Investors eyeing India’s next few years should focus on a few clear themes – a softer rupee, steady retail expansion, AI‑driven IT services and a revival in commercial vehicles.
Currency Outlook
The Indian rupee slipped past the 91 per US dollar mark in December 2025, a decline of about 5.5% for the year. The move has been gradual, making it one of the slowest depreciations in the last 15 years. The slide is mainly due to weaker foreign capital flows and speculative bets, not because India’s domestic economy is weakening.
Stock Picks to Watch
- DMart (Avenue Supermarts): Continues rapid store openings (15‑20% yearly) aiming for around 2,200 outlets. Physical retail still dominates urban buying, with quick‑commerce expected to stay under 20% of consumption even by FY35. Private‑label products priced 40‑50% lower than branded items boost margins.
- Ashok Leyland: Early signs of a bounce back in commercial vehicle demand, helped by lower freight costs and GST cuts. Projected 10% annual volume growth for medium‑ and heavy‑duty trucks through FY27‑28, potentially lifting EBITDA margins to about 13.5%.
- Infosys: Order book growing steadily, driven by a large NHS contract worth $1.6 billion over 15 years. Demand remains focused on cost‑saving and vendor consolidation.
- TCS: Reported $1.5 billion in AI services revenue and $11 billion in next‑generation services. The company is following a five‑pillar plan to become the world’s biggest AI‑led tech services firm.
- Amber Enterprises: Strong growth in air‑conditioning and electronics. Targets 40‑45% revenue growth in electronics by FY26 with 8‑9% margins, supported by new printed‑circuit‑board (PCB) projects and capacity expansions.
Key Takeaways
India’s market heading into 2026 is likely to deliver returns through selective, company‑specific strengths rather than a broad rally. The economy’s fundamentals remain solid, even as global and currency uncertainties linger.
Investors should look for businesses that have clear visibility, solid balance sheets and structural advantages – such as DMart’s retail footprint, TCS’s AI push and Ashok Leyland’s commercial vehicle revival.
Disclaimer
Remember, this is my perspective, not a prediction. Always do your own research or consult a qualified financial adviser before making any investment decisions.