While the company boasts stable sales growth and excellent, accelerating Return on Equity (38.5% Last Year), its profit growth has been highly erratic, marked by a significant -38% YoY net profit decline in the latest quarter despite robust operating profit growth.
This sharp drop in recent net profits, juxtaposed with strong historical stock price performance and an attractive 7.24% dividend yield, suggests a critical disconnect between operational strength and bottom-line profitability.
Retail investors should thoroughly investigate the specific drivers of this recent net profit deterioration to assess the sustainability of its strong ROE and overall valuation amidst such earnings volatility.
News TidBits
Coforge recently approved the acquisition of Encora for $2.35 billion, a strategic move aimed at transforming it into a significantly larger $2.5 billion entity.
This acquisition is designed to substantially bolster Coforge's capabilities and market presence in high-growth areas such as Artificial Intelligence, cloud computing, and data services.
The company projects reaching a substantial revenue of $2 billion by FY27, signaling strong future growth expectations from this integration and expanded service offerings.
This expansion strategically positions Coforge to tap into the surging global demand for advanced digital transformation services, potentially enhancing its competitive edge in the IT services sector.
For retail investors, this highlights Coforge's aggressive growth strategy and focus on next-generation technologies, though successful integration of Encora and realization of projected synergies will be key factors to monitor for sustained performance.
Stacks on Stacks: Tip Time 🤑
Don't confuse market volatility with personal financial instability; a temporary dip in your portfolio is not a sign of failure, but often an opportunity for patient capital to compound.
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Top News Developments
FIIs Pull Record Rs 1.58 Lakh Crore from Indian Equities in 2025
Foreign institutional investors (FIIs) recorded their largest-ever net equity outflows from India in 2025, totaling over Rs 1.58 lakh crore, a move primarily driven by rupee depreciation and global capital shifts towards higher-yield destinations.
This massive selling significantly pressured domestic valuations, particularly large-cap stocks, and reduced overall market liquidity, impacting key rupee-sensitive sectors like IT, pharma, and banks.
Despite these outflows, India's capital markets demonstrated resilience, with robust retail participation and rising SIP flows offsetting some of the FII selling, signaling a structural shift towards more disciplined domestic investing.
While the short-term outlook remains bearish due to continued profit-booking and liquidity squeeze, this year-end repositioning could set the stage for a potential rebound in 2026, contingent on global interest rate easing and renewed investor confidence.
Retail investors should recognize that such FII exits can create attractive buying opportunities in fundamentally strong large-cap stocks that may have been unfairly penalized, but they must also be prepared for continued volatility.
Year-End Profit-Taking Drags Indian Markets Lower in Shortened Week
Indian markets concluded a holiday-shortened week on a lower note, with Sensex and Nifty seeing declines, primarily due to widespread year-end profit-taking as investors locked in gains near all-time highs amid an absence of fresh catalysts.
This consolidation tempered optimism for a 'Santa Claus rally' and reinforced a period of range-bound trading, particularly affecting high-beta sectors like financials, metals, and consumer goods, which saw broad profit-booking.
The market's performance highlights a cautious sentiment heading into the new year, despite underlying positive undertones from domestic demand and liquidity, and it underscores the domestic investor resilience even as foreign flows exited.
A notable fall in India VIX to record lows signals potential market complacency, cautioning retail investors against overconfidence and emphasizing the importance of prudent risk management.
While bearish in the immediate days due to continued consolidation, the market could see a mixed outlook over weeks/quarters, with fresh momentum expected from 2026 consumer tech IPOs and potential policy easing.
Zepto IPO Fuels Optimism for Consumer Tech Sector in 2026
The highly anticipated early-2026 IPO of quick commerce firm Zepto, aiming for a $1.3 billion listing, is poised to redirect significant investor focus and capital towards the consumer tech sector in India.
This development highlights the unique scale and potential of India's quick commerce market, which remains largely unparalleled globally, signaling sustained investment interest despite inherent margin pressures and intense competition among players.
For the broader market, this influx of liquidity into consumer tech listings could reinforce themes of premiumisation and rising income growth, partially offsetting some of the impact from recent FII outflows by attracting domestic and primary market investments.
The success of Zepto's IPO could catalyze further listings in the new-age tech space, creating new opportunities for retail investors to participate in high-growth segments of the digital economy.
While bullish for sector leaders like Zomato due to increased demand visibility, retail investors should carefully evaluate individual company fundamentals, competitive landscape, and the path to profitability within this aggressive, growth-focused sector.
Cha-Ching Cheatsheet 💵
The most important thing for an investor is to know what you don't know; investing where you have no edge is akin to playing poker against professionals with a poor hand, underscoring the value of your circle of competence.
* Valuation category is calculated as a weighted average of PE ratio, CAPE, forward PE, historical PEG, and forward PEG. We are currently showing PE, Forward PE, and Forward PEG for reference.
US markets showed resilience with Q3 2025 GDP growth at 4.3%, the fastest in two years, and jobless claims below expectations, supporting global equity sentiment but prompting FII shifts from India.
Asian markets traded mixed with subdued volumes due to Christmas and New Year holidays, contributing to lackluster cues for Indian equities on December 26.
Commodities rallied with silver at record highs, gold near peaks, and oil prices edging higher on US pressure on Venezuelan exports and airstrikes in Nigeria, influencing global risk appetite.
US companies, including AI firms, reported high profitability, nudging hedge funds to sell Indian equities amid higher US growth prospects.
Global cues generally positive from US record highs, but year-end thin liquidity and weak foreign flows pressured Indian markets, with Gift Nifty indicating flat to negative open.
Emerging Opportunities
Defence sector promising with +5.5% weekly gains, driven by expectations of ₹80,000 crore orders from Defence Acquisition Council and increased public capex in upcoming Union Budget.
Metals sector extended 20% YTD gains, supported by Fed rate cut expectations, softer dollar, China demand signals, controlled supply, and healthier balance sheets for medium-term growth.
FMCG sector up 0.8% weekly, benefiting from stable domestic consumption trends amid year-end positioning and positive bias outlook.
RBI liquidity measures including ₹2 lakh crore bond purchases and USD 10 billion swap to ease conditions, support credit growth, and stabilize markets, creating opportunities in rate-sensitive areas.
Potential FII inflow reversal in 2026 on improving fundamentals post-record 2025 outflows, offering contrarian entry for long-term growth as rupee stabilizes.
Policy & Regulations
SEBI has mandated a uniform brokerage fee structure for all stock exchange members, eliminating member-specific discounts that previously encouraged fee arbitrage, which is expected to intensify cost-competition among brokers and potentially reduce trading costs for retail investors.
The regulator imposed a temporary trading ban on Jane Street Group, a significant liquidity provider, which immediately caused a nearly 10% drop in the National Stock Exchange's equity-derivatives index and cut total options premium turnover by roughly 40% on the first post-ban expiry day, highlighting the critical role of market makers in liquidity and price stability.
SEBI continues to enforce its short-selling restrictions for foreign portfolio investors, limiting short positions to stocks with less than 2% foreign ownership and those not on the RBI's caution list; this rule aims to curtail speculative pressure on vulnerable equities and protect domestic market stability.
The government is considering a manufacturing-focused incentive scheme under the Drone Shakti initiative in Union Budget 2026-27 to boost indigenous drone production, which could create significant opportunities for domestic manufacturers and technology firms in the aerospace and defense sectors. Additionally, new Colliery Control rules have been notified to simplify and accelerate coal mining operations by allowing company boards to approve mine openings, streamlining processes for the energy and industrial sectors.
Crypto Buzz
Name
Price
Market Cap
24h Change
ATH Change
Bitcoin (BTC)
$87464
$1.75T
-1.25%
-30.63%
Ethereum (ETH)
$2925.39
$353.19B
-1.27%
-40.88%
Tether (USDT)
$0.999545
$186.79B
0.01%
-24.46%
BNB (BNB)
$840.27
$115.77B
0.19%
-38.65%
XRP (XRP)
$1.85
$111.92B
-1.35%
-49.33%
The cryptocurrency market experienced a modest contraction in the past 24 hours, with the total global market capitalization slipping to approximately $3.04 trillion, reflecting a broader downturn in sentiment.
Bitcoin, the leading digital asset, fell to around $87,426 USD, representing a decline of approximately 1.61% over the same period and retracting from its recent October highs, indicating a cooling off in bullish momentum.
A significant security breach at Binance-owned Trust Wallet resulted in user losses exceeding $7 million, underscoring persistent security risks in the crypto space that investors must remain vigilant about.
Despite recent price dips and security concerns, India continues to lead global crypto adoption in 2025, demonstrating strong domestic interest and potential for future growth within the regulated framework.
Adding to regulatory scrutiny, a former Coinbase customer service agent was arrested in India in connection with an ongoing data breach investigation, highlighting the increasing cross-border efforts to combat cybercrime in the digital asset sector.
Indian Macroeconomy
Currency
Exchange rate against USD
89.8
-0.35
Previous: 90.15
As of Dec 25
Nominal GDP
Annual growth including inflation
8.2%
0.4%
Previous: 7.8%
As of Sep 25
CPI Inflation
Consumer price increase
0.71%
0.46%
Previous: 0.25%
As of Nov 25
Repo Rate
RBI lending rate
5.25%
-0.25%
Previous: 5.5%
As of Dec 25
Trade Balance
Exports minus imports
$-24.53B
$17.15B
Previous: $-41.68B
As of Nov 25
Current Account
Global trade, income & transfers
$-12292M
$-9570M
Previous: $-2722M
As of Sep 25
Mfg PMI
Manufacturing activity level
55.7 points
-0.9 points
Previous: 56.6 points
As of Dec 25
Services PMI
Services activity level
59.1 points
-0.7 points
Previous: 59.8 points
As of Dec 25
India's economy exhibits continued robustness, with the GDP Annual Growth Rate climbing to 8.2% in September 2025 from 7.8% previously, alongside projections for FY26 maintaining a healthy 7.3% growth and 15% earnings growth expected in FY27. This strong fundamental backdrop positions India favorably, even though the market may not experience an immediate major rally.
Inflation saw a modest increase to 0.71% in November 2025 from 0.25%, though it remains well within controlled limits with a projected overall rate of 2%, offering stability for consumer purchasing power. Simultaneously, the interest rate was marginally cut to 5.25% in December 2025 from 5.5%, a move likely to stimulate credit demand and potentially boost growth in interest-sensitive sectors such as real estate, automotive, and capital goods.
The Indian rupee, which faced significant depreciation throughout 2025 contributing to foreign institutional investor (FII) outflows, showed a slight strengthening to 89.8 against the dollar in late December, offering some short-term relief. Furthermore, the Balance of Trade significantly improved in November 2025, narrowing the deficit to -$24.53 billion from -$41.68 billion, signaling healthier export-import dynamics and a reduction in external sector vulnerabilities, which could positively impact manufacturing and trade-related sectors.
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