Trendlyne Blog: The Baseline, Latest on stock market and finance in India and the world.

12 Feb 2026, 05:00PM

After a tough 2025, the Indian rupee may be finding its balance

For much of 2025, the Indian rupee weakened, despite a healthy economy. India has seen GDP growth that’s among the highest in the world, inflation has eased, and expectations are upbeat. RBI Governor Sanjay Malhotra said that the economy is in Goldilocks mode, with most indicators looking great. But uncertainty was a party spoiler, as it increased dollar demand and put pressure on the rupee. The RBI under the new governor also became less interventionist in defending the rupee, and focused mainly on limiting volatility.

By end-2025, the rupee had slipped past Rs 91 per dollar and hovered near record lows, making it one of Asia’s weakest currencies. US rate signals, geopolitical risks, and cautious investor sentiment triggered fresh selling each time.

It’s early, but 2026 looks different. The US–India trade deal cut tariffs on Indian goods, lifting a key drag on the rupee. India’s $500 billion import pledge to the US sets a clear five-year trade path towards more openness and reduces uncertainty. Foreign investors have returned, and the rupee strengthened toward the 90 range.

Following the India–US trade agreement, Bank of America lifted its near-term rupee forecast by about 2% to around Rs 89 per dollar. “Rupee was under pressure due to the outflows in the last month, and I think that should stop,” said Vikas Jain, head of India fixed income, currencies and commodities trading at Bank of America.

Currently, the rupee is down 4.3% over the past year and continues to lag most Asian peers.In this edition of Chart of the Week, we see the structural forces behind the rupee’s slide and the policy shift under new central bank leadership.

The rupee stayed under pressure in 2025, but 2026 looks different

The rupee’s weakness in 2025 was largely from global factors rather than domestic fundamentals. India’s growth outlook remained intact, but external conditions worked against the currency through most of the year.

Tariffs and the souring of the Modi-Trump relationship didn’t help In 2025, tariffs on Indian goods were raised to 50% in response to continued Russian oil purchases. This reduced export competitiveness and weakened visibility on future export orders and dollar inflows. Foreign investment outflows added to the pressure. As US interest rates remained higher for longer, global investors reduced exposure to emerging markets. India saw $18.9 billion of foreign portfolio outflows in 2025, increasing dollar demand and keeping the rupee under strain.

Asia added another layer of stress. Japan’s shift toward tighter monetary policy led to an unwinding of the yen carry trade. Investors who had borrowed cheaply in yen and invested in higher-yielding markets, including India, began withdrawing funds. This hit the rupee at a time when it was already under pressure.

The trade deficit widened as high crude oil prices and gold imports pushed up India’s import bill. Services exports and remittances continued to provide support, but they could not fully offset the goods trade gap. Finance Minister Nirmala Sitharaman confirmed that currency movements were driven primarily by global uncertainty and trade disruptions rather than domestic weakness.

RBI keeps a light touch, intervening only when needed

One of the most important changes in 2025 has come from the Reserve Bank of India. Under Governor Sanjay Malhotra, the central bank has shifted from defending exchange-rate levels to a looser approach: managing volatility.

In earlier episodes of rupee stress, the RBI intervened actively to slow depreciation. While this offered short-term relief, it also encouraged markets to test perceived comfort zones, increasing the long-term cost of intervention.

The current approach is different. The RBI has made it clear that it is not targeting a specific exchange rate for the rupee. Intervention is reserved for disorderly movements, not routine weakness. As Governor Malhotra said, “We allow the markets to determine prices and don’t target any level. Intervention is only to curb abnormal volatility”

With no clear level to defend, traders are less willing to take aggressive one-way positions. This approach is supported by strong reserves. India’s foreign exchange reserves of $723.8 billion cover more than eleven months of imports. Even as RBI gold purchases slowed to an eight-year low, a $137 billion gold-heavy buffer backed by record holdings of 880.2 tonnes gives the RBI greater capacity to manage shocks and supply dollars during periods of stress.

Higher gold valuations have given the RBI greater flexibility to absorb currency stress without heavy dollar sales. The message from the February 2026 policy meeting was consistent: stability matters more than levels. While this stance has not strengthened the rupee outright, it has reduced panic and helped anchor expectations after a volatile year.

Trade deals have changed the tone in 2026

If RBI policy helped steady the rupee, trade developments helped change market perception.

The India–US trade framework has marked a clear turning point. Tariffs that had risen to approximately 50% were reduced to approximately 18%, thereby restoring export competitiveness. More importantly, the deal improved predictability, giving exporters clearer visibility on pricing, volumes, and market access.

Markets responded quickly. After spending months near its weakest levels, the rupee recovered toward Rs 90 per dollar following the announcement. The move was driven less by speculative flows and more by expectations of trade-linked dollar inflows.

Progress on the India–EU free trade agreement added further support. While benefits will emerge gradually, the agreement will improve access to a broad range of Indian goods. For currency markets, this matters because trade-linked inflows tend to be more stable than short-term capital flows.

As a result, the rupee traded in a narrower range through early 2026. The improvement was modest, but the driver had changed. Trade, rather than sentiment, has begun setting the tone.

What comes next: stability over strength

At its February 6 meeting, the RBI unanimously held rates at 5.25% with a neutral stance and raised its FY26 GDP growth forecast to 7.4% while upgrading early FY27 estimates. Strong growth attracts foreign direct investment, which is more stable than portfolio flows and helps fund the trade gap. This keeps the rupee steady in 2026, balanced rather than bullish.

At the same time, execution risks remain. Trade agreements must translate into actual export volumes. Any slowdown in global demand, delays in implementation, or logistical constraints could test current stability. Fiscal discipline will also remain a focus, with markets monitoring tax collections and spending trends.

Several global banks expect the RBI to remain comfortable with gradual depreciation over time, especially if it supports export competitiveness. Forecasts pointing to Rs 91–92 by late 2026 reflect policy tolerance rather than renewed stress. As UBS noted, “Short-term support for the rupee is limited because the central bank will use strength to build reserves, keeping some pressure on the currency.”

After a difficult 2025, the currency is no longer reacting blindly to every global shock. The shift from defending levels to managing stability has changed market behaviour. Whether this holds will depend on trade execution and policy.

The Baseline

10 Feb 2026

Five stocks to buy from analysts this week - February 10, 2026

By Ruchir Sankhla

1. Minda Corporation:

Axis Direct maintains its ‘Buy’ rating on this auto parts manufacturer, with a target price of Rs 710, an upside of 20.9%. The company delivered strong Q3FY26 results, where revenue jumped 24.6% YoY, and profit grew 32.3%. This growth came from increased sales of premium products and from larger, higher-value orders. India remained its primary market, with revenue growing 25.3% and accounting for 89% of total revenue.

Analyst Sanchit Karekar highlights Minda’s expansion into high-margin product segments. These include EV electrical wiring, digital dashboards, and smart key systems. Minda’s total order book now exceeds Rs 7,000 crore, indicating strong future visibility.

Management announced the company's entry into the premium car accessories market, securing its first sunroof order worth about Rs 350 crore through a joint venture with CMF. Minda also won a significant order of over Rs 1,000 crore to supply key switches to a leading two-wheeler manufacturer.

During the quarter, Minda filed four new patents, bringing its total patent filings to more than 320. Karekar expects Minda’s revenue to grow 15–17% annually over the next three years. Its focus on premium products and electric-vehicle parts will keep profit margins strong. These recent order wins clearly show the company’s shift toward higher-value products and an increased presence in passenger vehicles.

2. Emcure Pharmaceuticals:

BOB Capital Markets maintains its ‘Buy’ rating on this pharma company, with a target price of Rs 1,787, an upside of 18.3%. The company posted a strong Q3FY26 performance, helped by a weakening Indian rupee, which drove net profit up 50% to Rs 230.5 crore. Steady growth in both the Indian and overseas markets enabled a 20% increase in revenue to Rs 2,365 crore.

Management states that Europe drives most growth, thanks to higher sales of specialised injectable medicines in countries like Italy and the UK. New product launches, including Tenecteplase for heart attacks, supported strong sales in other international markets.

Analyst Foram Parekh points out that the current quarter does not fully reflect the impact of its newly launched GLP-1 weight-loss drug, Poviztra. Management expects competition to increase over time, but remains confident in its execution. Parekh expects the domestic business to grow at a 14% CAGR during FY26–28, with sales up 15%, EBITDA rising 19%, and net profit increasing 25%. Strong overseas growth, a healthy product pipeline, and improving margins is expected to drive this performance.

3. Solar Industries India:

ICICI Direct reiterates its ‘Buy’ call on this explosives manufacturer, setting a target price of Rs 16,700 per share, a 24.4% upside. Solar Industries reported healthy growth in Q3FY26 results. Revenue rose 29.8% YoY, and net profit soared 41.7%, driven by robust order inflows, healthy execution, and portfolio expansion.

Analysts Vijay Goel and Kush Bhandari remain positive on the company's medium-term outlook, led by a recovery in explosives and growth in the defence and international segments. Management expects to achieve a revenue CAGR of over 20% in the next three-five years. Their focus on ramping up defence execution across domestic and international markets, along with expansion into new technologies like drones, advanced ammunition, and robotics, will support the growth outlook.

Goel and Bhandari highlight revenue growth visibility in the defence segment, with an order backlog of Rs 21,200 crore and a healthy pipeline. Explosives volumes remained muted during the year due to heavy monsoons and subdued coal demand. However, management expects a rebound as mining, power, housing, and infrastructure activities pick up.

4. City Union Bank:

IDBI Capital retains its ‘Buy’ call on this private bank and raises its target price to Rs 325 per share, representing a 13.2% upside. City Union Bank reported robust Q3FY26 results. Revenue jumped 17.2% YoY, and net profit increased 16.1%. Growth in advances & deposits, benefits from the reduction in cash reserve ratio, and a shift to fixed-rate gold loans drove this performance.

Analysts Sweta Padhi and Smit Shah believe the bank’s medium-term outlook remains positive, supported by revenue growth visibility, deposit repricing and improving asset quality. Management raised its FY26 advances and deposits guidance to mid-high teens from low-mid teens. Strong demand in MSME, gold, and secured retail loans will boost advances, while a focus on granular retail deposits and CASA will fuel deposits.

Padhi and Shah note that the bank’s deposits and loans rose at the same rate, keeping the credit-to-deposit ratio at 85-86%. Granular retail deposits and stable CASA drove deposit growth, aligning it with advances and improving the bank's funding visibility. They expect the bank to deliver NII and net profit CAGRs of about 15% through FY28.

5. Indus Towers:

Geojit BNP Paribas reiterates a ‘Buy’ call on this telecom tower company, with a target price of Rs 550, an upside of 19.8%. The company’s Q3FY26 revenue rose 8% YoY to Rs 8,146 crore. This increase came from adding more towers and consistent demand from telecom operators. The number of shared connections on towers grew 9%, while average users per tower remained stable, showing steady demand.

Management views the government’s relief on adjusted gross revenue dues for its key telecom customer, Vodafone Idea, as a major positive. This move will likely improve the customer’s cash position, reduce payment delays, and support future demand for tower space.

Analyst Sheen G notes Indus Towers’ expansion into Africa. The company also actively works to reduce costs, improve digital systems, and build towers based on customer demand. The analyst expects revenue and net profit to grow at a CAGR of 6.8% and 8.9%, respectively, from FY26–27.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

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The Baseline

06 Feb 2026

Five Interesting Stocks Today - February 6, 2026

By Trendlyne Analysis

1. Syrma SGS Technology:

This electrical products company rose 20% in the past week, driven by Union Budget 2026 support, the India–US trade deal, strong Q3 results, and multiple brokerage target upgrades.

In Budget 2026, Finance Minister Nirmala Sitharaman sharply raised the allocation for electronics component manufacturing to Rs 40,000 crore, in line with market expectations. She also announced ISM 2.0, which focuses on local manufacturing of equipment and improving supply chains. These steps support the company’s backward integration plans.

Managing Director JS Gujral said in the earnings call, “The phase-1 of the printed circuit board (PCB) manufacturing project, with a capex of Rs 400 crore, is expected to be completed by December 2026. The total investment could reach around Rs 1,500 crore by FY30, with meaningful revenue contribution starting from FY28.”

The India–US trade deal adds another positive. Analysts note that the government’s goal of $500 billion in bilateral trade could result in over $100 billion of trade for the electronics and semiconductor sector, improving export opportunities. The company currently gets around a quarter of its revenue from exports.

In Q3, Syrma’s revenue rose 45% YoY, driven by growth across all segments. EBITDA margins expanded by 350 bps, helped by lower employee and other expenses. During the quarter, Syrma completed the acquisition of a majority stake in defence firm Elcome Integrated for Rs 240 crore. Elcome is expected to generate up to Rs 300 crore in revenue in FY26, with 10–15% growth projected for FY27.

Looking ahead, Gujral said, “We expect to deliver 30% growth in both revenue and EBITDA in FY27, driven by higher exports and increased contribution from industrial and healthcare segments.”

Motilal Oswal has set a target price of Rs 1,000 for Syrma, citing improvement in business mix and operating leverage. The brokerage remains positive due to its focus on high-margin businesses, entry into PCB manufacturing, and expansion into new areas such as defence and solar inverters.

2. National Aluminium:

This metal & mining stock fell 17.3% last week as a strong US dollar weighed on metal prices. When the dollar rises, metals become more expensive for global buyers, and demand falls. The decline reflects global currency pressure and profit-taking.

In Q3FY26, net profit stayed flat at Rs 1,601 crore. Revenue rose 2% YoY to Rs 4,731 crore, driven by a surge in alumina sales volumes. This volume growth successfully offset a significant drop in global market prices.

The company is shifting its focus to production volumes because it expects alumina prices to stay weak through FY27. Chairman and Managing Director Brijendra Pratap Singh noted that the new 1 million tonne (MTPA) refinery is scheduled to start in June 2026. “This expansion will be supported by the new Pottangi Bauxite Mine, which is expected to open in May 2026 to ensure a supply of raw materials,” he said.

CFO Abhay Kumar Behuria said, “The company is on track to meet 55% of its power needs through captive coal mines by FY26 (up from 40% currently), lowering fuel costs.” This shift reduces exposure to volatile coal prices. He added that large spending on new smelting plants has been delayed until after FY28 to fund current projects using internal earnings rather than taking on new debt.

Axis Direct downgraded the stock to ‘Hold’ while raising the target price to Rs 390. The brokerage noted that while production is strong, the stock’s valuation is now "stretched," trading at nearly double its historical average. This suggests the current price already accounts for much of the expected growth, leaving little room for error in the company's execution.

3. ACME Solar Holdings:

Thisrenewable energy company gained 5.3% on January 30 after posting strongQ3FY26 results. Revenue rose 42.3% YoY to Rs 496.8 crore, beatingForecaster estimates, driven by an increase in power generation. Higher Capacity Utilisation Factors (CUF) and new capacity additions helped improve output.

A key highlight is ACME’s majorpush into Battery Energy Storage Systems (BESS). The company doubled its installation target to approximately 2 gigawatt-hour (GWh) by Q4FY26. Instead of building new sites, it’s adding batteries to existing solar plants, saving nearly Rs 20 lakh per megawatt (MW) and avoiding construction delays. These batteries store electricity when prices are low and sell it when prices are high, generating quick cash flow before long-term contracts kick in.

ACME currently generates 7,770 MW of power and stores 16 GWh of energy in batteries, and aims to reach 10 GW and 20 GWh by 2030. Managementnoted that India's energy demand grew 7% in December, a trend expected to fuel more power contracts.

The company is also shifting toward round-the-clock solar power, with its 130 MWproject for India’s railways marking a push for more reliable green energy.

Supply chain risks from China’s removal of VAT export rebates have been largely solved. ACME has alreadysecured over half of its solar modules and nearly all its battery requirements, keeping costs on budget. This proactive buying also safeguards its plan to add 1.5 GW of capacity in FY27.

On scaling operations, Chairman and MD Manoj Kumar Upadhyaysaid, “One of the biggest challenges in the industry is how to install 5–6 GW of modules manually per year. This year, we are moving to robotic installation to scale efficiently.”

Post results, Motilal Oswalmaintains a ‘Buy’ rating with a potential upside of 57.7%. The brokerage cited on-track projects, bigger battery goals, guaranteed revenue from power agreements, and secured resources as clear signs of strong growth ahead.

4. Gland Pharma:

This pharmaceutical manufacturer’s stock price climbed 6.5% on January 29 after reporting strong Q3FY26 performance. Revenue jumped 29.1% YoY, while net profit rose 27.7%. Higher sales volumes in the base business, an operational turnaround at its European subsidiary Cenexi, and favourable currency moves drove this growth. The company also beat Forecaster estimates for both revenue and profit.

Gland’s core business improved as sales volumes grew across the US, India, and other regulated markets. The US market saw growth for the third straight quarter. New product launches, higher demand for base drugs, and a weaker rupee against the dollar helped boost these numbers.

Cenexi, the company’s European arm, recorded the highest growth and turned EBITDA positive for the first time. Several factors boosted revenue and margins, including addressing capacity issues, optimising the workforce, and raising contract prices to keep pace with inflation. Better integration with the parent company also helped.

Management is confident it will achieve 12–13% revenue growth in FY26 and is targeting a 15% CAGR over the next five years. They expect capacity additions, new contract manufacturing deals and recent launches in Europe to drive this growth.

Discussing capacity expansion, Executive Chairman Srinivas Sadu said, “We plan to invest about Rs 2,000 crore in capex over the next five years, with Rs 400 crore towards brownfield expansions in FY27.” He added that the investment will fund new production lines, contract manufacturing deals, and warehouse capacity expansion.

Following the results, Axis Direct reiterated its ‘Buy’ rating with a target price of Rs 2,170, implying a 17.2% upside. The brokerage highlights the company’s focus on complex injectables and the push into diabetes and obesity drugs as key positives. The turnaround at Cenexi also provides visibility into future top-line and profitability growth. It expects the firm to deliver annual revenue growth of 12.3% and profit growth of 24.9% through FY28.

5. R R Kabel:

The stock of this wires & cables company rose by over 11% in the past week following the release of its Q3FY26 results. Revenue jumped 42% YoY to Rs 2,550.1 crore, fueled by a dominant performance in the cables and wires (C&W) segment. Net profit rose 70.4% to Rs 4,254.5 crore, driven by strong volume growth across infrastructure, construction, and power sectors. It appears in a screener of stocks with rising net cash flow & cash flow from operating activities.

Its Q3 revenue surpassed Trendlyne’s Forecaster estimates by 11.6%, a success attributed to strict pricing discipline and efficient cost management. Overall volumes grew by 30%, supported by robust domestic demand and a healthy uptick in exports. However, the Fast-Moving Electrical Goods (FMEG) segment lagged behind, posting an EBIT loss of Rs 5 crore due to stagnant demand.

COO Rajesh Jain expressed confidence in maintaining 8.5% margins for the cables business while targeting an FMEG breakeven by Q4FY26. Addressing market volatility, Jain noted that while real estate and industrial demand are surging, copper prices have been unpredictable. He stated: “We have seen extraordinary copper price volatility... it has moved by almost 20%–25% in a single quarter, putting pressure on working capital.” To mitigate this, the company implemented strategic price hikes throughout December and January.

To reach an ambitious Rs 4,500 crore revenue target, the company has earmarked Rs 1,200 crore for capital expenditure over the next three years. Approximately 80% of this fund is dedicated to expanding cable capacity to meet global demand. Management is eyeing a volume growth of 17%–18%, consistently outpacing the industry average of 14%. Furthermore, the FMEG segment is projected to expand at a 25% CAGR, utilizing its low base to drive future diversification.

PL Capital maintained a ‘Buy’ rating with an upgraded target price of Rs 1,844, noting that the expansion plans are perfectly aligned with long-term growth. The company has guided for a 100 bps margin improvement every year, aiming for a 10.5% EBIT margin in the C&W segment by FY28. Analysts believe that timely capacity additions and a focus on high-margin global markets will help the company maintain its competitive edge and sustain its current momentum.

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

The Baseline

05 Feb 2026

Buybacks after the tax reset: What has changed?

By Anagh Keremutt

When a company repurchases its own shares, it returns surplus cash rather than investing it elsewhere. This can signal confidence in the business, but it can also reflect limited near-term expansion opportunities. In India, buybacks remain uncommon and are usually limited to a few large companies each year.

In contrast, US companies routinely use buybacks as a capital-return tool. Companies repurchased over $1 trillion of shares in 2025, as investors expect regular cash returns and firms use buybacks to support earnings per share and stock prices through flexible payouts.

In 2024, Bajaj Auto executed a Rs 4,000-crore buyback, the largest of the year. In 2025, Infosys made headlines with a Rs 18,000 crore buyback. Overall, 15 companies repurchased shares worth Rs 19,749 crore in 2025, with Infosys accounting for the majority.

After the Union Budget 2024, the buyback tax shifted from companies to investors. So when you sold your shares back to the company, the money you received was taxed like a dividend, based on your income tax bracket. For large investors (promoters) in the highest tax bracket, this meant paying around 39% or more in tax. It made buybacks less appealing.

New changes in 2026-27

The Union Budget 2026–27 has changed this. Now, money from a buyback is taxed as capital gains rather than dividend income. Replacing the dividend-based system introduced in 2024 makes the taxation fairer and more transparent. It encourages investors and companies to pursue buybacks for business reasons without being heavily penalized by high taxes.

Amit Gupta, Partner at Saraf and Partners, explained, “Earlier rules taxed the entire buyback amount as dividend income to stop big investors from misusing it, but it also hurt regular investors by taxing their invested capital.”

He noted that while the tax is still paid by investors, “treating buybacks as capital gains allows investors to deduct what they originally paid for the shares”.

In this edition of Chart of the Week, we examine how capital-gains taxation of buybacks affects promoters and public shareholders differently, and why buybacks are still popular as a cash-return tool.

How buybacks were taxed, and why it mattered

Under the 2024–25 regime, buyback proceeds were taxed as dividends in the hands of shareholders at their income-tax slab rates, often exceeding 30%. Since the tax applied to the full amount received, investors effectively paid tax even on the return of their own original capital.

Many investors faced difficulties because they could not offset the cost of their shares against this dividend tax. Instead, the system recorded a “capital loss” that investors could carry forward only to offset future capital gains, not the immediate buyback tax.

This marked a sharp break from the pre-2024 system, in which companies had paid a flat ~23% tax and shareholders received buyback proceeds tax-free. While the 2024 change aimed to tax promoters at their personal slab rates, it inadvertently turned buybacks into one of the most heavily taxed forms of capital return globally.

Although the 2024 structure succeeded in closing a perceived “tax loophole”, it also distorted payout decisions by making buybacks more expensive for major shareholders than straightforward market sales.

What the new tax framework changes

Under the 2026–27 Budget, the government no longer treats share buybacks as dividends. From April 1, 2026, investors will not face the earlier 10% tax deduction at source on buybacks. This change puts more cash directly in the hands of resident investors and makes buybacks simpler to understand and receive.

The tax now applies only to the actual profit—the difference between the buyback price and what the investor paid for the shares. Long-term gains face a 12.5% tax (with an annual exemption of up to Rs 1.25 lakh), while short-term gains are taxed at 20%. These rates replace the earlier slab-based taxes that often crossed 30%. Retail investors benefit because the tax no longer applies to money that simply returns their original investment.

For promoters, the change restores balance while closing tax loopholes. Any shareholder with a 10% or higher stake is treated as a promoter and pays an extra levy. This lifts the effective tax to about 22% for corporate promoters and 30% for individuals and NRIs, keeping their tax burden close to earlier dividend levels.

Kunal Savani, Partner at Cyril Amarchand Mangaldas, noted, “While the shift to capital gains is a relief, promoters may still pay a higher overall tax than retail investors due to surcharges, resulting in a more layered tax outcome for controlling shareholders.”

Why buybacks will still remain relevant

By removing the dividend-tax “penalty”, the new regime restores the economic logic of buybacks. Companies can continue to use buybacks effectively when their shares trade below intrinsic value. By reducing the number of outstanding shares, repurchases lift earnings per share and improve returns for remaining shareholders.

Plus, companies no longer face the “double-whammy” of taxing capital returns as income. Firms with surplus cash, strong balance sheets, and confidence in their valuations will continue to use buybacks to optimize capital structures.

Recent trends support this. Software and IT services companies accounted for about 40% of buyback activity in 2025. Their cash-heavy balance sheets, low reinvestment needs, and flexible payout preferences make buybacks a natural choice even under the new tax rules.

Amit Chandra, vice-president at HDFC Securities, said, “IT services companies may increasingly opt for buybacks, as they now benefit not only retail investors but also corporate promoters, who can now offset their cost of investment.”

The tax reset improves the quality of capital-return decisions. Dividends continue to provide steady payouts, while buybacks now serve their intended role as tools for capital optimization and valuation signaling.

The Baseline

05 Feb 2026

The Big Bulls are bleeding: Kacholia and Kedia get a reality check this Q3

By Tejas MD

Every time I sit down to write this newsletter, I tell myself: maybe this week Trump won’t be in the news.

And every time, Trump offers an all-caps reply: “Thank you for your attention to this matter!”

Indian markets jumped sharply on Tuesday after Trump took everyone by surprise by announcing a US-India trade deal. Superstar investor Vijay Kedia responded in his trademark style: with a song.

The post-deal jump came one day after indices fell 2% in a special Sunday Budget trading session.

2025 was the year of volatility, and 2026 hasn't bothered to ease us in. Markets feel like a speed ride without a seatbelt, with sharp moves and headlines driving sentiment. While optimism around Indian stocks are up, the coming months are not going to be smooth.

How are seasoned superstar investors playing this market? Are they taking the same hits as retail investors?

Let’s take a look. And thank you for your attention to this matter!

Market volatility takes a bite out of superstar investor portfolios

We regular investors follow the superstars closely. We don't just track their portfolios. We know about Kacholia's introversion and his preference for smallcaps. We know about Jhunjhunwala's famous irritability, Kedia's tendency to break into song when given the chance, and Singhania's snazzy style of dressing.

But in recent months, these superstars have not been able to stay ahead of the market. Back in September 2024, markets were at all-time highs, and so were the net worth of many big investing names. But sentiment has turned.

Relentless FII selling and rising geopolitical uncertainty have hit their portfolios. Ashish Kacholia and Vijay Kedia saw real damage from the weak market.

While all the big superstars are in the red, Kedia and Kacholia have seen their net worth turn negative early, since Q2FY26, with sharp declines from their peaks.

Many existing holdings have corrected. Kedia’s top holding, Atul Auto, which accounts for 22% of his portfolio, is down 16% over the past year. Akash Bhanshali’s key bet, Gujarat Fluorochemicals, has declined 9% over the same period.

As Indians tend to do in dark times, Kedia turned to cricket to explain his current market approach: “Stay put on the pitch. Don’t try to hit fours and sixes. Play defensive.”

Meaningful investments, he says, make sense only when a new bull market begins. Until then, the man who once chased cheetahs is happy riding with ‘tortoises’.

Sunil Singhania echoed similar caution, saying, “This is not the year where you can afford to make too many mistakes.” He added that he plans to be “very, very, very selective” while choosing stocks this year.

Singhania did not add any new stakes in Q3. He exited two stocks by cutting his holding below 1% and reduced exposure in two others.

As market turbulence weighed on portfolios, most expert investors have either stayed put or trimmed positions, with few buys.

Mukul Agrawal, who tends to be more aggressive, took a slightly different path and reshuffled his portfolio. In Q3FY26, he cut holdings in seven companies and added four new names. But even Agrawal slowed down compared to Q2, when he had added stakes in ten companies and exited thirteen.

Akash Bhanshali and Rakesh Jhunjhunwala & Associates (managed by Rare Enterprises) have stayed on the sidelines, waiting for market volatility to ease before making fresh moves.

What are superstar investors betting on?

Superstar investors bought new stakes in nine companies during the quarter. Four of these were added by Mukul Agrawal alone. The largest investment came from Agrawal in the recently listed pharma company Sudeep Pharma, where his holding is now valued at around Rs 90 crore.

Two clear patterns emerge. First, all nine new bets have market capitalisations below Rs 10,000 crore, indicating that superstar investors are selectively investing in small-cap names. Second, four of the nine companies score well on fundamentals, reflected in strong Trendlyne Durability scores.

With the Nifty Smallcap 250 index down over 10% from its all-time highs, these stocks also have lower Momentum scores, highlighting weak market sentiment.

Only one company, Sudeep Pharma (+2%), of the nine companies delivered positive returns in the past quarter. Adcounty Media, Sudeep Pharma, and Advent Hotels International are recent listings that superstar investors chose to back despite the volatility.

Running for the exit: Superstar investors sell stakes in underperformers

Five stocks exited superstar portfolios in Q3, and all five have fallen over the past quarter.

Stanley Lifestyles and Denta Water and Infra were hit the hardest, each falling by more than 30% during the quarter.

The exits spanned industries, from utilities to speciality chemicals.

Vijay Kedia’s 2019 bet Neuland Labs shines in long-term growth

Neuland Labs stands out as the best-performing long-term bet for both Vijay Kedia and Mukul Agrawal. Kedia, however, has generated superior returns thanks to his early entry back in 2019, when valuations were far more attractive.

Akash Bhanshali’s long-term bet, Sudarshan Chemicals, has lagged behind the top performers of other superstar investors. His largest holding, Gujarat Fluorochemicals—which makes up nearly 30% of his portfolio—has underperformed the benchmark index. Despite this, Bhanshali’s overall net worth has nearly tripled over the past two years, driven by strong gains in other holdings and timely new investments.

See the complete list of superstar buys here, and their sells here.

And if you’re looking for high quality portfolios outside superstar bets, you can explore Featured Baskets on Starfolio, including Trendlyne RA baskets.

The Baseline

03 Feb 2026

Five stocks to buy from analysts this week - February 3, 2026

By Abdullah Shah

1. Nippon Life India Asset Management:

ICICI Direct maintains its ‘Buy’ rating on this asset management company, with a target price of Rs 1,020, an upside of 9.8%. The company had a strong Q3FY26. Its mutual fund assets under management (AUM) grew 23% YoY to Rs 7 lakh crore. Its market share also rose to 8.7%, driven by its gold and silver exchange-traded funds (ETFs).

Management credits this growth to a diverse product lineup and more investors using SIPs. Equity funds represent 47% of its assets, with ETFs at 30%. Debt funds make up 15%, while the rest comes from liquid and arbitrage funds.

Analysts Jaymin Trivedi and Kirankumar Choudhary note that Nippon Life also handles over Rs 1 lakh crore in alternative investments and offshore products. They expect fees to remain steady at about 0.4% and add that distributors will likely absorb the costs of any new regulations.

Trivedi and Choudhary predict the company will continue to grow its market share, powered by its booming ETFs and reliable active equity funds. They also believe favourable industry trends, a wide sales network, and innovative products will fuel its long-term success.

2. Sharda Cropchem:

Anand Rathi retains a ‘Buy’ call on this agrochemicals manufacturer, with a higher target price of Rs 1,330 per share, an upside of 19.4%. Sharda Cropchem reported a strong Q3FY26. Revenue climbed 40.9% YoY, powered by growth in Europe and Latin America. Net profit soared 4.7 times, boosted by favourable currency exchange and sales of higher-margin products.

Analyst Himanshu Binani believes product prices have hit their lowest point. Management is confident it can soon raise prices, backed by growing sales volumes as the company enters new markets. Management expects growth to continue, driven by new product registrations, yearly spending of Rs 450-500 crore, and market share gains.

Binani notes that better demand, higher prices, and stable costs all helped boost profit margins. Management aims to achieve a gross margin of 34-35% for the next quarter and into FY27, supported by price hikes. The analyst expects annual revenue growth of 15% and net profit growth of 34% over FY26-28.

3. Acutaas Chemicals:

Geojit BNP Paribas reiterates a ‘Buy’ call on this pharmaceutical manufacturer, with a target price of Rs 2,350 per share, a 19.3% upside. Acutaas Chemicals delivered strong Q3FY26 results. Net profit surged 140.2% YoY, owing to sales of more profitable products. Revenue jumped 43.8%, driven by strong performance in its core active pharmaceutical intermediates business.

Analyst Mithun T Joseph is optimistic about the company’s medium-term prospects, citing a clear pipeline of contract development and manufacturing organisation (CDMO) projects and growing speciality chemical sales. Management raised its full-year revenue growth forecast to 30% from 25%, with profit margins around 35% for FY26. This confidence comes from an expanding CDMO business and high demand.

Joseph highlighted that the company has invested Rs 130 crore of its planned Rs 200 crore in its South Korean semiconductor joint venture, Indichem. The new facility should be running by the end of 2026. Analysts project the company to achieve 32.1% annual revenue growth and 62.2% annual net profit growth through FY27.

4. SBI Life Insurance Company:

Axis Direct maintains its ‘Buy’ rating on this insurance company, with a target price of Rs 2,450, an upside of 22.4%. The company posted solid Q3FY26 results, hitting its new business margin target of 26.6%, in line with full-year guidance. Analysts Dnyanada Vaidya and Abhishek Pandya say the company offset the impact of GST changes on its margin by selling more profitable products and improving its sales strategy.

Selling insurance through banks remains its main channel, accounting for 62% of premiums. Sales through SBI's network grew 16% YoY, while sales from other bank partners jumped 24%. The agent channel also grew 11%, driven by the addition of more agents and 66 new branches this year. Management expects annual premium growth of 13–14% for FY26.

Vaidya and Pandya project a 16% CAGR in new business premiums and a 12% CAGR in new business through FY28. They see stable margins, strong sales channels, and consistent premium growth as key drivers for steady future earnings.

5. Jindal Steel:

IDBI Capital upgrades this iron & steel products company to a ‘Buy’ rating from ‘Hold’ with a higher target price of Rs 1,301 per share, an 13.2% upside. Jindal Steel reported mixed Q3FY26 results. Revenue grew 10.7% YoY, thanks to strong sales of high-value products in the distribution and infrastructure segments. However, net profit fell 80% due to one-time startup costs for a new blast furnace and higher raw material prices.

Analysts Ajit Sahu and Mohd Sheikh Sahil expect sales volume and product mix to improve once the new furnace and pipeline start in Q4FY26. Management noted that net debt increased to Rs 15,400 crore to fund major expansion plans. The company has approved Rs 21,100 crore in spending over the next few years, which includes work to improve efficiency at its Utkal mine in Odisha.

Sahu and Sahil highlighted that the average selling price fell by 9% due to lower steel prices and a less profitable product mix. The company sold more lower-margin steel during its expansion and used more of its by-products internally. Looking ahead, they project revenue to grow at 11.6% annually and net profit at 19.3% through FY28.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

30 Jan 2026

Five Interesting Stocks Today - January 30, 2026

By Trendlyne Analysis

1. GE Vernova T&D India:

This power distribution company rose 22% over the past week after reporting a sharp improvement in margins. EBITDA margin rose 10% points YoY to 26.7%, driven by higher volumes, better pricing, and execution of high-margin orders. The company’s management upgraded its FY26 margin guidance to the higher end of the 20s from the mid-20s earlier.

Revenue rose 58%, while net profit more than doubled. Both were ahead of Forecaster estimates. Order bookings during the quarter stood at Rs 294 crore, up 41%, supported by steady demand in the transmission and distribution segment. The order book stood at Rs 14,380 crore at the end of the quarter.

The domestic order pipeline is supported by tariff-based competitive bidding across states and rising investments in renewable-linked transmission capacity. Exports, which make up 14% of the order book, have moved slower due to delays in project approvals and changes in timelines at overseas project sites. These orders are now expected to be executed in H2FY27.

The company has outlined a capex of Rs 1,000 crore through FY28, mainly to expand capacity in transformers, reactors, and substation equipment.

MD & CEO Sandeep Zanzaria said, “We do not see near-term pressure on profitability despite commodity volatility. Margins are holding due to better contract terms and cost discipline, and we expect execution to remain strong over the next few years, supported by the order backlog.”

Prabhudas Lilladher raised the target price to Rs 4,050, citing a healthy order pipeline in the power sector and management’s focus on margin improvement. They expect the company’s revenue and net profit to grow by 27% and 18.2% respectively over FY26-28.

2. Bharat Electronics:

Thisdefence company surged 8.9% on January 28 after posting strongQ3FY26 results. Revenue rose 24% YoY and net profit grew 21%, beatingForecaster estimates. Growth was driven by faster execution of major projects in missile defence, surveillance, radar, and electronic warfare, contributing over Rs 5,000 crore.

So far this year, the company has locked down Rs 19,300 crore in new orders. Chairman and Managing Director Manoj Jainsaid the company is “more than 90% confident” of landing the massive Rs 30,000 crore Quick Reaction Surface-to-Air Missile (QRSAM) deal by Q4. Even without it, the company expects to beat its annual target of Rs 27,000 crore.

On deliveries, Jainsaid, “This year, we are targeting around 95% of our items to deliver on time. Next year, we want to make it 100%.” Imported semiconductors are causing most delays. To fix this, BEL is designing alternative chips and manufacturing key components in-house to reduce its reliance on imports.

BEL’s order book stands at Rs 73,450 crore, dominated by defence projects. The company aims to increase its non-defence revenue contribution to over 15% in the long term, up from the current 6–7%, and triple its exports to 10%. To meet these goals, BEL isexpanding into new areas such as railways and metro systems, aviation electronics, data centres, and cybersecurity solutions.

Looking ahead, BEL maintained its revenue growth guidance of over 15% for FY26 and expects full-year EBITDA margins to remain around 27%. R&D spending isprojected to surpass Rs 1,700 crore this year and Rs 2,000 crore next year. This investment will support homegrown technology, reduce dependence on imports, and improve efficiency in executing large defence programs.

Post results, Jefferiesmaintained its Buy rating with a target price of Rs 565, citing strong revenue visibility. It noted that the India–EU deal could support R&D and potentially lead to new orders. They added that more clarity on this opportunity should emerge over the next three to six months.

3. Godrej Consumer Products:

This FMCG stock fell 7.3% last week after its Q3FY26 profit missed Forecaster estimates by 15.7%. The miss reflected continued weakness in overseas markets and lower-than-expected contribution from other income. Indonesia, which contributes about 12% of consolidated revenue, remained the key drag as pricing pressure persisted through the quarter.

Revenue rose 9% YoY to Rs 4,099 crore, supported by volumes and market share gains across air fresheners, fabric care, household insecticides and hair colour in India. However, overall domestic growth fell short of expectations. Rural demand recovery remained slow, and pricing moves in soaps and home care were limited.

Net profit was flat at Rs 498 crore, with operating gains offset by lower other income and exceptional charges. Operating performance improved on the back of cost discipline, lower advertising intensity and supply-chain efficiencies.

Management expects conditions to improve gradually. CEO Sudhir Sithapati said, "India’s volume growth, currently in the mid-single digits, is expected to improve by around 200 bps over the next two years as affordability improves and demand normalises.” Operating margins are expected to remain at around current levels of 26%.

On overseas markets, Sithapati said, "Pricing pressure in Indonesia is showing early signs of stabilisation, and we expect a more meaningful recovery from FY27 as competitive intensity eases."

Motilal Oswal reiterated its ‘Buy’ rating and raised its target price to Rs 1,450, citing improving volume growth in India, market share gains in home care, and a recovery in personal wash driven by better affordability. It expects revenue to grow at an 11% CAGR through FY28, with margins supported by easing palm oil prices, supply-chain efficiencies, product mix gains and lower media costs.

4. UltraTech Cement:

This cement manufacturer’s stock price climbed 2.8% over the past week after reporting strong Q3FY26 performance. Revenue jumped 26% YoY, while net profit rose 17.1%, driven by higher domestic sales of both grey and white cement. The company also beat Forecaster estimates on both the top line and bottom line during the quarter.

Demand remained broad-based across rural and urban markets. Infrastructure projects such as expressways, metros, and airports supported sales volumes, while housing demand stayed resilient despite elections and an extended monsoon. Lower interest rates and sustained government spending boosted cement consumption across regions despite the headwinds.

UltraTech also continued to strengthen its business mix. Overseas operations improved as the ready-mix concrete (RMC) segment expanded. Recent acquisitions of Kesoram Industries and Indian Cements have added scale and deepened the company’s regional footprint, strengthening its overall portfolio.

Profitability improved despite cost pressures, driven by growth in the higher-margin RMC segment. EBITDA margin expanded by 165 basis points, even as pet coke, coal, labour costs, and currency weakness weighed on expenses. Management indicated that it plans to pass on higher input costs through price hikes, supported by strong underlying demand, to protect margins.

Outlining the expansion roadmap, Business Head and CFO Atul Daga said, “We maintain our guidance of Rs 9,500–10,000 crore in capex for FY26. With Rs 7,200 crore already utilised in 9MFY26, we have planned a capex of Rs 2,500 crore in Q4.” The company plans to add 8–9 million tonnes of capacity in Q4FY26 and aims to lift total capacity by about 21% by FY28.

Following the results, ICICI Direct reiterated a ‘Buy’ rating on the stock with a target price of Rs 1,500, implying an upside of 18%. The brokerage cited UltraTech’s diversified market presence, disciplined capex execution, and relatively lower earnings volatility. Analysts expect the company to deliver annual revenue growth of 14.2% and net profit growth of 36.8% over FY26–28.

5. JSW Energy:

The stock of this power & electric utilities company declined over 6% in the past week following a lukewarm Q3FY26 performance. While year-on-year growth remained healthy, net profit dropped 40.4% sequentially to Rs 419.9 crore, driven by high finance and depreciation costs. Revenue also dipped 20.2% to Rs 4,254.5 crore. It appears in a screener of stocks having expensive valuations according to the Trendlyne valuation score.

Quarterly revenue missed Trendlyne’s Forecaster estimates by 9.7% due to lower power generation at the Ratnagiri, Barmer, and KSK Mahanadi plants. Total generation fell 25% compared to the previous quarter, largely due to a seasonal "high base" in Q2. During that period, the Indian monsoon typically maximizes output from the company’s hydro and wind-heavy portfolio, making the sequential decline a common seasonal trend.

Despite the dip, power sales surged 65% YoY to 11.1 billion units, significantly beating the industry's average decline of 0.1%. Around 82% of these sales were through long-term Power Purchase Agreements (PPAs). Growth was visible across the board: thermal generation rose 55%, solar and wind spiked 149%, and hydro increased 27%. Demand also showed signs of a strong rebound in late December and early January.

Thermal energy has emerged as a vital support for grid stability. State bids for thermal power reached 12.8 GW in the first nine months of the fiscal year, outstripping the 10.4 GW seen in renewable energy. CEO Sharad Mahendra noted that the industry is shifting “from plain-vanilla renewable energy towards a more balanced mix of thermal and storage solutions to ensure grid stability and energy security.”

Regarding expansion, the company is maintaining its goal to add 1.5 GW of fresh capacity during the second half of FY26. Having commissioned 125 MW in Q3, the management remains confident in its progress. Mr. Mahendra affirmed, “We are well on track... we will be meeting the guidance” for the current quarter, reinforcing the company’s ability to execute its infrastructure roadmap despite broader market fluctuations.

Axis Direct maintained its ‘Buy’ rating with a lower target price of Rs 603, citing JSW’s ambitious 2030 vision: 30 GW of generation and 40 GWh of storage capacity. Currently, the company has already secured 29.6 GWh of storage. While the brokerage flags risks like fluctuating short-term prices and PPA delays, it remains optimistic about JSW Energy’s role as a leader in India’s ongoing energy transition.

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

The Baseline

30 Jan 2026

Five stocks to buy from analysts this week - January 30, 2026

By Ruchir Sankhla

1. Dr. Reddy's Laboratories:

ICICI Direct maintains its ‘Buy’ rating on this pharma company, with a target price of Rs 1,490, an upside of 22.3%. Analysts Siddhant Khandekar and Shubh Mehta noted a decent Q3FY26 performance, though pricing pressure hurt the US business. Revenue grew 4.4% YoY, led by strong growth in Europe, India, Russia, and other world markets.

Management remains optimistic about long-term growth. It sees big opportunities in Glucagon-Like Peptide-1 (GLP-1) drugs, used for diabetes and weight loss, and plans to produce 12 million units by FY27 with a partner. They also plan several biosimilar launches in the US and Europe over the next two to three years, including Abatacept, Denosumab, and Rituximab, for chronic and immune-related diseases.

Khandekar and Mehta expect upcoming launches of the weight management drug, Semaglutide, in India, Canada, and Brazil over the next three to six months to support branded growth. They estimate US biosimilars revenue of about $285 million in FY28. R&D spending should be 7–8% of revenue, with a greater focus on complex products.

2. Jindal Stainless:

ICICI Securities maintains its ‘Buy’ rating on this stainless steel manufacturer, with a target price of Rs 860, an upside of 4.6%. The company reported a strong Q3FY26, with net profit surging 26.6% YoY, driven by lower finance costs. Revenue increased 6.1%, led by stronger domestic sales. However, exports dropped to 5% of total volumes from 9% last quarter, impacted by new European carbon regulations.

Management reiterated FY26 volume growth guidance of 9–10%. Capacity utilisation continues to improve, with the Chromeni plant in Gujarat operating at about 75% and the Rathi facility in NCR at roughly 85%. The company also cut its net debt by Rs 200 crore. Ongoing projects in India and Indonesia are on track; the Indonesian nickel project became EBITDA-positive, and the Maharashtra greenfield project is expected to incur spending from FY27-28.

Analysts Vikash Singh and Pritish Urumkar foresee stable near-term performance. Strong domestic demand and lower interest costs will support this. Gradual debt reduction should boost cash flows and profitability. Long-term expansion plans beyond FY28 are still developing.

3. LTIMindtree:

Axis Direct retains a ‘Buy’ call on this IT consulting & software provider, with a higher target price of Rs 7,300 per share, a 22.2% upside. The stock reported mixed Q3FY26 results. LTIMindtree’s revenue increased 2.9% QoQ, driven by improvements in healthcare services, manufacturing & resources, and consumer segments. However, net profit fell 30.7% due to new labour laws. The company's order book jumped to $1.7 billion, fueled by a five-year contract from a US insurer.

Analysts Kuber Chauhan and Abhishek Bhalotia believe the company can deliver strong revenue growth, supported by its long-term order book. However, they remain cautious on short-term growth due to rising geopolitical unrest and supply constraints. Management noted lower spending from the top five clients due to a tech spending realignment, but expects this to stabilise in Q4FY26.

Chauhan and Bhalotia highlighted the company’s operating margin expansion of 20 bps, driven by the ‘Fit for Future’ program and a weaker Indian rupee. The company plans to replace ‘Fit for Future’ with ‘New Horizons’, aiming for both growth and cost efficiency in the medium to long-term. They expect LTIMindtree to deliver revenue and net profit CAGRs of 11.6% and 14.1%, respectively, over FY26-28.

4. Persistent Systems:

Anand Rathi upgrades this IT consulting & software company to a ‘Buy’ call, with a target price of Rs 7,587 per share, an upside of 25.7%. Persistent reported mixed Q3FY26 results as revenue increased 5.1% QoQ, but net profit declined 6.8%. Revenue growth stemmed from rising deal wins and improvements across business verticals, while new labour codes impacted profitability.

Analysts Sushovon Nayak and Apporva Khandelwal believe Persistent’s focus on deep domain expertise supports near-term margin growth and higher revenue from large clients. They added that clients increasingly choose vendors that deliver end-to-end AI-anchored programs, not just point AI solutions, which benefits the company’s platform-centric approach.

Nayak and Khandelwal noted that scaling AI-led, tool-driven deals expanded the EBITDA margin, despite a net profit decline. A weaker Indian rupee, lower sub-contracting costs, and higher utilisation also boosted margins. The company won multiple large transformation deals, along with repeat orders and expansions in BFSI and Hi-Tech, increasing revenue contribution from large clients. They expect Persistent to deliver revenue and net profit CAGRs of 18.3% and 28.5%, respectively, over FY26-28.

5. APL Apollo Tubes:

IDBI Capital upgrades this steel tube manufacturer to a ‘Buy’ rating, with a target price of Rs 2,260, an upside of 10.5%. This upgrade followed strong Q3FY26 results that surpassed Forecaster estimates. Revenue grew 7% YoY, driven by higher sales volumes. Growth came from general structural products and rust-proof sheets, amid soft demand in parts of the steel market.

Management boosted volume growth guidance to 20% for Q4FY26 and FY27. They aim for total volumes of 4.2 million tonnes (MT) with an EBITDA per tonne of about Rs 5,500. The company continues to expand capacity, planning to grow from 5 MT to 8 MT through both new (greenfield) and existing (brownfield) projects.

Analysts Ajit Sahu and Mohd Sheikh Sahil say APL Apollo’s Vision 2030 strategy focuses on specialty products to improve long-term profits. The company aims to reach 10 MT by FY30 by entering high-value specialty areas like electric vehicles, aerospace, and heavy engineering. They project that revenue and net profit will grow annually by 17.7% and 20.2% over the next two years.

Note: These recommendations are from various analysts and are not recommendations by Trendlyne.

(You can find all analyst picks here)

The Baseline

29 Jan 2026

India’s retail trading cools as long-term investing takes over

By Anagh Keremutt

Between 2020 and 2022, millions of first-time investors entered India’s equity markets, helped by the post Covid boom, low brokerage costs, online trading platforms and market momentum. Trading felt easy and rewarding (at least at first).

But many new participants focused on short-term trading, especially derivatives, without fully understanding the risks or costs. As volatility returned to the market, losses in short term trading mounted. As speculators have backed off, the early wave of aggressive retail trading is giving way to more measured participation.

Higher taxes and stricter rules have also squeezed the margins so frequent trading now eats into capital. Regulators have intentionally made high-risk trading more expensive to prevent massive retail losses.

Co-founder and CEO of Zerodha, Nithin Kamath, says, “The increase in securities transaction tax (STT) on options, reduction to only two weekly expiries, and the removal of exchange transaction charge rebates have made trading more expensive.”

In this edition of Chart of the Week, the focus is on why discount brokers are losing active users, while bank-backed broking platforms look stable.

Fewer traders, higher costs

The clearest evidence of the market reset is the fall in active retail traders. As of December 2025, the number of all active traders declined by 10.6% YoY to 4.5 crore. Zerodha’s active clients fell 15.6%, while Groww’s declined 7.8%. The decline reflects reduced trading activity rather than short-term volatility.

Brokers relying heavily on frequent retail trading are feeling the most heat. Lower volumes quickly translate into weaker revenues for these players. Nilesh Sharma, ED and President of SAMCO Securities, says, “Cutting fees is no longer a growth strategy—it’s a survival play. Brokers are now looking for other ways to earn, like charging for accounts and maintenance, just to stay afloat.”

This shift in the revenue mix has increased costs for investors, further reducing the appeal of frequent trading.

Broker strategies are also changing. For instance, Angel One highlighted during its Q3FY26 earnings call, a reduction in its reliance on derivatives. The share of F&O in Angel’s broking revenue fell 8.2 percentage points YoY to 44.3%, reflecting lower volumes and a conscious move toward more stable revenue streams.

Client growth at bank-owned platforms like SBICAP Securities and ICICI Securities is supported by their strong banking distribution channels. However, this may not translate into higher trading activity, as many accounts are opened as part of bundled banking relationships.

Cost structure also matters. Bank-backed brokers benefit from low-cost funding, allowing them to offer cheaper leverage. ICICI Direct’s MTF rates go as low as 9.7%, compared with 12.5–16.5% at many standalone brokers like Dhan. Growth at bank-owned platforms reflects their pricing and distribution advantages, not a revival of speculative trading.

Leverage concentrates in select, earnings-driven strategies

While mass retail trading has cooled, leverage itself has not disappeared. Its use has narrowed to specific segments and profiles. Dhiraj Relli, MD & CEO of HDFC Securities, said, “HNIs are using margin trading facilities (MTF) for short-term opportunities, backed by confidence in earnings.”

This reflects a shift from leveraged index and momentum trades to stock-specific positions. Leverage is increasingly tied to earnings visibility or event-driven trades rather than momentum-based speculation.

Shripal Shah, President at Kotak Securities, said, “MTF offers a more transparent and regulated way to use leverage, which many investors now prefer over derivatives.”

Data confirms the cooling in derivatives participation. Retail share in equity futures fell from about 29% in FY21 to below 18% in FY26 year-to-date. Index derivatives participation has stabilised, signalling the end of the post-pandemic surge in speculative activity.

NSE data shows that equity options premium turnover declined by about 25% in 2025, while equity futures average daily turnover fell by roughly 18%. This is not a short-term dip but a sustained reduction in retail risk-taking.

Investors choose patience over action

The good news is that money isn't leaving the market. The hunt is for safer ground, so instead of watching daily price swings, Indians are pouring record amounts into SIPs. In December 2025, SIP inflows hit a record Rs 31,002 crore, with total annual contributions crossing Rs 3 trillion for the first time.

Mutual fund participation is at an all-time high, with 23.5 crore accounts. More investors are committing to monthly investments, reducing the need for frequent rebalances.

“While overall AUM growth moderated due to debt fund outflows for liquidity needs and muted valuation gains, equity-led industry AUM still grew 19.9%, supported by higher participation and broader mutual fund adoption,” said AMFI chief executive Venkat Chalasani.

Higher-income investors are also allocating more to managed portfolios and private funds. These options limit day-to-day involvement and help smooth market swings.

Importantly, this shift has not weakened equity ownership. Domestic institutional investors recorded net equity inflows of about Rs 7.8 lakh crore in 2025, offsetting foreign selling. Individual investor share of NSE market capitalisation rose to nearly 18.8% in Q2FY26, even as foreign ownership fell to multi-year lows.

Retail behaviour is shifting from speed to stability, which is a long-term positive for the market. Fewer speculative trades, and steadier flows are reducing market noise and improving resilience. The frenzy has ended, but participation is becoming structurally healthier.

The Baseline

29 Jan 2026

Donald Trump tried to punish India's economy, but he may have saved it from its bad habits

Donald Trump had planned to be the villain of this story. When he slapped a 50% tariff on India in August 2025 as his friendship with PM Modi soured, the Indian stock market fell sharply, and the economy braced for impact. But recent reform moves by the government suggest that Trump's aggression may have pushed India into action.

Since 2020, there were some discouraging signs around the Indian economy. It had started rebuilding the tariff walls of the 1970s, and average applied tariffs across imports crept up to 18.1%, the highest among major economies as the government pushed "Make in India". A major sticking point for Indian industry as tariffs rose, was the inverted duty structure, where India taxed raw materials higher than finished goods.

It's still early days, but the signs are that India is back in reformist mode. India, long called the "sleeping giant", may have woken up and had some coffee, thanks to Trump.

Ever since the US launched its trade war last year, the Indian government has made some important policy changes. It simplified GST, and implemented long pending labour reforms. In last year's budget, duties on mobile camera modules, open cells for TVs, and solar wafers were slashed. The result since then has been a surge in intermediate imports, and a rampup in India's electronics exports.

The most sensitive pivot, however, is on China. After the deep freeze in India-China relations from 2020-2024, the Indian government is becoming a bit more realistic. Recognizing that Indian factories cannot run without Chinese machinery and sub-assemblies, the government liberalized the visa regime for Chinese technicians in December 2025. The Quality Control Orders (QCOs) on footwear and toys, which act as non-tariff barriers to these imports and rose in number from 51 in 2015 to over 700 in 2024, have been cut.

The times, they are a'changing: India is reacting to a more competitive global market

The peak of India's new protectionist era was in 2023, when the Indian economy was a middle bencher in the global market. But Trump, the unintentional reformer, forced India’s hand. His tariffs shattered our complacency that we could coast on the China Plus One path without doing the hard, often unpopular work of reform.

India has been reacting late, no question. The share of manufacturing in India's GDP has been stuck at the same level of around 17% over the past decade. Vietnam in comparison, which invested heavily in manufacturing infrastructure over the last decade, managed to raise its GDP per capita to $4,280 while India's has grown more slowly, to $2,480.

India's tariff cuts have been narrow, but show some clear priorities. It has slashed tariffs for intermediate goods that Indian factories need, while keeping it high for finished goods. For example, India has kept tariffs high on items like ready to wear clothing, footwear, toys, furniture, and cars (although this will fall following the EU deal).

But it has slashed tariffs for critical inputs like solar wafers, machinery, lithium ion batteries, chips and chemicals. This keeps Indian exporters and manufacturers competitive.

The tariff gap between these two kinds of imports has steadily increased. India is increasingly protectionist on the supermarket shelf, and increasingly liberal on the factory floor.

Sun Kings: the rise of solar

Global oil politics has become another increasingly sore spot for both India and China under Trump, as the US has aggressively penalized and sanctioned top oil exporters like Russia and Iran. The Trump administration has also pivoted to "resource capture", by cornering the oil exports of countries like Venezuela.

In response, both India and China are investing heavily in solar and renwable energy. While coal and oil are still primary energy sources, India's incremental energy growth is entirely green. One catalyst has been the PM Surya Ghar scheme, launched in early 2024. The scheme offers aggressive subsidies for homes to install rooftop solar, turning millions of middle-class roofs into mini-power sources. As of January 2026, 2.4 million households have joined.

Corporate India is also investing heavily. The EU’s Carbon Border Adjustment Mechanism (CBAM), which is a green tariff on carbon-intensive imports, is forcing Indian steel and cement makers in particular to commission captive solar parks, such as the one by JSW Steel in Vijaynagar, Karnataka and by Tata Power in Gujarat and Madhya Pradesh.

At the current rate of growth, India is expected to add over 50 GW of new solar capacity in 2026 and become the world's second largest solar market, overtaking the US.

One thing is for certain. When the Indian government started asking its industrialists, "Where does it hurt?" the list it got was a long one with many, many pain points. Trump may have kickstarted a process that has the potential to transform the Indian economy, from regulations to power to infrastructure.

Across sectors, there is a sense of renewed reform. For example, as Trump has cracked down on H1Bs, India has turned to Global Capability Centres (GCCs) set up by multinational giants from JPMorgan to Boeing, which handle sophisticated operations from R&D to core processes. In 2025 alone, 140 new GCCs set up shop in India, many moving beyond Bangalore in search of tech talent to Tier-2 cities like Jaipur and Coimbatore.

Perhaps what Indians needed all along was a scarecrow, or a common enemy. In that case, the rise of Trump has been a spot of good news for reformers in India.