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1. Dixon Technologies:

This consumer electronics maker fell 3.7% last week after CLSA cut its price target by 16% to Rs 15,800. The brokerage said the company’s near-term outlook looks uncertain due to slowing smartphone sales in India and loss of market share by its key customers. CLSA also expects Dixon’s Q3 revenue to remain flat YoY, raising the risk of a guidance cut in FY26.

The company’s share price has fallen 32% over the past year. Adding to the pressure is the government’s decision to extend IT hardware import norms until December 2026, which allows brands such as Acer, Lenovo, HP, and Asus to continue importing products and reduces the push for local manufacturing. Several other brokerages also flagged that Dixon may struggle to meet its guidance in the coming years, with import rules posing a downside risk to their estimates.

Despite near-term challenges, CLSA remains positive on Dixon’s long-term prospects. The brokerage has kept its FY28 earnings estimates unchanged, noting that a recovery is expected over time. It believes margins could improve through backward integration, especially in the smartphone segment, which remains Dixon’s key revenue driver.

The management, in contrast, appears more optimistic. Director and Group CFO Saurabh Gupta said, “Our exports stood at around Rs 1,600–1,700 crore in FY25. This year, we are looking at a figure closer to Rs 7,000–8,000 crore, and we expect strong growth in the following year as well.” He added that exports will continue to grow, both in absolute terms and as a share of revenue.

Gupta also reiterated Dixon’s revenue target of Rs 1 lakh crore by FY28. He said the company is aiming for around Rs 80,000 crore in FY27, and a growth rate of 30–35% should be enough to reach the target. The company missed its revenue estimates slightly in FY25 and FY24, by around 2%.

The stock appears undervalued based on its current and future earnings. Its current price-to-earnings (PE) ratio of 50.1 is well below its 5-year average of 146.9. Based on analyst estimates, its forward PE is 64.5, suggesting potential for further upside.

2. Hindustan Petroleum Corp (HPCL):

This oil & gas stock rose over 6% on December 31 as it reportedly partnered with VinFast’s charging arm, V-GREEN, to expand electric-vehicle charging infrastructure across India. Under the collaboration, V-GREEN will leverage HPCL’s nationwide fuel-station network to deploy EV charging points. 

Falling crude oil prices added to the positive sentiment. Crude has dropped over 20% in the past year and is now trading below $60 a barrel, improving refining economics for oil marketing companies. Analysts expect it to decline further to $50 a barrel in 2026, as the oil glut worsens amid slowing global demand and rising supply. 

This margin tailwind has begun to reflect in earnings. HPCL reported EPS that beat estimates by 28% in Q2, at Rs 18 per share. Forecaster expects earnings to remain strong in the December quarter, projecting a 44% YoY jump in EPS. Higher profitability is also translating into larger shareholder payouts, with dividends expected to more than double this fiscal year.

HPCL is now moving past the peak of its capital-intensive phase. Large projects such as the Visakh refinery upgradation and the Rajasthan refinery–petrochemical complex are nearing completion. As these projects ramp up, more of the company’s capital spend is expected to convert into EBITDA and cash flows. Noting the current debt of Rs 55,808 crore, Kaushal said, “Debt reduction has been a focus for the management team. We guided for a debt-equity ratio of 1.1 for FY26, and we are now confident of taking it below 1 by the end of the year.” 

Motilal Oswal maintains a Buy rating on HPCL with a target price of Rs 590, implying an upside of about 18%. The brokerage prefers HPCL among oil marketing companies due to its higher exposure to the marketing segment, improving dividend outlook as capex tapers, and the expected earnings boost from commissioning of multiple mega-projects over the coming year.

3. Titan Company: 

Thisgems & jewellery stock rose 3.6% last week after ICICI Directreiterated its ‘Buy’ rating with a higher target price of Rs 4,715. The brokerage expects Titan’s revenue and profit to grow at a CAGR of 18% and 23% respectively, over the next three years.

The major driver remains studded jewellery, which now accounts for around 23% of Titan’s jewellery sales. This segment is growing faster than plain gold jewellery. Rising preference for design-led and occasion-based purchases has helped Titan increase the share of studded products, strengthening growth visibility despite volatility in gold prices.

ICICI Direct highlighted Titan’s new brand, ‘beYon’, which offers lab-grown diamonds at 70–80% lower prices than natural ones. These affordable diamonds are attracting a new set of customers, while demand for natural diamonds among affluent buyers remains strong. Diamond jewellery makes up about 15% of India’s jewellery market, while lab-grown diamonds account for less than 1% of total sales. The brokerage expects Titan’s entry to help widen acceptance of lab-grown diamonds and gradually increase the share of studded jewellery.

Titan’sQ2FY26 revenue rose 21% YoY, with most of the growth coming from festive-season demand in its jewellery business. Net profit surged 59%, helped by tighter cost control. Higher sales volumes also improved operating margins, as fixed costs were spread over a larger base.Forecaster estimates revenue to rise about 33% in Q3FY26, with a net profit growth of over 58%.

CEO Ajoy Chawlasaid, “High gold prices are hurting demand at the lower end of the market, as fewer price-sensitive customers are buying. To address this, Titan is pushing gold exchange schemes and lighter, lower-carat designs.” Chawla noted that margins may vary quarter to quarter, but the focus is on EBIT growth over time. He added that future performance will partly depend on gold prices.

4. Zydus Wellness:

Thishealth and nutrition company jumped 7.2% on December 31 after Motilal Oswalinitiated a “buy” call. The brokerage expects Zydus to move from years of slow growth into a stronger phase as the recent acquisitions scale and the core business stabilises. Analysts note that the 2019 acquisition of Heinz India, which was nearly twice Zydus’ size, had previously weighed on profit growth.

Zydus owns popular brands like Sugar Free (sugar substitutes), Glucon-D (glucose powders), Everyuth (skincare), Nutralite (spreads), and Complan (nutritional beverages). But growth from these core products has been seasonal and inconsistent, holding back profits.Buying Naturell adds the RiteBite Max Protein brand to its lineup. This move gives Zydus a foothold in the fast-growing market for protein snacks. This category is less seasonal than its other products, promising more stable revenue and predictable margins.

In August, Zydus went global,buying UK-based Comfort Click for about Rs 2,800 crore. The deal opens doors to the vitamins, minerals, and supplements (VMS) market across the UK, EU, and US, unlocking a new international growth engine.

The VMS market is booming, growing 7–9% annually and is set to hit $50–60 billion by 2030, driven by greater health awareness and the adoption of preventive healthcare. Commenting on the acquisition, CFO Umesh Parikh said, “Whatever acquisition has happened over the past 2 years in the FMCG segment, the likely payback period has always exceeded 8 to 10 years. But here, we are quite optimistic.”

InQ2FY25, revenue rose 31% YoY, yet the company reported a Rs 52.8 crore loss. One-time acquisition fees and higher financing costs caused the loss. Seasonal weakness, monsoon troubles, and GST issues also squeezed margins. However,Trendlyne Forecaster expects its net profit to multiply 4.8 times in Q3.

Success still depends on solid execution. A large share of revenue comes from weather-sensitive categories, making quarterly performance vulnerable to shorter summers and uneven demand. At the same time, volatile input costs and aggressive competition in health drinks and skincare continue to cap margin recovery.

5. NTPC:

This electric utilities stock rose 9.2% over the past week after its board approved a 50:50 joint venture (JV) with EDF Power Solutions India on December 24. The JV will develop pumped storage power plants. Separately, the board also cleared the formation of a wholly owned subsidiary in Mauritius to work on power projects, including floating solar installations.

NTPC continues to scale up capacity. In H1FY26, installed capacity rose 10% YoY to 83.9 gigawatt (GW). The company is accelerating its renewable push through fresh project awards. Last week alone, NTPC placed orders worth Rs 1,704 crore for renewable energy projects, including the appointment of KPI Green Energy to set up a green hydrogen project and a waste-to-energy plant in Greater Noida.

Its renewable verticals have also stepped up ordering activity. NTPC Renewable Energy gave solar EPC orders of 400 MW to Vikran Engineering and 250 MW to Solarworld Energy Solutions. Another unit, NTPC Green Energy, awarded Bondada Engineering a contract to build and maintain a 300 MW solar project.

Outlining the long-term expansion roadmap, Director (Finance) Jaikumar Srinivasan said, “Our current capacity under construction stands at 33 GW. We have revised our capacity addition target to 149 GW from 130 GW by 2032.” He added that this expansion would require an estimated capex of about Rs 7 lakh crore over the period.

Near-term performance remains mixed, despite the aggressive capacity additions. In Q2FY26, revenue stayed flat at Rs 45,262 crore but came in marginally ahead of Forecaster estimates. Power generation was affected by subdued electricity demand due to a milder summer and extended monsoon conditions. 

Analysts at Motilal Oswal are cautious of NTPC’s execution capabilities and retained a ‘Neutral’ call with a target price of Rs 370. The firm likes the company's long-term outlook but worries that project execution will fall short of investor expectations, especially at NTPC Green. They expect annual revenue growth of 7.8% and profit growth of 12.6% over FY26-28.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

Since early 2023, I noticed a lot of people sharing screenshots of their stock market portfolios online, often with double digit gains. There seemed to be lots of genius stock pickers around, many of whom were betting on lesser known midcap and smallcap players.

But in the last three months of 2024, the Nifty fell 8.4%. And in 2025, the market has remained jumpy and volatile. You don't see those posts about portfolio returns all that much anymore.  Gains for Indian investors flatlined - even as oil prices were near five year lows and India's GDP growth was strong, markets didn't move very much. Reliable multibaggers of 2024 like Dixon Tech and Kalyan Jewellers saw negative returns in 2025. 

Nifty's headline gain for 2025 is 10.5%. And while this may seem like a reasonable performance, it hides some sharp divergences. We look more closely at what changed for investors in 2025.   

The economist Ruchir Sharma recently wrote that both stocks and gold have soared in the US stock market, an unusual occurrence (stocks and gold returns don't usually move in sync). This, he argues, happened due to the large amount of stimulus pumped into the economy by the US government post-pandemic. He estimates that around $1.5 trillion of "excess money" is sloshing around, driving asset prices up and fuelling speculation across asset classes.

In India, the major source of money in the stock market in 2025 has come not from a stimulus, but from  monthly SIPs being pumped into domestic mutual funds by retail investors.

From Jan to March 2025, the MF industry lost more SIPs than it added, as SIP cancellation rates were higher than new SIPs. Since April however, SIP inflows kept rising, and hit a record of Rs. 29,529 crore in October 2025.

Indian MFs are now sitting on sky-high cash piles. This institutional money is being invested not in expensive smallcaps, but almost exclusively into safer, better valued largecap stocks. This has caused a significant returns gap between Indian indices, hurting retail traders who invested and saw big returns from smallcaps in 2023 and early 2024.

As a result, even as the headline indices held on to returns, a secret crash has been hiding in the Nifty smallcap index, which has declined 5% over the year. Specific themes like Nifty IT have also suffered, while sectors like banking, auto and metal saw double digit returns.

Smallcap investors may soon run out of patience

If smallcaps continue to bleed in 2026, these retail traders may finally lose patience. The current spine of the Indian stock market, SIP inflows, is clearly holding up much better in returns compared to the "get rich quick" mentality of the smallcap trade. 

As largecaps delivered gains in a volatile market supported by domestic institutions, we are seeing a different set of winners compared to two years ago. And as speculative bets on smallcaps fail to deliver, such individual retail investors may have to look elsewhere.

Two places that are seeing growth are fixed deposits in banks, and riskier mutual funds. FD balances are growing fast, especially in rural areas. Retail investors fatigued by losing money on high risk bets may also be turning to hybrid and multi asset funds, which saw their AUM (assets under management) grow over 24% in the year till date, while the overall equity category grew by 17%.

Holdings in gold ETFs also more than doubled in 2025, suggesting that retail traders are trying to shield themselves from market volatility. 

Overall, the"stock pickers" of the market may have burned their hands a bit in 2025. The reaction to this could be a flight to safety. It may be a while before smallcaps and midcaps become part of the boom again, and for that to happen, the underlying fundamentals would need to change. 

The Nifty 500 rose just 5.5% this year, reflecting uneven earnings growth, valuation concerns, and cautious foreign flows. This seemed like a slow, stagnant year for the stock market, despite strong GDP growth.

The market however, has moved sharply along selective themes. Investors favoured businesses linked to government spending, financial strength, technology, and reforms. As a result, some thematic indices saw strong gains.

Money poured into public sector banks, defence manufacturers, and metal companies building infrastructure. New-age themes like electric mobility and consumption also saw a boost.

Nikhil Khandelwal, MD of Systematix Group, said, “Indian equities are entering 2026 with market performance increasingly driven by earnings growth rather than liquidity. This makes sector selection and company fundamentals far more important than broad index exposure.”

In this edition of Chart of the Week, we break down how specific themes outperformed the broader market and why 2025 became a year where "what" you owned mattered far more than simply "being in" the market.

Financials lead 2025, thanks to structural strength

In 2025, the Nifty PSU Bank index rose over 28.3% as public sector banks strengthened their balance sheets and reduced non-performing assets (NPAs).

NPAs of PSU banks dropped sharply from over 9% in FY21 to around 2.6% by March 2025. Capital levels improved and returns steadily increased. Large banks like State Bank of India now offer good earnings visibility, while mid-sized banks are growing faster. This has built confidence across the sector.

This trend was also visible in the Financial Services 25/50 index, which rose 18% during the year. The Financial Services 25/50 index makes sure no single company dominates. No stock can be more than 25% of the index, and the top two can’t be more than 50%, so it shows the sector fairly.

Alongside lenders, financial market infrastructure companies also delivered steady gains. The Nifty Capital Markets index rose about 14.5%, mainly through rising participation. NSE trading accounts crossed 24 crore in November 2025, marking an annual increase of 20%. Individual investors accounted for about 18.8% of NSE’s total market capitalization in Q2FY26. This represents a 22-year peak in retail investor ownership.

Sudeep Shah of SBI Securities said, "This rally has been underpinned by a surge in equity market participation, record-breaking trading volumes, and a vibrant IPO pipeline." He adds, "As more retail investors joined the markets and F&O activity reached record levels, exchanges, brokers, and investment platforms earned more from transaction fees, margin loans, and other services."

PSU banks and capital market firms formed two sides of the same engine, one supplying credit to the economy, the other channeling savings into financial assets. This combination made financials a core pillar of thematic outperformance in 2025.

Defence and metals ride higher domestic demand

Another driver of returns in 2025 was India’s push toward self-reliance and domestic manufacturing. The Nifty India Defence index rose 15.7% in 2025 as defence spending moved from announcements to actual orders, backed by a record Rs 6.8 lakh crore budget.

Stock gains were led by Garden Reach Shipbuilders, MTAR Technologies and Bharat Electronics which rose 42.4%, 42% and 34.7%, respectively. Their growth was backed by a combined order book value of over Rs 75,700 crore.

The Nifty Commodities index gained 14.8% in 2025, driven by a rising cycle in global raw material prices. Unlike previous, more cyclical years, 2025 saw a steady climb as global demand for industrial inputs outpaced supply. 

The Nifty Metals index led the growth within commodities with a 26.2% surge, reaching record highs in late December. The primary driver was a global copper shortage that pushed prices to an all-time high of $12,960 per ton. 

Hindustan Copper more than doubled in value with an annual gain of 108%, while National Aluminium and Hindalco rose 48% and 43%, respectively, due to their focus on copper and aluminium for the electric vehicle transition. 

Discretionary spending jumps as consumers favour premium brands

Beyond finance and infrastructure, 2025 also marked a visible change in how Indians move and spend.

The Nifty EV & New Age Automotive index rose about 22.5% in 2025, driven by rapid charging infrastructure expansion and falling battery costs. Policy support and lower ownership expenses boosted the entire value chain, from component manufacturers to vehicle platforms.

Performance was led by Ashok Leyland in the electric commercial vehicles segment, which rose 62%, Maruti Suzuki which rose sharply within passenger cars, and TVS Motor which stood as the top gainer in the electric two-wheeler segment. Eicher Motors also rose sharply as it scaled EV operations for its first electric Royal Enfield model. 

The Nifty India New Age Consumption index gained around 17.9%, as urban spending shifted from basic staples to "aspirational" lifestyle brands.

Select turnarounds drove the rally. Nykaa jumped 65% as profits tripled in Q2FY26, helped by tighter costs and growth in its core beauty business. Telecom also staged a recovery, with Vodafone Idea rising 61% after the government converted a large part of its debt into equity, easing bankruptcy fears and enabling a fresh 5G rollout.

A Moneycontrol report noted, "Household spending on non-essentials has increased, as higher incomes drive consumers toward premium and discretionary purchases."

Together, modern mobility and new-age consumption reflected bigger structural changes in the economy. Investors backed companies aligned with these shifts, reinforcing the market’s preference for selective themes.

1. Fortis Healthcare:

Thishealthcare company jumped 5.4% in two trading sessions after announcing plans toacquire People Tree Hospital in Bengaluru. Fortis Healthcare is buying the 125-bed multi-speciality hospital for Rs 430 crore through its subsidiary, International Hospital.

Fortis plans to inject an additional Rs 410 crore over three years to expand the hospital. The deal includes an adjacent 0.8-acre land parcel, enabling the hospital to scale from 125 to over 300 beds. MD & CEO Ashutosh Raghuvanshisaid, “The deal complements the company’s cluster-focused growth strategy in Bengaluru with an overall potential to scale up to over 1,500 beds across seven facilities over the next three years.”

InQ2FY26, revenue climbed 17.3% YoY, while net profit surged 82.4%, powered by its hospital business. Hospital revenue grew 19.3%, fueled by higher bed occupancy, and now makes up 85% of total revenue. Average revenue per bed also improved, thanks to a better speciality mix and strong oncology performance.

Looking ahead, Fortis’s expansion strategy focuses on adding beds within its existing strongholds. After adding 550 beds in H1FY26, the companytargets another 400–500 beds in FY26 and 300–400 more in FY27, through existing facility upgrades. Key projects include capacity additions in Gurugram, Noida, and Greater Noida, with a new hospital planned for Lucknow.

The move earned a "Buy"upgrade from JM Financial, which set a target price of Rs 1,093. The brokerage highlights the hospital's location in a supply-strapped area of North-West Bengaluru, perfectly positioned to capture rising demand. Analysts forecast the hospital's revenue will nearly double to Rs 130 crore by FY27 from Rs 75 crore in FY25. They note that with a second tower operational, its contribution could reach Rs 600 crore and achieve healthy margins by FY32. For Fortis overall, revenue and EBITDA are projected to compound annually at 17% and 26% respectively, through FY28.

2. Phoenix Mills:

Thisrealty stock gained 3% last week after ICICI Directreiterated its ‘Buy’ rating with a higher target price of Rs 2,210, implying an upside of 19%. The brokerage expects demand at Phoenix Mills’ malls to remain firm during the festive and holiday period. Mall spending is growing at close to 20% a year, supported by higher footfalls. 

The demand trend is supported by traction across major retail categories such as entertainment, fashion, and jewellery. A gradual shift toward premium brands has improved store performance and overall spending quality. Based on current trends, ICICI Direct expects the company to achieve its double-digit growth guidance for the ongoing financial year. This stable operating performance provides a base for long-term expansion.

Phoenix Mills plans to scale up its portfolio across retail, offices, and hotels over the coming years. New developments and expansion are expected to drive growth. The company’s balance sheet remains strong, supported by healthy cash flow and low debt. Lease renewals across properties also offer scope for higher rents without significant additional investment.

Recent financials underline this strength. InQ2FY26, revenue rose 22% YoY to Rs 1,115 crore, driven by a recovery in housing sales. Net profit jumped 39%, aided by new mall ramp-ups and tighter cost control in hotels. Looking ahead, Forecaster estimates revenue to rise about 10% in Q3FY26, with a net profit growth of over 40%.

Management sounds upbeat. CEO Varun Parwalsaid the company “plans to add 1–2 million square feet of retail space” each year, while retail head Rashmi Sen pointed to a stronger focus on experiential food and beverage offerings. CFO Kailash Gupta noted that the “average cost of debt has been cut by nearly 10%”, improving the company’s ability to fund growth while keeping finances stable.

3. Aadhar Housing Finance:

This housing finance company rose 1.3% on December 24 after CEO Rishi Anand said AUM is set to grow 20–22% this year, supported by government stimulus and demand from individuals buying homes to live in, rather than speculative purchases by investors focused on resale or rental. He added that H2 is shaping up better than H1, with momentum improving as the year progresses.

The company sees disbursement growth of over 20% in Q3. Asset quality remains stable, with gross NPAs guided at around 1.1% for FY26, improving from about 1.4% in H1. Management also said recent rate cuts will be passed on to customers by the end of the quarter, alongside a gradual easing in the cost of funds.

Anand said, “We see enough demand and balance sheet strength to sustain 20–22% growth over the next three years, which should help us double our AUM in about three and a half years.” 

Separately, the Competition Commission of India (CCI) on November 7 approved Blackstone’s plan to acquire up to 80.2% stake in Aadhar Housing Finance. Analysts say the move could improve access to capital, strengthen governance, and increase competition as global investors step up exposure to Indian housing finance.

Trendlyne’s Forecaster expects Aadhar Housing Finance’s net profit to rise 19.6% to Rs 1,091 crore in FY26, with revenue growing 31.2%. The stock appears in a screener of companies with expensive valuations, as its price-to-earnings (PE) ratio is above the industry average.

ICICI Direct has a ‘Buy’ rating on Aadhar Housing Finance with a target price of Rs 600. The brokerage highlights the company’s stable performance and disciplined lending, and expects the company to deliver 20% annual growth despite industry challenges.

4. Granules India:

The stock of this pharmaceutical company rose by over 6% in the past week after its board approved a massive fundraising plan. The company aims to raise up to Rs 1,462.5 crore through 2.5 crore convertible warrants priced at Rs 585 each, alongside an additional Rs 300 crore via the issue of 51.3 lakh equity shares to non-promoter investors.

Adding to the momentum, the company received tentative USFDA approval on December 22 for its Amphetamine tablets, which target attention-deficit hyperactivity disorder (ADHD), a market valued at $172 million. CMD Krishna Prasad Chigurupati noted that this move “strengthens Granules’ US generics portfolio” and underscores their commitment to “complex dosage forms and value-driven healthcare solutions.”

The company's financial health showed a significant turnaround in Q2, posting a net profit of Rs 120.6 crore compared to a loss of Rs 41.4 crore in the same period last year. This recovery was fueled by strong performance in North America and 7% sequential growth in the formulations business. 

Trendlyne’s Forecaster projects its net profit to grow by 7.4% in Q3FY26 as the company continues to invest in R&D and its CDMO segment. The stock appears in a screener of companies that have shown relative outperformance as compared to the industry over the past month.

Management confirmed that its CDMO platform, which it established through its 2025 acquisition of Senn Chemicals AG, is now fully operational, supported by R&D integration with IIT Hyderabad. The platform is expected to hit profitability by Q4FY26. It also expects 1-2 approvals in controlled substance formulations within 2-3 years.

ICICI Direct has maintained a ‘Buy’ rating on the stock with a target price of Rs 660. The brokerage highlighted the acquisition of Senn Chemicals AG, which has opened new revenue streams in peptide development, though it cautioned that pricing pressures in the US and other regulated markets remain a potential risk.

5. GE Vernova T&D India (GE T&D): 

This industrial machinery firm climbed 7.4% over the past week after securing a 2,500-megawatt (MW) power transmission order from AESL Projects. Power Grid Corporation of India estimates the project cost at about Rs 19,000 crore. Under the contract, GE T&D will set up a terminal station to transmit power from Khavda to South Olpad.

Earlier, on December 17, the company also won a maintenance order from Power Grid to refurbish the 2*500 MW transmission lines at Chandrapur, strengthening its position in high-voltage transmission upgrades. 

Commenting on opportunities in transmission & distribution, MD & CEO Sandeep Zanzaria said, “The government plans to add up to 136 GW of hydro, pumped storage and conventional capacity by 2035, and nearly 100 GW of nuclear capacity by 2047.” He noted that every new power plant needs new transmission lines, which creates steady demand for the industry.

To capitalise on this opportunity, GE T&D plans a Rs 800 crore capex over the next three years. This investment will go towards expanding manufacturing capacity at its Vadodara, Padappai, and Hosur plants to meet rising demand from home and abroad.

In Q2FY26, the company reported strong operational performance. Revenue rose 40% YoY on improved execution across domestic and export orders, while net profit surged 107%. The sharp profit growth reflected a richer product mix and lower employee costs. Both revenue and profit beat Forecaster estimates by a wide margin.

Yes Securities initiated coverage on GE T&D with an ‘Add’ rating and a target price of Rs 3,200. The brokerage highlights Europe—now contributing about 35% of revenue—as a key driver of export growth, noting that local equipment suppliers are operating at near-full capacity. It expects transformer capacity additions to remain elevated through FY29. The analysts project revenue and net profit CAGRs of 30% and 39% over FY26-28.

Trendlyne's analysts identify stocks that are seeing interesting price movements, analyst calls, or new developments. These are not buy recommendations.

The Nifty 50 closed 2025 as one of the most unpredictable years in recent history. What began with optimism around steady growth turned over the months into a stop-start market, that struggled to find direction. By year-end, India lagged global peers, with the index delivering a modest 10.1% return.

That number doesn’t provide the full picture. There were long stretches this year where the market went nowhere, interrupted by sudden, sharp swings that tested investor patience. Unlike the smoother rallies of the past two years, 2025 felt like a constant tug-of-war between hope and fear.

Market stress was visible across earnings, valuations, and sentiment. Rajiv Batra of JPMorgan summed it up: “Indian equities were under pressure due to weak earnings, soft consumption, high valuations, trade headwinds and a weaker rupee,” noting that “policymakers are now clearly focused on reviving domestic growth.”

In this edition of Chart of the Week, we track how policy actions, global trade shocks, currency pressure, and earnings trends shaped the Nifty’s volatile journey through 2025—and why the year looks like a reset before a potential recovery.

An odd marriage: A resilient economy, a hesitant market

One of the biggest contradictions of 2025 was the gap between the economy and the stock market. While equities struggled, the broader economy held up better than expected. India’s services sector, which now contributes about 55% of total economic activity, played a stabilising role. Even as global trade slowed and manufacturing exports came under pressure, demand for services continued to grow.

The stock market, however, focused more on what could go wrong than right, given already high valuations. In H1CY25, analysts cut Nifty 50 EPS forecasts due to weak urban spending, banks seeing slower growth due to a high base, and soft global IT demand.

Valuations added another challenge. Stocks were not cheap enough to attract aggressive buying, but not expensive enough to justify extreme optimism. The result was a market stuck between strong long-term fundamentals and uncomfortable short-term realities.

RBI rate cuts: support came, but slowly

Policy support became the market’s main anchor in 2025, especially as global conditions worsened. The Reserve Bank of India took a clear pro-growth stance, cutting interest rates aggressively to support liquidity and confidence. Over the year, the RBI reduced the repo rate by a cumulative 125 basis points, taking it from 6.5% to 5.25% by December.

The first 25 bps cut in February, the RBI’s first rate reduction in five years, was met with caution. Alongside the rate cut, the central bank also lowered its GDP growth forecast by 20 bps to 6.4%, reinforcing concerns around slowing momentum. As investors focused on tariff-related risks and weaker growth signals, the Nifty slipped instead of rallying.

A second 25 bps cut in April came amid rising trade tensions, leading to an initial dip before a modest recovery led by banks and real estate stocks. June then marked a turning point. A larger 50 bps cut, along with a clear shift in the RBI’s stance, lifted sentiment. Banking stocks surged to record highs as expectations around credit growth and consumption improved.

By the time the final 25 bps cut arrived in December, the move was largely priced in. The Nifty barely reacted, ending the year in a cautious phase. Meanwhile, RBI Governor Sanjay Malhotra said India is in a rare “goldilocks” phase, with steady growth and controlled inflation. He added that rates are likely to stay low for longer, and any progress in trade talks—especially with the US—could lift growth by around half a percentage point.

Global trade shocks tested confidence, and exporters adapted

Global events remained a constant source of stress for Indian markets in 2025, with trade tensions—especially with the US—frequently unsettling investor confidence. In early April, the US imposed 25% tariffs on Indian goods, triggering a sharp fall in the Nifty. Export-heavy sectors were hit the hardest as investors quickly priced in weaker overseas demand.

The situation worsened in late August when tariffs were raised to 50% after India continued importing Russian oil. The market reacted sharply, with textiles, gems and jewellery stocks seeing heavy selling. These repeated trade shocks have deepened concerns about India’s export outlook and added to the market’s overall nervousness.

Currency pressure amplified the impact. The Indian Rupee weakened past Rs 90 to the dollar, making it one of the weakest-performing Asian currencies during this period. While a softer rupee can help exporters, it raises costs for energy imports and foreign debt repayments. Dilip Parmar of HDFC Securities noted that the rupee significantly underperformed regional peers, further weighing on sentiment.

Yet exporters did not stand still. Companies began shifting focus to alternative markets, and the data reflected this adjustment. Exports to China jumped 31% YoY in September–October, while shipments to Saudi Arabia and parts of Europe also increased. These moves helped cushion some of the damage from US tariffs.

By December, sentiment improved as talk of a potential US–India trade deal gained traction. The possibility of easing tariffs in exchange for higher Indian purchases of US energy helped calm markets and offered hope that the worst of the trade pressure may be nearing an end.

Tax relief gives consumption a boost

Alongside monetary support, fiscal measures played an important role. The Union Budget 2025 raised the personal income tax exemption limit to Rs 12 lakh, putting more money directly into household hands. While broader market reaction was muted on budget day, consumer-focused stocks responded positively in the weeks that followed.

JP Morgan estimated that the tax relief could add around 0.6% to GDP over time, gradually lifting consumption. The impact became more visible after the rollout of GST 2.0 in September. The tax structure was simplified into two main slabs—5% and 18%—replacing a complex system that businesses had long criticised.

The immediate effect was seen in consumer durables. Products like air conditioners and large televisions moved from the 28% bracket to the 18% bracket, leading to price cuts of 8–9%. Retailers reported a noticeable jump in footfalls and sales. To offset revenue loss, the government retained a steep 40% tax on luxury items such as premium SUVs.

Earnings bring a turning point

After months of uncertainty, October saw a change in the market's tone. The Nifty rose 4.5%, its strongest monthly gain of 2025, not due to policy announcements, but because earnings were better than feared. The steady stream of downgrades slowed, suggesting profits may have finally bottomed out.

Banks and auto companies led the recovery, reporting stable demand and improved cost control. The results were not spectacular, but they were “less bad” than expected—and that was enough. Motilal Oswal and other brokerages noted that the worst phase of earnings pressure appeared to be behind.

The October rally did not erase the damage of the year, but it shifted the investor mindset. As 2025 ended, the focus moved away from constant downside risks toward the possibility of a gradual recovery in 2026, making the year look less like a downturn and more like an overdue reset.