Where to Invest in 2026

As India steps into 2026, equity markets transition into a more mature and fundamentally driven phase. After the volatility of 2025, the coming year promises steadier progress built on stronger earnings visibility, policy continuity and resilient domestic demand. With valuations normalising in Large-Caps, mid and Small-Caps correcting excesses, and macro indicators turning supportive, investors should treat 2026 as a year of disciplined allocation rather than speculative chasing. The setup favours patient capital, sector focus and long-term conviction over short-term trading noise [EasyDNNnews:PaidContentStart]

As we enter 2026, India's equity markets stand at a juncture shaped by resilience amid global flux. This outlook draws on historical cycles, marked by periodic corrections yet sustained compounding, to frame a forward path. Unlike the exuberance of post-pandemic rebounds or the volatility of 2025, the coming year promises measured progress, underpinned by structural reforms and domestic drivers. Investors should view 2026 not as a sprint but as a phase of consolidation, where disciplined investment trumps speculation. 

Setting the Context: Where Markets Stand Entering 2026
The past three years encapsulate the cyclical nature of Indian equities, blending robust gains with corrective pauses. From 2023 to 2024, the Nifty 50 surged over 29 per cent cumulatively, fuelled by post-COVID recovery, strong corporate earnings, and inflows from domestic institutions. 

India 2026 Model Portfolio 

A  portfolio meant for 2026 cannot be built on optimism alone. It has to acknowledge where India stands in the economic cycle, how global risks are evolving, and which businesses can absorb volatility without eroding long-term wealth. The portfolio presented here is constructed with that balance in mind. It brings together structural compounders, defensives, and selectively chosen cyclicals, ensuring that returns are not dependent on a single macro outcome. The objective is not to chase momentum, but to participate in growth while preserving capital through different phases of the market. 

At the core of the portfolio are companies with durable business models and clear earnings visibility. Names such as Persistent Systems, Polycab India, and Lupin provide this stability. These businesses benefit from long-term themes such as digital transformation, infrastructure and housing-led electrification, and healthcare demand. Their balance sheets, market positioning, and execution track records allow them to compound earnings steadily, even when broader markets face temporary slowdowns. This core acts as an anchor, reducing drawdowns and bringing predictability to portfolio returns. 

The portfolio also allocates meaningfully to cyclical opportunities, but with measured position sizing. Stocks such as Union Bank of India, PNB Housing Finance, Ashok 

This period saw key inflection points: earnings growth averaging 15-20 per cent, RBI's steady rate regime, and global liquidity supporting risk assets. Domestic reforms, including PLI schemes and infrastructure capex, amplified manufacturing and export momentum. 

In contrast, 2025 marked a reset. The Nifty 50 delivered returns of around 10 per cent, underperforming global peers like Korea and Germany, while small-caps declined 10 per cent—their first annual lag behind large-caps in years. 

A Disciplined Approach to Long-Term Wealth Creation 

Leyland, and NALCO are aligned with India’s credit, infrastructure, and industrial cycles. When economic growth sustains and balance sheets continue to improve, these businesses can deliver disproportionate gains through operating leverage and valuation re-rating. At the same time, exposure is spread across sectors to avoid overdependence on any one cycle, allowing investors to benefit from upside without taking concentrated risk. 

To complement this, the portfolio includes select consumer and platform-based businesses such as Eureka Forbes and CarTrade Tech. These companies offer participation in consumption growth and digital adoption trends, with the potential for margin improvement as scale builds. A small allocation to Ashapura Minechem adds optionality to the portfolio, recognising that commodity-linked names can enhance returns when industrial demand improves, while keeping overall risk contained. 

Taken together, this portfolio is designed for investors looking beyond short-term market noise and focusing on disciplined wealth creation. It blends growth with resilience, opportunity with prudence, and structure with flexibility. For 2026, this approach allows investors to stay invested with confidence, prepared for volatility, yet positioned to benefit from India’s long-term economic trajectory. 

Foreign institutional investors (FIIs) turned net sellers, withdrawing amid rupee depreciation and U.S. tariff concerns, offset by domestic institutional investors (DIIs) maintaining a 25-month buying streak. Investor sentiment shifted from optimism to caution, with positioning lighter in mid- and small-caps after valuation froth. Yet, this echoes past cycles, such as 2018-2019, where corrections preceded multi-year rallies. Structurally, India's edge lies in its demographic dividend and digital leapfrog, differentiating it from ageing economies like China or debt-laden developed markets. 

Macro & Policy Landscape
India's economy has demonstrated renewed momentum, with real GDP growth accelerating to 8.2 per cent year-on-year in Q2 FY2025-26 (July-September 2025), marking a six-quarter high and surpassing expectations. This robust performance represents a sharp rebound from the 5.6 per cent growth in the corresponding quarter of the previous fiscal year and an improvement over the 7.8 per cent recorded in Q1 FY2025-26. The acceleration was primarily driven by strong contributions from the secondary sector (8.1 per cent, led by manufacturing at 9.1 per cent) and the tertiary sector (9.2 per cent, with financial, Real Estate, and professional services expanding at 10.2 per cent). For the first half of FY2025-26 (AprilSeptember), real GDP grew at 8.0 per cent, up from 6.1 per cent in H1 FY2024-25, underscoring resilient domestic demand and the effectiveness of ongoing structural reforms amid moderating global headwinds. 

Projections for FY2025-26 hover at 6.7-7 per cent, with FY2026-27 at 6.2-6.4 per cent, reflecting steady domestic demand amid global slowdowns. Inflation eased to multi-year lows of 0.8 per cent in the latest month, enabling RBI's accommodative stance. 

The RBI's policy outlook favours easing, with the repo rate cut to 5.25 per cent in December 2025, totalling 125 bps reductions for the year, and potential for another 25 bps to 5 per cent in early 2026. This cycle mirrors 2019's easing, boosting credit growth without stoking inflation, projected at 2-2.8 per cent for 2026. Government priorities—capex cycle, manufacturing via PLI (attracting `2 lakh crore investments by 2025), and energy transition—align with multi-year themes. Globally, U.S. growth moderates amid twin deficits, China's volatility persists (CSI 300 17-year ago levels), and geopolitics—trade tensions, crude oil stability (around $60-70/barrel), and rupee pressures—pose headwinds. India's forex reserves at $700 billion provide a buffer, echoing the stability of the 2013-2014 taper tantrum. 

Earnings & Valuations: The Market’s True Anchor 

Corporate earnings remain the bedrock of equity returns, with visibility improving post-2025 slowdown. Consensus estimates peg MSCI India earnings growth at 13 per cent for CY2025 and 16 per cent for CY2026, rebounding from single-digit FY2025 figures. 

Margins, pressured by input costs in 2025, should stabilise across sectors: manufacturing benefits from PLI efficiencies, while services leverage digital exports. Valuations offer comfort in large-caps but caution elsewhere. As of December 2025, Nifty trades at around 19x forward earnings, aligned with 10-year averages, versus premiums in mid- (22x) and smallcaps (19.3x on 2027 estimates). 

This compares favourably to historical peaks (e.g., 25x in 2021), suggesting room for expansion if growth delivers. Mid- and small-caps, underperformed during 2025, may rally postunderperformance, but selectivity is key; echoing 2008-2009, where quality compounded through volatility. 

Sectoral and Thematic Opportunities
2026's leaders will blend cyclical recovery with structural themes. Financial services stand out, buoyed by credit growth (projected 12-14 per cent) and easing rates enhancing net interest margins. Consumer discretionary—retail, autos— benefits from rising incomes and urban migration, with festive spending signalling revival. Healthcare, including pharma exports (up 6.5 per cent in 2025), leverages Ayushman Bharat and generics demand. In one of our special reports in this issue, we have covered in detail different sectors that are likely to outperform in the year 2026. 

Risks, Volatility & What Could Go Wrong
No outlook is complete without risks. Domestically, sluggish private capex and AI disruption to IT/BPO (contributing 8 per cent to GDP) could temper growth. Globally, U.S. tariffs on Indian exports (textiles, aquaculture), inflation resurgence, or AI bubble burst pose threats. Rupee weakness erodes returns for foreign investors, potentially extending outflows. 

Behavioural risks: Over-optimism in themes like EVs or green energy could lead to bubbles, while underestimating volatility—evident in 2025's 17 per cent Nifty drawdown— invites reactive selling. Corrections should be viewed as entry points, as in past cycles (e.g., 2020 COVID dip yielding 100 per cent-plus rebounds). Heightened volatility, from geopolitics or policy shifts, underscores diversification. 

Portfolio Strategy for Investors
For 2026, asset allocation favours equities at 50-60 per cent in long-term portfolios, balancing growth with buffers. Prioritise large-caps for stability (reasonable valuations), with 30-25 per cent in Mid-Caps for upside; limit small-caps to 20-15 per cent given premiums. 

A Long-Term Perspective
In a world of contradictions, discipline defines success. 2026, while promising, demands patience: earnings-led gains over liquidity chases. India's journey—from 1991 reforms to today's fourth largest economy in the world—aspires to $5 trillion soon, with equities central to wealth creation. As India continues to rise as a global growth engine, investors should focus on long-term growth and remain adaptable to market conditions. With the right strategy, India will continue to surprise on the upside, offering significant investment opportunities in the years ahead. Markets reward process over prophecy. Stay invested, stay informed—India's structural ascent endures. 

Ashapura Minechem 

CMP (₹): 855.00 

BSE CODE ............................................. 527001
Face Value (₹)..................................... 2
52 Wk. High/Low (₹) ........................ 841.00 / 302.00
Mcap. Full ( ₹ Cr.) ............................... 8,171.78 

Ashapura Minechem is a well-established player in the industrial minerals and chemicals space, with operations spanning mining, manufacturing and trading of a wide range of minerals. The company specialises in products such as Bentonite, Bauxite, Bleaching Earth, Silica, Kaolin and Calcined China Clay, supported by a diversified resource base across India and overseas. Its integrated operations, covering mining, quarrying, processing and value addition, form the backbone of its revenue generation. 

Ashapura’s business model is centred on the extraction and wholesale trading of industrial minerals, with Bentonite, Bleaching Earth and Bauxite accounting for the bulk of revenues. Bentonite contributes about 45 per cent of turnover, followed by Bleaching Earth at 28 per cent and Bauxite at around 7 per cent. Exports form a significant 53.3 per cent of total revenues, highlighting the company’s strong global footprint. Key overseas markets include Guinea, the UAE and Malaysia, while end-user industries range from paints, ceramics and fibreglass to cement, civil engineering and edible oil refining. 

A key strategic pillar for Ashapura is its international expansion, particularly in Guinea’s bauxite sector. The company has invested heavily in Logistics and infrastructure, including the ABB Boffa Port and a dedicated mines-to-port road network spanning nearly 370 kilometres. Once fully operational, the port is expected to handle up to 27 million metric tonnes annually, improving export efficiency for both captive and third-party cargo. Partnerships with global players 

such as China Railway further strengthen Ashapura’s mining, logistics and port operations, enhancing scale, cost efficiency and execution capability. 

Domestically, Ashapura has delivered strong growth momentum, with its India business growing around 25 per cent in FY26 to date. Core segments such as Bentonite, Kaolin and Bleaching Clay continue to perform steadily despite seasonal disruptions caused by the monsoon. Strategic investments in new bentonite mines in Kutch are expected to improve cost competitiveness and expand sales volumes over the medium term. The company is also increasingly focused on value-added applications across oil and gas, foundry and environmental solutions, which offer better margins and customer stickiness. 

The kaolin segment has emerged as another growth driver, particularly for paint, paper and fibreglass applications. The Paddhar Kaolin plant is nearing full capacity utilisation, and Ashapura is evaluating further capacity expansion. Alongside this, investments in R&D and the Information & Knowledge Centre aim to develop new products, improve customer acceptance and support brand-led growth, which could translate into higher margins over time. 

In bleaching clay, Ashapura enjoys a dominant position, with an estimated 70 per cent market share in India, primarily catering to the premium edible oil refining segment. Ongoing debottlenecking and capacity expansion initiatives are expected to reinforce this leadership. The commissioning of a 9 MW Solar power plant linked to the bleaching clay facility is likely to reduce energy costs by at least 20 per cent, supporting margins while advancing sustainability objectives. 

Financially, Ashapura has delivered a strong performance in Q2 and H1 FY26. Consolidated revenue for Q2 FY26 stood at `952.5 crore, up 57 per cent year-on-year, while EBITDA more than doubled, reflecting operating leverage and higher export volumes from Guinea. Profit after Tax rose sharply to `95.51 crore, marking a 184 per cent YoY increase. On a quarter-onquarter basis, revenues and expenses declined due to monsoonrelated seasonality, but profitability remained resilient. 

Looking ahead, Ashapura is well positioned to benefit from sustained demand for industrial minerals, rising infrastructure activity and global aluminium demand. While geopolitical and logistical risks in Guinea remain key monitorables, the company’s investments in infrastructure, diversification across minerals and focus on value-added products provide a solid foundation for sustainable growth. Overall, Ashapura Minechem appears strategically and financially positioned to compound earnings over the medium to long term. 

Ashok Leyland 

CMP (₹): 177.00 

BSE CODE ............................................. 500477
Face Value (₹)..................................... 1 52 Wk.
High/Low (₹) ........................ 177.95 / 95.20
Mcap. Full ( ₹ Cr.) ............................... 1,03,967.23 

Incorporated in 1948, Ashok Leyland Limited (ALL) is the flagship company of the Hinduja Group and one of India’s largest commercial vehicle manufacturers, operating across the full spectrum of medium & heavy commercial vehicles (M&HCVs), light commercial vehicles (LCVs), buses, Defence mobility solutions, and power solutions. The company’s integrated business model spans manufacturing, after-sales support, exports, defence engines, and financial services through its subsidiary entities. Ashok Leyland operates two primary segments: Commercial Vehicles and Financial Services. Its product range includes trucks, buses, LCVs, and spare parts, supported by one of the industry’s widest service networks. The company is actively expanding into alternative powertrains, including electric buses, hydrogen ICE, CNG, LNG, and battery-electric platforms, supported by its Switch Mobility operations and eMaaS offerings. 

In Q2 FY26 (September 2025), Ashok Leyland posted revenue of ₹12,577 crore, marking a healthy 13 per cent increase over ₹11,148 crore in the same quarter last year and a 7 per cent rise compared to ₹11,709 crore in Q1 FY26. Operating profit rose to ₹2,441 crore, up from ₹2,040 crore a year ago and ₹2,173 crore in the previous quarter. As a result, operating margins remained strong at 19 per cent, improving from 18 per cent last year and staying flat sequentially. 

Profit before tax came in at ₹1,124 crore, slightly higher than ₹1,078 crore last year and significantly better than ₹891 crore in the June quarter, reflecting improved operating performance. Net profit also showed steady growth at ₹820 crore, compared with ₹767 crore last year and ₹658 crore in the previous quarter. Earnings per share increased to ₹1.29, up from ₹1.20 year-on 

year and ₹1.04 quarter-on-quarter. Overall, the Q2 results indicate consistent improvement on both a yearly and quarterly basis, supported by higher revenues, stronger profitability, and stable margins, reinforcing the company’s positive growth momentum. 

The company is well positioned for steady and profitable growth, driven by a clear shift toward premium products and stronger demand across key segments. New platform launches and premiumisation in medium and heavy trucks as well as LCVs are expected to improve product mix and margins. Bus demand is seeing a strong recovery, supported by state transport orders, higher buying by private operators, and rising intercity travel, with capacity expansion in Lucknow and Andhra Pradesh helping meet this demand. 

The company is also benefiting from higher traction in noncyclical and higher-margin businesses such as buses, LCVs, spares, power solutions, defence, and exports, which now contribute nearly half of revenues. Structurally lower breakeven levels mean that even moderate volumes are translating into healthier profits, while a tighter working-capital cycle supports cash flows. 

Premium launches such as 320/360 HP trucks with better torque, along with a growing LCV portfolio led by Saathi and upcoming bi-fuel models, should aid market share gains. Exports are scaling well with strong margins and a targeted ~20 per cent CAGR. Over the long term, Switch Mobility and alternative fuel initiatives across EV, CNG, LNG, and hydrogen add strategic optionality, while easing commodity costs and a sustained focus on mid-teen EBITDA margins provide further earnings upside. The company is currently trading at a PE of 30.5x, which is lower when compared with its industry PE of 40.4x. The company's interest coverage ratio is 2.14x. The PEG ratio of the company is 0.11, which also makes it attractive. Further, the company has achieved compounded sales growth of 23 per cent during the last 3 years, whereas the compounded profit growth is around 284 per cent during the last 3 years. The company also has a dividend yield of 2.14 per cent. 

Ashok Leyland plans to capitalise on upcoming M&HCV and LCV launches, expand export footprints, and accelerate investments in EV and hydrogen mobility. The company continues to target mid-teen EBITDA margins, supported by better mix, scale efficiencies, and tight cost control. Overall, the strategic thrust on diversification, technology investments, and international markets positions the company favourably for sustained growth over the medium term. Considering the recent years' performance and good future growth of the industry, we recommend our subscribers a BUY. 

CarTrade Tech 

CMP (₹): 2,901.00 

BSE CODE ............................................. 543333
Face Value (₹)..................................... 10
52 Wk. High/Low (₹) ........................ 3,291.35 / 1,296.80
Mcap. Full ( ₹ Cr.) ............................... 13,864.97 

CarTrade Tech is a multi-channel, asset-light digital marketplace that spans the full lifecycle of new and pre-owned vehicles and a broad range of used products in India. The company operates across three reportable segments— Consumer, Remarketing, and Classifieds (OLX India)—each addressing a distinct part of the automotive and used-goods value chain while benefiting from shared technology, data, and network effects. The Consumer segment anchors CarTrade Tech’s presence in automotive discovery and transactions. Platforms such as CarWale, CarTrade, BikeWale, and Mobility Outlook enable customers to research, buy, and sell new and used cars and two-wheelers, while simultaneously connecting dealers, OEMs, and auto-finance and insurance partners. 

The Remarketing segment comprises Shriram Automall, CarTrade Exchange, and Adroit Auto. This business focuses on phygital auction platforms and inspection and valuation services across cars, two-wheelers, commercial vehicles, and Construction and farm equipment. Its core customers include banks, NBFCs, captive financiers, insurers, fleet operators, and dealers seeking efficient disposal and discovery of used assets. In FY25, the segment generated ₹212 crore of revenue, supported by around 14 lakh auction listings conducted through a network of 135 Automalls across the country. The scale, physical footprint, and trusted auction process provide strong entry barriers and recurring transaction flows. 

The Classifieds segment is represented by OLX India, the country’s largest used-goods classifieds platform spanning 12 categories, including automobiles, real estate, mobiles and 

electronics, furniture, and household goods. The platform is monetised primarily through advertising and premium listing solutions. In FY25, this segment contributed ₹192 crore of revenue, underlining the enduring relevance of classifieds in India’s value-conscious, reuse-oriented consumer ecosystem. 

These businesses are well aligned with broader structural trends in India’s retail and digital economy. India’s retail market, valued at roughly US$1.06 trillion in 2024, is projected to reach nearly US$1.93 trillion by 2030, implying a nominal CAGR of about 10 per cent. Rising incomes, increasing formalisation of consumption, and rapid urbanisation are reshaping buying behaviour. Within this landscape, used-goods platforms and vertical digital marketplaces are emerging as some of the most structurally attractive segments of e-commerce. The usedproducts market alone is estimated at around US$78 billion annually, with over 180 million consumers participating in used-goods transactions each year. Vertical marketplaces benefit from repeat usage, limited logistics intensity, and favourable EBITDA profiles, offering superior economics compared with broad-based e-retail models. 

CarTrade Tech’s financial performance in FY25 reflects these tailwinds as well as disciplined execution. Net sales rose to about ₹641 crore from ₹490 crore in FY24, while total income crossed ₹711 crore. Profit after tax increased sharply to nearly ₹145 crore from ₹82 crore a year earlier. Importantly, this growth builds on a multi-year turnaround. From losses in FY22, the company has scaled efficiently, delivering an approximate 27 per cent annual increase in revenue between FY22 and FY25, while PBIDT swung from negative territory to over `220 crore in FY25. 

The latest quarter reinforced this momentum. Net sales reached nearly ₹193 crore, rising close to 12 per cent sequentially and over 25 per cent year-on-year. PAT climbed to around ₹64 crore, up 36 per cent quarter-on-quarter and more than double the level seen in the same period last year. Margins expanded meaningfully as costs remained largely stable, allowing incremental revenue to flow through to profits. Management commentary highlighted stronger EBITDA growth, improved monetisation across consumer and dealer platforms, and better operating discipline. 

At a current valuation of around 71 times earnings, the stock appears optically expensive. However, with a PEG ratio below one based on trailing twelve-month profits, strong growth visibility, and a large addressable market, CarTrade Tech continues to stand out as a scalable, asset-light digital platform positioned to benefit from India’s evolving used-goods and automotive ecosystem. 

Eureka Forbes 

CMP (₹): 631.00 

BSE CODE ............................................. 543482
Face Value (₹)..................................... 10
52 Wk. High/Low (₹) ........................ 655.90 / 451.60
Mcap. Full ( ₹ Cr.) ............................... 12,198.94 

Eureka Forbes has long been a familiar name in Indian households, built on a legacy of trust in health and hygiene products. With over four decades of operating history and an installed customer base of nearly 1.4 crore, the company today stands at an important inflection point. What was once primarily known for water purifiers and vacuum cleaners is now being reshaped into a multi-product, omni-channel, direct-to-consumer health and hygiene player, supported by one of the strongest service networks in the country. 

The company’s portfolio spans water purifiers, vacuum cleaners, air purifiers, water softeners and a growing suite of services. Its distribution footprint is diversified across direct sales, general trade, modern retail, e-commerce platforms and its own D2C channels. This wide reach, combined with a strong after-sales service backbone, provides Eureka Forbes with a competitive edge that is difficult to replicate. 

FY25 marked a decisive year in the company’s turnaround and growth journey. Revenue grew by 11.31 per cent year-on-year to ₹2,436.91 crore, reflecting steady demand across product categories. More impressive, however, was the sharp improvement in profitability. EBITDA surged by 35.06 per cent to ₹280.15 crore, while net profit jumped by a robust 71.89 per cent to ₹164.41 crore. This divergence between revenue growth and profit growth clearly highlights operating leverage kicking in, aided by better cost controls, an improving product mix and higher contribution from services. 

The momentum has continued into FY26. In Q2 FY26, revenue rose 14.7 per cent year-on-year to ₹772.08 crore, while 

sequential growth stood at a strong 27 per cent. EBITDA excluding other income increased by 33.65 per cent year-onyear, and the adjusted EBITDA margin expanded to 13.1 per cent, marking a 162 basis point improvement over the same period last year. Net profit for the quarter came in at ₹62.92 crore, up nearly 32 per cent year-on-year and over 62 per cent sequentially, underscoring the consistency of earnings growth. 

Operationally, multiple growth engines are now working in tandem. The product business delivered high-teens growth, led by water purifiers, where the scaled adoption of the two-year filter life range has helped drive penetration. Importantly, nearly 70 per cent of buyers in this segment were first-time category users, indicating successful market expansion rather than mere replacement demand. The cleaning segment has emerged as another key driver, with robotics now accounting for close to 60 per cent of total vacuum cleaner sales. The premiumisation trend across water purifiers and robotics is also supporting margin expansion. 

The service business has added further stability and visibility to earnings. Annual maintenance contract bookings recorded strong double-digit growth, supported by both higher volumes and better realisations. A growing mix of multi-year AMCs is improving customer retention and lifetime value, while the filters business is benefiting from deeper penetration into the large out-of-warranty customer base. 

From a strategic standpoint, management remains confident of sustaining growth despite a challenging macro environment. The focus continues to be on category creation by improving awareness, affordability and availability, while strengthening brand affinity. The opportunity size remains significant, with water purifier penetration in India still at just 6–6.5 per cent, and air purifiers and advanced cleaning products at a much earlier stage of adoption. 

While the company is prepared to roll out a rental or subscription model for water purifiers, this is not being pushed as an immediate priority, given the long runway available in the core product and service business. Margin expansion also remains on track, supported by stable gross margins, operating leverage, vendor renegotiations, product design efficiencies and IT cost optimisation. 

Overall, Eureka Forbes appears well placed to deliver sustained double-digit growth with improving profitability. Its integrated transformation across products, services and digital capabilities strengthens its long-term business model, making the current phase one of both operational consolidation and renewed growth ambition. 

Lupin 

CMP (₹): 2,123.00 

BSE CODE ............................................. 500257
Face Value (₹)..................................... 2
52 Wk. High/Low (₹) ........................ 2,403.45 / 1,774.00
Mcap. Full ( ₹Cr.) ............................... 97,119.99 

Lupin is a global, research-driven pharmaceutical company with a diversified presence across branded and generic formulations, complex generics, biosimilars, and Active Pharmaceutical Ingredients (APIs). Founded in 1968, the company has evolved into a fully integrated pharmaceutical enterprise with 33 subsidiaries spanning the United States, Europe, India, Latin America, Australia, and the Asia-Pacific region. Formulations form the backbone of Lupin’s business model, accounting for nearly 95 per cent of consolidated revenue in FY2025, while APIs contribute the remaining 5 per cent. The company addresses a broad range of therapeutic areas, including cardiovascular, anti-diabetic, respiratory, gastrointestinal, antiinfective, and central nervous system disorders, while progressively expanding into higher-value specialty segments. 

A key strategic thrust in recent years has been Lupin’s push into specialty pharmaceuticals, particularly ophthalmology. This ambition is reinforced by its 2025 agreement to acquire VISUfarma B.V., a Europe-based specialty ophthalmic company, which significantly strengthens Lupin’s footprint in Italy, Spain, and the UK. The acquisition enhances the company’s access to differentiated products, branded prescriptions, and physician relationships in regulated European markets, supporting both growth and margin expansion over the medium term. 

Lupin’s revenue base is well diversified geographically. In FY2025, the United States contributed about 38 per cent of total revenue, where Lupin ranks as the third-largest pharmaceutical company by prescriptions. India accounted for 34 per cent, positioning the company among the top eight domestic players. Other developed markets, including Canada, Europe, and Australia, contributed 13 per cent, while emerging markets such as Latin America, South Africa, and the Philippines accounted for around 11 per cent. This geographic spread reduces dependence on any single market and provides resilience against region-specific pricing or regulatory shocks. 

The industry backdrop remains supportive over the long term. Global pharmaceutical spending is expected to reach approximately US$2.4 trillion by 2029, growing at a 5–8 per cent CAGR, while medicine consumption is projected to rise from 3.56 trillion to 3.71 trillion defined daily doses between 2024 and 2029. Profit pools are concentrated in regulated markets, with the U.S. pharmaceutical market valued at US$487 billion in 2024 and expected to grow at 3–6 per cent through 2030. India’s pharmaceutical market stood at US$50 billion in FY2023–24, split between US$23.5 billion domestically and US$26.5 billion in exports, with exports rising to US$30.47 billion in FY2024– 25. Collectively, this implies a global addressable market of around US$1.6 trillion today, expanding to US$2.4 trillion by 2029, and an India-linked formulations and generics opportunity of roughly US$80 billion. 

Lupin’s forward growth is anchored in a materially stronger U.S. franchise, a recovering India business, and an expanding specialty and biosimilars pipeline. In North America, exclusivity for Tolvaptan has driven quarterly sales to record levels. Even as this benefit normalises, management expects the U.S. business to sustain a run-rate above US$1 billion. The product mix is steadily shifting toward high-barrier respiratory products, complex injectables, and long-acting formulations, supported by launches such as generic Spiriva, Victoza, and Risperdal Consta. Biosimilars are expected to begin contributing meaningfully from FY27, creating an additional growth engine. 

Financial performance underscores this strengthening trajectory. Net sales increased from about ₹15,163 crore in FY21 to roughly ₹22,708 crore in FY25, implying a 10–11 per cent CAGR, while PAT expanded from around ₹1,227 crore to ₹3,306 crore, translating into a robust 28 per cent CAGR despite a loss in FY22. In the latest quarter, net sales of about ₹7,048 crore grew 12 per cent sequentially and 24 per cent year-on-year. Operating margins expanded sharply, with PBIDT of around ₹2,341 crore and PAT of approximately ₹1,485 crore, reflecting strong operating leverage. 

At a valuation of around 22.5 times earnings, below the industry average of 30.7 times, and with a PEG ratio below one, Lupin offers an attractive risk-reward profile, supported by visible growth drivers and improving profitability. 

National Aluminium Company 

CMP (₹): 290.00 

BSE CODE ............................................. 532234
Face Value (₹)..................................... 5
52 Wk. High/Low (₹) ........................ 292.75 / 140.00
Mcap. Full ( ₹ Cr.) ............................... 53,308.24 

Founded in 1981 and based in Bhubaneswar, Odisha, National Aluminium Company Limited (NALCO) is a Navratna Central Public Sector company operating under the Ministry of Mines, Government of India. The company is one of India’s most fully integrated aluminium producers, with business operations covering the entire value chain, starting from bauxite mining and alumina refining to aluminium SMElting and captive power generation facilities. 

With the Government of India holding a 51.28 per cent stake, NALCO plays an important and strategic role in the country’s non-ferrous metals sector. It is globally recognised as one of the lowest-cost producers of alumina and bauxite, reflecting its strong operational efficiency and cost discipline. A meaningful portion of the company’s production is exported, allowing it to serve international markets while maintaining a balanced domestic presence. At the same time, NALCO places strong emphasis on sustainability, increased use of renewable energy, and continuous cost optimisation, which supports long-term competitiveness and responsible growth. 

National Aluminium Company’s consolidated performance for Q2 FY26 reflects a healthy improvement across key financial metrics. During the quarter, the company reported total income of ₹4,444 crore, registering a year-on-year growth of about 9 per cent compared to ₹4,073 crore in the same period last year, supported by higher net sales and improved other income. Revenue from operations increased to ₹4,292 crore, indicating steady demand conditions. Operating efficiency improved meaningfully, with EBITDA rising sharply by 28 per cent year-on-year to ₹2,077 crore, aided by lower operating expenses and better cost control. This led to a strong 

improvement in profitability. 

Profit before tax (PBT) stood at ₹1,895 crore, up nearly 32 per cent from last year, reflecting stronger operating performance and stable costs. Profit after tax (PAT) also increased significantly to ₹1,433 crore, marking a healthy growth of about 35 per cent on a year-on-year basis. Overall, the Q2 FY26 results highlight improved earnings quality, better margins, and strong operational leverage, positioning the company on a stable and improving financial footing. 

The company’s growth outlook is supported by a mix of volume expansion, cost control, and sustainability-led initiatives. A higher focus on domestic alumina sales is helping the company diversify its market exposure and benefit from India’s steadily rising aluminium demand, which also provides better volume stability during weak global cycles. On the cost side, the company is improving operational efficiency by reducing caustic soda consumption, increasing the use of in-house coal, and rationalising manpower, all of which are expected to protect margins over the medium term. Capacity utilisation across plants remains close to optimal, and the upcoming fifth stream expansion should enable incremental volumes to flow through with limited additional costs. In addition, fresh capacity additions in the smelting segment, along with logistics improvements such as the conveyor project, are likely to enhance scale efficiencies while also lowering the overall environmental footprint. The alumina refinery expansion is expected to add new volumes once commercial production begins, supporting topline growth and improving operating leverage. Further, planned wind and solar capacity additions should strengthen ESG performance and gradually reduce blended energy costs, improving long-term sustainability and earnings resilience. 

The company is currently trading at a PE of 8.3x, which is lower when compared with its industry PE of 20.4x. Moreover, its 3-year median PE is 13x. The company's Interest coverage ratio is 122x. The PEG ratio of the company is 0.39, which also makes it attractive. Further, the company is virtually a debt free company. Over the last three years, the company has achieved compounded sales growth of about 6 per cent, with compounded profit growth of 21 per cent. The company also has a high dividend yield of 3.77 per cent. With integrated operations, raw material security, cost efficiency initiatives, and upcoming capacity expansions, the company is well-positioned to navigate macro headwinds and deliver sustainable growth. Global and domestic aluminium demand remains strong, while operational excellence and disciplined capex will support long-term profitability. Considering the recent years performance, and a good future growth of the industry we recommend our subscribers a BUY. 

Persistent Systems 

CMP (₹): 6,570.00 

BSE CODE ............................................. 533179
Face Value (₹)..................................... 5
52 Wk. High/Low (`) ........................ 6,788.80 / 4,163.80
Mcap. Full ( ₹ Cr.) ............................... 1,03,529.75 

Persistent Systems is a global digital engineering and enterprise modernisation company that has steadily evolved from a conventional IT services provider into a high-growth, innovation-led partner for global enterprises. The company focuses on designing, building and modernising software products and platforms, with a sharpened go-tomarket strategy around AI-enabled software engineering, digital product development, data and analytics, cloud transformation, customer experience (CX) modernisation and intelligent automation. 

In FY25, Persistent’s revenue profile remained firmly anchored in software-enabled product engineering and design and R&D services, which accounted for nearly 95 per cent of total turnover. The remaining 5 per cent came from IP-led offerings such as licence income, royalties, AMC revenues and customisation. This mix places Persistent closer to clients’ core product and innovation roadmaps, unlike traditional IT players that remain heavily dependent on legacy application maintenance. 

Operationally, the company reports revenues across three key verticals. Banking, Financial Services and Insurance (BFSI) contributed ₹3,770.97 crore in FY25; Healthcare and Life Sciences generated ₹3,255.15 crore; while Technology Companies and Emerging Verticals delivered ₹4,912.6 crore. This translates into a diversified revenue mix of roughly 32 per cent BFSI, 27 per cent healthcare and 41 per cent technology and emerging industries, providing both stability and exposure to faster-growing digital segments. 

Geographically, Persistent remains a largely export-led 

business, with exports accounting for around 91 per cent of revenues. North America dominates the mix, contributing over 80 per cent, followed by India and the rest of the world. Client concentration is moderate, with the top customer accounting for just over 10 per cent of revenues and the top ten together contributing about 41 per cent in FY25, offering a reasonable balance between scale and diversification. 

The broader industry environment remains supportive. India’s services exports continue to show steady growth, while global IT spending is projected to rise, driven by AI adoption, cloud migration, cybersecurity, data engineering and ER&D work. Importantly, enterprises are reallocating budgets from legacy IT maintenance to AI-led productivity initiatives and cloudnative modernisation. While discretionary spending scrutiny and longer decision cycles persist, especially for large transformation deals, the structural trend towards higher digital and engineering spend remains intact. 

Against this backdrop, Persistent’s near-to-medium-term growth outlook appears well anchored. Management commentary indicates that the company has moved beyond experimentation in generative AI, with clearer monetisation pathways emerging across BFSI, software and hi-tech, and healthcare. Execution visibility is supported by a strong Order Book, with Q2 FY26 total contract value exceeding US$600 million and new annual contract value additions of US$254 million. Management has reiterated its aspiration to reach US$2 billion in revenues by the end of FY27, signalling confidence in demand visibility and continued investment in IP creation, partnerships and talent despite a cautious macro environment. 

Financial performance in the latest quarter reflects improving operating leverage. Net sales of ₹3,580.72 crore recorded healthy sequential and year-on-year growth, while costs increased at a slower pace, enabling margins to expand to just over 19 per cent. Net profit growth outpaced revenue growth, supported by efficiency gains, a favourable offshore delivery mix and currency tailwinds. Over the last four years, the company has nearly tripled its revenues, while profits have grown even faster, highlighting sustained margin expansion and scale benefits. 

Persistent trades at a premium valuation compared with traditional IT services peers, reflecting its superior growth profile, higher exposure to digital engineering and AI-led work, and improving return ratios. While the valuation may appear demanding on headline multiples, it is supported by faster revenue growth, strong earnings visibility, and a gradual shift towards higher-value, repeatable and platform-led revenues. 

PNB Housing Finance 

CMP (₹): 936.00 

BSE CODE ............................................. 540173
Face Value (₹)..................................... 10
52 Wk.High/Low (₹) ........................ 1,141.85 / 746.10
Mcap. Full ( ₹ Cr.) ............................... 24,382.30 

PNB Housing Finance Ltd. (PNBHFL) is a depositaccepting housing finance company that has strategically positioned itself as a focused retail mortgage lender. In recent years, the company has deliberately scaled down its large-ticket wholesale exposures, opting instead to concentrate on building a high-quality, retail-centric loan portfolio. This repositioning has allowed PNBHFL to strengthen its risk profile while tapping into the growing demand for housing finance across urban and semi-urban India. 

The company’s loan book is diversified across three key segments: Prime Housing, Affordable Housing, and Emerging Markets. While Prime Housing primarily serves salaried and self-employed borrowers in urban centres, the Affordable and Emerging Markets segments have emerged as the primary growth engines, delivering higher yields and broader outreach. These segments focus on first-time homebuyers and selfemployed individuals, particularly in Tier-2, Tier-3, and semiurban regions, where housing finance penetration remains comparatively low. PNBHFL’s strategy of blending urbanfocused prime lending with high-growth, underserved markets enables it to balance risk and return effectively. With a strong emphasis on retail mortgage lending, the company is wellplaced to capitalise on India’s expanding housing demand while steadily improving profitability and market share. 

PNB Housing delivered a strong operational performance in Q2 FY26, reflecting improving profitability on a stable revenue base. Net sales stood at ₹2,127.86 crore, up 2.49 per cent QoQ and 13.26 per cent YoY. PBIDT rose to ₹2,040.27 crore, registering 5.65 per cent QoQ and 17.52 per cent YoY growth. Profit after tax increased to ₹581.59 crore, growing 9.01 per 

cent QoQ and 23.83 per cent YoY. PAT margin improved to 27.33 per cent from 25.70 per cent in the previous quarter, while adjusted EPS rose to ₹22.33 from ₹20.51, underscoring operating leverage and cost discipline. 

On an annual basis, FY25 marked a clear step-up versus FY24. Net sales grew 8.73 per cent YoY to ₹7,665.35 crore, while PBIDT increased 13.20 per cent YoY to ₹7,093.06 crore. PAT rose sharply by 28.39 per cent YoY to ₹1,936.14 crore, aided by lower operating costs, with total expenditure declining 24.32 per cent YoY to ₹598.57 crore. Over FY22–FY25, PAT has compounded at ~32 per cent, compared with net sales CAGR of ~7 per cent, highlighting a profitability-led turnaround driven by better asset quality and cost control. 

Business momentum remains healthy, with retail disbursements of about ₹5,995 crore and a retail loan book of ₹79,771 crore, up 15 per cent YoY. Asset quality has continued to improve, with gross NPA moderating to 1.04 per cent. Borrowing costs eased to 7.69 per cent, keeping spreads stable at 2.26 per cent, while NIM remained range-bound around 3.6–3.7 per cent. PNB Housing has positioned FY26 as a key execution year focused on retail-led compounding and a favourable product mix shift. Management has reiterated retail asset growth guidance of ~17–18 per cent, providing near-term visibility. Affordable and Emerging segments are the primary growth engines, having grown 34 per cent YoY and contributing 38 per cent of the retail book, while accounting for nearly 50 per cent of retail disbursements in Q2 FY26. 

Branch expansion is another catalyst, with 356 branches currently and plans to add 40–50 branches annually, particularly in underpenetrated regions such as Punjab, Chandigarh, and the Northeast. A measured restart of the corporate book, currently small at `332 crore, offers incremental upside without diluting underwriting standards. Recoveries from the write-off pool and ECL releases also provide near-term earnings support, aiding credit costs. 

The appointment of a seasoned Managing Director and CEO with over three decades of mortgage industry experience further strengthens leadership continuity and execution confidence. PNB Housing currently trades at a P/B of ~1.30x, below the industry median of ~1.5x, despite delivering an improving return profile with ROE of 12.3 per cent and ROA of 2.52 per cent. With loan growth guidance intact, asset quality expected to remain range-bound around 1 per cent, and visibility on low credit costs over the next few quarters, valuation comfort appears reasonable. Supported by a retail-led growth model, improving profitability, and stable leadership, we recommend a BUY on the scrip. 

Polycab India 

CMP (₹): 7,592.00

BSE CODE ............................................. 542652
Face Value (₹)..................................... 10
52 Wk. High/Low (₹) ........................ 7,899.50 / 4,557.45
Mcap. Full ( ₹ Cr.) ............................... 1,14,413.00 

Polycab India Ltd. (PIL) stands as India’s largest organised manufacturer of wires and cables, commanding a dominant 26-27 per cent market share in the organised segment. The company’s growth and market leadership are underpinned by strong execution capabilities, disciplined capital allocation, and robust brand recall, which have helped it create a pan-India presence. 

Polycab has developed an extensive distribution network comprising over 4,600 dealers and 2.5 lakh retailers, complemented by exports to more than 80 countries, reinforcing its global footprint. 

The Wires & Cables (W&C) segment continues to be the cornerstone of Polycab’s business, contributing around 84 per cent of revenue in FY25. Within this segment, the company benefits from its wide product portfolio, catering to industrial, commercial, and residential requirements, while steadily expanding into high-growth urban and semi-urban markets. 

Alongside W&C, the Fast-Moving Electrical Goods (FMEG) and Engineering, Procurement & Construction (EPC) businesses provide diversification, serving as incremental growth levers and reducing Reliance on a single segment. 

With a strong brand, robust distribution, and a diversified product mix, Polycab India is well-positioned to capitalise on India’s growing infrastructure and electrification demand, while continuing to deliver steady revenue growth and operational efficiency. 

For FY25, Polycab reported all-time-high financials, with net sales rising about 24 per cent YoY to ₹22,408 crore. EBITDA margins stood at 13.2 per cent, while PAT grew to ₹2,020 crore. Over FY21–FY25, revenue and PAT compounded at ~26 per cent and ~23 per cent respectively, underscoring the company’s structural growth strength. 

The W&C segment grew 18 per cent YoY, gaining nearly 1 percentage point of organised market share, while FMEG revenues rose 29 per cent YoY, driven by premiumisation and strong traction in BLDC fans, LEDs, and solar products. EPC revenue surged 143 per cent YoY, supported by a healthy order book of ~₹7,000 crore under schemes like RDSS. 

India’s ₹90,000 crore wires and cables market is expected to grow at 1.5–2x GDP, driven by infrastructure capex, renewable energy, urbanisation, data centres, and EV-related investments. Polycab is well-positioned to outgrow the industry under its five-year roadmap, Project Spring (FY25–FY30). The company plans `6,000–8,000 crore of capex, fully funded through internal accruals, with no balance sheet stress. 

Key growth drivers include capacity expansion in extra-highvoltage (EHV) cables, reorganisation of the W&C business into focused verticals, rising exports under the China+1 theme, and margin expansion in FMEG as scale improves. 

Management targets W&C growth at ~1.5x industry rates, FMEG growth at 1.5–2x industry with margins improving to 8–10 per cent, and exports exceeding 10 per cent of revenue by FY30. A rising dividend payout ratio, targeted at over 30 per cent by FY30, further enhances shareholder returns. 

At the current price of `7,088, Polycab trades at a P/E of 43.4x, below its three-year median of 47.7x, and an EV/ EBITDA of ~28x. While valuations appear premium, they are supported by strong fundamentals, high return ratios (ROCE ~29.7 per cent, ROE ~21.4 per cent), negligible leverage, and management’s guidance of 20–22 per cent EPS CAGR. The PEG ratio of 1.48x suggests valuation comfort rather than excess. 

Polycab exemplifies disciplined industrial compounding, combining sector leadership, self-funded growth, strong cash flows, and rising payouts. With clear growth visibility from infrastructure, energy, and housing tailwinds, and prudent capital allocation under Project Spring, we believe Polycab offers an attractive long-term investment opportunity. 

We recommend a BUY on the scrip. 

Union Bank of India 

CMP (₹): 153.00

BSE CODE ............................................. 532477
Face Value (₹)..................................... 10
52 Wk. High/Low (₹) ........................ 160.10 / 100.75
Mcap. Full ( ₹ Cr.) ............................... 1,16,603.33 

Union Bank of India (UBI) stands as one of the country’s most prominent public sector banks, with enduring relevance in India’s financial ecosystem. Headquartered in Mumbai, the bank boasts a pan-India presence that features a network of more than 8,600 branches, nearly 9,000 ATMs, and over 23,500 business correspondents, enabling it to serve customers across urban, semi-urban and rural markets with deep penetration and accessibility. As a Government of India-owned entity, Union Bank plays a strategic role in advancing financial inclusion, priority sector lending, MSME financing, agricultural credit and infrastructure funding. Over recent years, it has undergone a notable transformation, focusing on balance-sheet clean-up, strengthening asset quality, improving profitability and accelerating digital modernisation to align with evolving customer expectations and regulatory directives. 

Union Bank’s approach balances traditional banking strengths with modern digital innovations. It has rolled out its Vyom mobile banking platform, which integrates a range of capabilities from account management and payments to personalised offers and consolidated customer views. The redesigned Vyom 2.0 app significantly enhances usability, bringing dynamic home-screen designs, quick access to payment methods and integrated features such as Account Aggregator tools—all aimed at improving customer engagement and retention. 

FY2024-25 marked a landmark financial year for Union Bank, with the bank reporting its highest ever annual net profit. The bank reported a net profit of ₹17,987 crore, registering a strong 32 per cent year-on-year growth, driven by robust earnings 

across interest and non-interest streams as well as improved operational efficiency. 

The bank’s operating profit reached ₹31,090 crore, reflecting a 10 per cent year-on-year increase; indicative of sustained core profitability supported by disciplined cost management and wider spreads in interest income. Profitability ratios improved meaningfully. Return on Assets (RoA) increased to around 1.26 per cent and Return on Equity (RoE) rose to 17.2 per cent, highlighting enhanced capital efficiency. Asset quality strengthened further, with Gross NPA declining to 3.60 per cent and Net NPA to 0.63 per cent, backed by a healthy Provision Coverage Ratio of 94.6 per cent. Capital adequacy remained robust, with a CRAR of 18.02 per cent and CET-1 ratio of 14.98 per cent, providing ample buffer for future growth while complying with regulatory requirements. On the balance sheet front, Union Bank continued to expand its business footprint, with total deposits reaching approximately ₹13.1 lakh crore and advances at around ₹9.8 lakh crore, driving aggregate business to nearly ₹22.9 lakh crore. This robust balance sheet supports the bank’s ambition to grow responsibly while absorbing macroeconomic fluctuations. 

The bank’s strategic priorities centre on risk-adjusted, sustainable growth rather than aggressive expansion. Management has underlined its focus on granular growth through retail, MSME, agriculture and priority sector lending. Union Bank is actively rebalancing its loan mix towards RAM segments (Retail, Agriculture, MSME) to lift yields and diversify risk, while reducing exposure to low-yielding, bulk institutional assets. 

Furthermore, digital banking continues to be a core pillar of future growth. Union Bank’s continuous upgrades to Vyom, coupled with enhanced digital lending journeys, reflect a commitment to leverage data analytics and AI-enabled automation; a priority shared across top Indian banks. These initiatives aim to simplify customer journeys, improve operational productivity and deepen engagement across all customer cohorts. 

Union Bank also aligns its strategy with national priorities such as financial inclusion, green financing and women-centric banking. Its participation in financial inclusion initiatives ensures banking access to underserved populations, thereby supporting broader economic empowerment and equitable growth. Looking ahead, the outlook for Union Bank of India remains constructively positive. Backed by macroeconomic stability, regulatory support, prudent risk management and a solid capital base, the bank is well positioned to sustain steady earnings growth, strengthen asset quality and enhance shareholder value in the medium term. 

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