufacturing, along with key inputs used for display assemblies and wireless charging modules.

Building India's chip backbone

Printed circuit boards (PCBs) form the backbone of almost every electronic device, connecting components so they can function together. India currently imports Rs 80,000 crore worth of PCBs every year, with domestic manufacturers meeting only about 10% of local demand.

Syrma SGS formed a joint venture with South Korea's Shinhyup Electronics to address this domestic supply gap. It is investing Rs 1,600 crore to build a PCB manufacturing facility, with production expected to begin by March 2027. Syrma's MD J.S. Gujral said the company expects to recover around 50-60% of the investment through government subsidies over time.

Chip packaging (OSAT) prepares semiconductor chips so they can be integrated into electronic devices. CG Power is investing about Rs 7,584 crore in its semiconductor packaging project, expecting to increase packaging capacity from 0.5 million chips a day to roughly 15 million chips per day by the end of 2026. The company is also eligible for Rs 4,900 crore in combined state and central government incentives, covering roughly 65% of the capex.

Kaynes Tech is moving beyond manufacturing products based on customer designs by developing its own intellectual property. The company has expanded into original design manufacturing (ODM), product engineering and IoT solutions. Revenue from these businesses increased from 18% of total revenue in FY25 to 28% in FY26. New product development and other value-added solutions are expected to contribute about 30% of revenue over the coming years. Executive Vice Chair Ramesh Kunhikannan said the company's semiconductor packaging business already has revenue visibility of over Rs 2,500 crore over the next five years.

As companies invest in chip packaging, product design and other parts of the electronics value chain, India's electronics industry is moving into more advanced component manufacturing. If these investments scale as planned, the country could capture a larger share of the value created across the supply chain rather than remaining primarily an assembly hub.