Indian investors bet on earnings revival to spot new winners in 2026

Nifty earnings are expected to grow by around 16 per cent in the next fiscal year beginning April 1, nearly double the growth estimated for the current year, according to ICICI Securities Ltd

By Savio Shetty and Alex Gabriel Simon

 

Indian investors are positioning for a revival in earnings growth to identify new winners in 2026, after local equities lagged most Asian peers this year.

 

The NSE Nifty 50 Index has climbed about 11 per cent in 2025, trailing the MSCI AC Asia Pacific Index by the widest margin since 1998. That underperformance may reverse in the New Year as lower consumption-tax rates and interest-rate cuts help lift corporate profits, analysts say. 

 

Nifty earnings are expected to grow by around 16 per cent in the next fiscal year beginning April 1, nearly double the growth estimated for the current year, according to Mumbai-based broker ICICI Securities Ltd.

 

“The next two quarters of earnings will be better than the previous ones,” said Kunal Shah, a fund manager at Carnelian Asset Management & Advisors. He favors banks, automakers and auto-parts makers, as well as capital goods companies linked to India’s expanding power and infrastructure sectors.

 

Still, a prolonged period of rupee weakness may discourage foreign investors, who have pulled a record $17.3 billion from Indian equities this year. The currency is Asia’s worst performer in 2025, eroding returns for overseas buyers, amid a delay in India-US trade deal. 

 

Here’s a look at some of the key winners and losers of 2025: 

Winners

State-Run Banks

 

State-owned lenders were among 2025’s standout performers, supported by stronger profitability, cleaner balance sheets and accelerating credit growth. The Nifty PSU Bank Index was the top-performing sectoral gauge, with Canara Bank Ltd., Indian Bank, and Bank of India each rising more than 40 per cent, while the nation’s biggest State Bank of India gained 23 per cent. Investors rewarded improvements in asset quality, operating efficiency and digital adoption.

 

Commodities in Vogue

 

Commodity stocks also delivered strong gains. The NSE Nifty Metal Index advanced more than 20 per cent, led by Hindustan Copper Ltd.’s surge on a global copper rally. Hindustan Zinc Ltd. climbed over 30 per cent amid rising silver prices, while infrastructure spending and the government’s green-transition push further bolstered the sector’s appeal.

 

Autos Shine

 

Auto stocks rallied as well, with the NSE Nifty Auto Index ranking among the year’s best performers. A rebound in vehicle sales, helped by goods-and-services tax cuts and easing supply-chain bottlenecks, lifted the sector. Improved consumer sentiment, margin recovery and rising investment in electric mobility added to the momentum. Maruti Suzuki India Ltd., the country’s largest carmaker, surged more than 50 per cent this year, while Hero MotoCorp Ltd. climbed 37 per cent. 

Losers

Exporters Hit 

 

Export-oriented sectors such as pharmaceuticals and information technology lagged peers as US tariffs and slowing overseas demand weighed on earnings. Both sectors underperformed broader benchmarks as clients in the US and Europe tightened spending, pressuring margins and delaying new projects. Tata Consultancy Services Ltd. is down about 19 per cent, while Infosys Ltd. and Wipro Ltd fell about 10 per cent. 

 

Realty Bites

 

After a stellar 34 per cent rally in 2024, the NSE Nifty Realty Index slid more than 15 per cent this year as rising input costs for cement and steel eroded margins and stretched valuations prompted investors to turn cautious. Anant Raj Ltd. and Brigade Enterprises Ltd. led the declines, each tumbling more than 30 per cent.

 

Media Companies 

 

Media companies were among the worst performers on the Nifty this year as advertising revenues weakened and content costs climbed, squeezing profitability. Network18 Media & Investments Ltd. fell about 40 per cent this year, followed by music companies Tips Music Ltd. and Saregama India Ltd., which also posted sharp losses.