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Why Hindustan Unilever (HUL) Share Price is Rising

India’s FMCG engine is running strong — powered by rising incomes, growing urbanization, and the unstoppable rise of both daily essentials and premium indulgences.

From bustling metros to the heart of rural India, consumer demand is shifting gears — and leading players are riding this wave by launching new products and expanding their reach like never before.

Right at the forefront is Hindustan Unilever (HUL) — a brand that needs no introduction. Whether it’s a bar of Lux, a scoop of Surf Excel, a sip of Lipton, or the self-care ritual of Dove — HUL is woven into the fabric of Indian homes.

With a rock-solid distribution network and a diverse portfolio spanning personal care, home care, and food, HUL isn’t just a household name — it’s a market leader.

And today, the company dropped its Q1 numbers — prompting a sharp rally in its stock.

HUL Shares Rally After Q1 Results

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But what do these results mean for the broader market? Is the stock gearing up for a bigger move?

Let’s break it down.

About Hindustan Unilever (HUL)

Hindustan Unilever (HUL) is India’s largest FMCG company, with a legacy dating back to 1888.

It operates across segments like personal care, home care, foods, and wellness.

Its popular brands include Dove, Lux, Surf Excel, Vim, Lipton, Bru, and Horlicks.

The company has a strong presence in both urban and rural markets. Headquartered in Mumbai, HUL is a listed market leader in the FMCG sector.

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HUL Q1FY26 Financial Performance

HUL delivered a resilient performance in Q1FY26.

  • Revenue grew 5% YoY.
  • Operating profit remained flat, but margins declined by 130 basis points (1.3%).
  • Net profit rose 6% YoY.

The key driver of revenue growth was 4% volume growth, indicating a gradual recovery in consumer demand. This was HUL’s fifth consecutive quarter of mid-single-digit volume growth.

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Segment-wise Performance

  • Home Care: Strong performance, especially in liquids (like detergents and cleaners), which posted high single-digit volume growth
  • Beauty & Wellbeing: Sales up 11%. The Health & Wellbeing portfolio (including brands like OZiva) saw its revenue triple YoY
  • Foods & Beverages: Sales rose 4%, with the Beverages segment (tea & coffee) delivering double-digit growth
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Margins

The dip in EBITDA margins was temporary, mainly because:

  • Raw material costs rose sharply during the quarter
  • Price hikes were implemented with a lag

The company also increased its investments in brand building — with higher ad and promotion spending — to drive volume growth and maintain competitive pricing.

Management expects gross margins to improve going forward.

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Outlook After Q1 Results

Instead of chasing short-term margin expansion, HUL has focused on driving volume growth — a strong signal of long-term market leadership intent.

Management believes that growth in H1FY26 will be stronger than H2FY25, supported by ongoing portfolio transformation and gradually improving macroeconomic conditions.

If commodity prices remain stable, future price hikes are expected to be limited to low single digits — implying that growth will be largely volume-driven.

With competitive pricing, volume-led growth, and improving margins, the overall outlook for the year remains positive.

Conclusion

After a modest 2% volume growth in FY25, HUL is gearing up for a stronger FY26 — backed by new launches, premiumisation, and deeper reach in core categories like home and personal care.

Recent price hikes and low-unit packs are expected to boost revenues and rural demand, while the spin-off of Kwality Walls could unlock more value.

Add to that: higher consumer spending (thanks to tax cuts) and HUL’s bold bet on D2C with its Minimalist acquisition — and you have a company that’s not just playing defense, but going full throttle for growth.

Yes, macro risks remain. But HUL’s brand power and product pipeline make it a strong contender in what’s shaping up to be a high-potential year for the FMCG space.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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How to Identify Long-Term Stocks Built to Last for Generations

Today’s article is inspired by a discussion between Mohnish Pabrai and students at the London School of Economics.

Mohnish Pabrai is a widely followed investor in the Indian community and famous for his book, “The Dhandho Investor.” He is a disciple of Warren Buffett’s value investing principles.

We became interested in the discussion because Pabrai brought up the topic of trying to identify businesses that will still be around 200 years from now.

So, are you aware of any such businesses? 

Well, if Pabrai is to be believed, one of the companies that Berkshire Hathaway holds in its portfolio i.e. Burlington Northern Railway, will still be around 200 years from now.

That’s right. Mohnish Pabrai feels that a railroad company like Burlington Northern Railway has a great shot of being around even 200 years from now.

Pabrai was fully aware that the underlying technology of transporting goods may change to a better one. However, since the company owned the rights of way and also owned the land, it will continue to get business as long as we humans have the need to transport large amounts of goods by land.

Well, it is at this point that father of value investing Charlie Munger chimed in and opined that he has a similar viewpoint about Berkshire’s utility business as well.

Berkshire has a large utility business with lots of power companies. And Munger is perhaps right in his assessment as we humans will always be in need of energy to power our economies.

Therefore, while the source of energy may change from wood to coal to oil & gas and finally to solar & wind, there will always be a need for utility companies to manage the energy generation plants and to transmit the power from its source to the end user.

Lastly, will Buffett’s favourite stock Coke still be around 200 years from now? Well, Pabrai believes that there’s a good chance that Coke may survive but there’s also a decent chance that it may not.

Of course, the purpose of this exercise is not to identify which stocks may survive 200 years and which may not. Nobody is going to live that long.

The purpose for Pabrai was to point out this characteristic of the capitalist system which is quite brutal for businesses. Competition is fierce and if one is not constantly reinventing oneself or constantly trying to bring in more efficiency and productivity, one can quickly go out of business.

Therefore, the challenge for us investors as per Pabrai is to look for businesses that will be as dominant 5, 10 and 20 years from now as they are today.

And this is what makes investing fun and challenging because trying to figure out these things is not straightforward at all.

Finding companies with sustainable moats or competitive advantages is one way of dealing with this. However, there are two issues that one may have to confront here.

The first is the ability to distinguish between a competitive advantage that’s very short-lived in nature and the one that is long-term sustainable. Because we recently saw how a government regulatory order killed IEX’s monopoly in the power exchange market.

Therefore, one’s chance of zeroing in on such a business is not very encouraging to be honest.

The second issue is that of valuations. First, you don’t know how much to pay for such businesses. Second, such businesses are seldom available cheap as everyone knows that it is a good business and everyone wants to own them.

Therefore, try as you might, your strategy of finding companies with sustainable moats and investing in them at attractive valuations, may not lead to superior long term returns after all.

So, What’s the Takeaway?

The idea of finding businesses that can last 200 years is intellectually stimulating. It makes you think deeply about capitalism, competition, and what really keeps a company going decade after decade.

But as investors, our job isn’t to predict the next 200 years. Or even the next 50. The world moves too fast, and most businesses simply aren’t built to last that long.

Even companies with strong moats and industry dominance can get disrupted—by regulation, by technology, or by changing consumer preferences. Coke might survive. Or it might fade away. IEX looked unstoppable—until one order changed everything.

So where does that leave us?

Some investors love the challenge of hunting for moats, testing their durability, and buying great businesses at fair prices. That’s one valid approach.

But another equally valid path is more agnostic. You don’t try to find businesses that will survive forever. Instead, you look for mispriced bets. You spot temporary neglect or misunderstood value, buy at a discount, and sell when the market recognises what you saw.

This isn’t about predicting longevity. It’s about recognising opportunity.

Both styles require skill, discipline, and a sound framework. And in the end, the best investing strategy is the one that matches your temperament—and gives you the highest odds of long-term success.

The real question isn’t “Will This Stock Last 200 Years?”

It’s: “Is there a smart reason to own it today… and a clear exit when the time is right?

Happy Investing.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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When is the Right Time to Sell Stocks? Avoid These Common Mistakes

Recently, I met a cousin at a family-get-together. As is often the case these days, we immediately got down to talking about the stock market.

This is what he said…

‘Yash bhai, my funda is simple. I want to invest in strong dividend paying companies and then live off the dividends after I retire’.

That’s what more than a decade working for a leading private equity firm can do to you. He has a sharp investing brain. Also, he is extremely passionate about stocks.

I haven’t had a chance to look at his portfolio in detail. But I know he’s sitting on quite a few multibaggers.

And therein lies his dilemma.

He has seen a lot of his stocks fall significantly after touching multi-year highs in the past. And he’s worried this could happen again.

‘What do I do Yash bhai? I don’t want to see my stocks suffer a big correction again’.

The anxiety was evident in his tone. So I asked him this simple question…

‘Why don’t you exit the ones that you think are very overvalued’?

This was his measured reply…

‘I have considered that option. But where do I invest the proceeds after moving out of the more expensive names?

I have been holding these stocks for many years now and am well acquainted with their businesses. I am just not comfortable buying another set of stocks even though they might be better from a risk-reward perspective’.

I was ready with my response…

‘But buddy, you cannot have your cake and eat it too. If you are buying something for its dividends then you should focus more on the underlying fundamentals and the dividend paying capacity. You should not worry too much about what Mr Market is valuing the stock at’.

He understood my point. But he was clearly not comfortable with my advice.

I don’t blame him. These things are tricky in the market to be honest. It’s difficult for an investor not to get influenced by market movements.

It’s also difficult for someone to not get emotionally attached to a stock, especially when you’ve been holding it for years and it has rewarded you handsomely.

How investors evaluate such situations rationally is what separates the men from the boys.

The reason my cousin got confused was because he wasn’t firm on his sell strategy.

He entered his stocks hoping the dividends, years down the line, would be large enough to allow him to make his ends meet.

Thus, a deterioration in fundamentals or a change in dividend policy are perhaps the only reason for him to sell and move into some other stocks.

But as he saw his holdings turn into multibaggers within a few years, he was tempted to exit. This messed up his whole thought process.

The Importance of Having a Clear Sell Strategy

No matter how strong the dividends or how good the stock is fundamentally, you should always have a clear strategy as to when you’ll exit the stock.

To be honest, no such perfect solution exists as to when an investor should sell his favourite stock.

But as long as your strategy is giving you a good night’s sleep and is allowing you to earn good long-term returns, you should persist with it.

Conclusion

In conclusion, at the end of the day, investing is as much about conviction as it is about clarity.

You could be holding the bluest of bluechips or sitting on a pile of multibaggers, but if you don’t know why you own them, or when you’ll part ways, confusion is inevitable.

Your sell strategy doesn’t have to be perfect. It just has to be yours.

Because in the long run, it’s not the smartest investor who wins—it’s the one who sticks to a well-thought-out plan, through market highs and lows.

So the next time you look at your portfolio, ask yourself: Do I know my exit?

If the answer is yes, you’re already ahead of most.

Happy Investing.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Waaree Energies Share Price Jumps 5% After Strong Q1 Results. More Gains Ahead?

India’s solar revolution is gathering serious steam.

From central schemes like PM-KUSUM to production-linked incentives, policy tailwinds are firmly behind the sector. Solar capacity additions are hitting new highs each year — and with energy security and climate change now top national priorities, the push is only accelerating. State governments too are doing their bit, driving solar adoption in both urban and rural pockets.

In this high-growth backdrop, few companies have captured investor attention like Waaree Energies — one of the most prominent players in India’s solar ecosystem.

Yesterday, Waaree posted a blockbuster Q1 — and the markets took notice. The stock jumped 5% in today’s trade.

But is this just the beginning? Can Waaree sustain its momentum and ride India’s solar wave to greater highs?

Let’s decode the Q1 numbers to find out.

About Waaree Energies

Waaree Energies is India’s largest solar module manufacturer. As of FY25, Waaree holds a 15% share in the country’s total solar module manufacturing capacity.

What’s interesting is that over the years, the company has evolved into an integrated solar player — from modules to cells, and now even planning backward integration into raw materials like wafers and ingots.

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The solar module manufacturing business remains Waaree’s main revenue generator, while EPC contracts contribute about 11% of its total revenue.

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With over 15 years of industry experience, Waaree has ramped up its total PV module capacity to 15 GW — of which 1.6 GW is set up in the US.

Recently, the company also commissioned a 5.4 GW cell manufacturing facility. Its next big step: a fully integrated 6 GW plant where even wafers and ingots will be produced.

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Waaree Energies Q1 Result Analysis

For the quarter ended June 2025, Waaree Energies’ revenue grew by 30%.

The key growth driver was the EPC segment, which grew by 160%, while the solar module business grew by 22%.

Thanks to favorable raw material prices, gross profit surged 80%, which also boosted EBITDA.

Net profit jumped 93%, helped by higher other income and a lower effective tax rate.

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Waaree’s order book grew from ₹47,000 crore in March 2025 to ₹49,000 crore as of June 2025

Outlook and Management Commentary Post Q1 Earnings

Waaree posted nearly ₹1,000 crore EBITDA this quarter, and management expects this to improve in the coming quarters. For FY26, they’ve set a target EBITDA range of ₹5,500–6,000 crore.

Looking ahead, the company is planning to set up its 6 GW fully integrated plant either in Gujarat or Maharashtra.

It has already secured board approval for an additional ₹2,754 crore capex — for setting up 4 GW cell capacity in Gujarat and 4 GW ingot-wafer capacity in Maharashtra.

All these new facilities are expected to be operational by FY27.

Waaree’s long-term vision includes expanding into the broader renewable energy ecosystem — with plans to establish a presence in green hydrogen and battery energy storage systems as well.

Conclusion

Waaree Energies finds itself at the right place, at the right time.

With India targeting 40–50 GW of new renewable capacity every year till 2030, and global solar trade dynamics shifting in favour of Indian players, Waaree is well-positioned to benefit from both domestic tailwinds and rising export demand.

Its aggressive capacity expansion, entry into global markets, and readiness to tap into emerging themes like energy storage and firm renewables make it a serious contender in India’s clean energy future.

The company’s robust FY25 performance — marked by record financials, capacity additions, and a healthy order book — has set a strong base for FY26. Management commentary remains upbeat, backed by visibility on project pipelines and manufacturing capabilities across India and the US.

That said, investors must remain mindful of risks. Waaree still depends significantly on imported components, and the solar sector’s fast-paced tech evolution means constant innovation is key. Regulatory shifts, supply chain disruptions, and policy changes are other watchpoints.

The growth story is promising, but like most high-growth themes, it comes with its own set of variables.

For now, Waaree Energies looks ready to shine — but staying invested will require keeping a close eye on execution, competition, and changing policy tides.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Growth vs Dividend Mutual Funds: Which One Fits Your Investment Style?

Riya and Aman, both 30-year-old professionals, recently began investing into mutual funds. Riya focused on building long term wealth for her new home and retirement and she chose the growth option. Aman, who supports his aging parents and prefers a regular income stream, chose the dividend (IDCW) option. One year later they are both invested in the same mutual fund, but their returns, experience, and ultimate results are completely different.

This isn’t just their story, this is a very real situation for most investors. You choose a fund thinking you have made the right choice, but overlook that choosing between growth and a dividend option can change the entire nature and effectiveness of your investment. The good news is that once you understand the difference you will find it easy to find a choice that is right for you whether that is to build your wealth or for some income stream.

The choice between growth and dividend is not a question of which is better overall, but which is better for you. Are you effectively building wealth quietly over time, or do you have a need for consistent income from your investment to manage monthly expenses to achieve short term objectives? 

In the sections below, we break down the two options, compare their positives and negatives, and assist you to select which option suits your financial journey.

What is a Growth Mutual Fund?

When you invest in a mutual fund through a growth option, all returns—whether they are dividends, interest, or capital gains—will be reinvested into the fund. As such, the Net Asset Value (NAV) will increase over time, as your wealth grows quietly in the background.

During the investment period, you do not receive any cash outlays. Your investment is accruing value, and you only get to realize a capital gain when you sell the fund units. For this reason, the growth mutual fund option is suitable for long-term goals such as; the purchase of a house, retirement planning, and the build-up of a child educational corpus.

What is a Dividend Mutual Fund?

In the dividend option, which has now been renamed by SEBI to income distribution cum capital withdrawal (IDCW), the mutual fund distributes a portion of its profits to its investors based on specific rules. The payout may be as often as monthly, quarterly, or annually. With each payout, the NAV reduces equivalently for each investor.

Most importantly to remember with dividends is they do not create additional returns, the dividend is just a portion of profits from your investment being distributed to you instead of being re-invested to increase your holding in the fund.

Key Differences Between Growth and Dividend Mutual Fund Options

Understanding the difference between growth and dividend mutual fund options is crucial because it will clearly impact how returns are made to you, how your investment grows, and how your taxes will be assessed. 

Here is a brief overview of a few differences:

  1. Treatment of Returns: 
  • Growth Option: As a growth option all income, whether from dividends declared from the stock components in the fund’s portfolio, interest income from credit market instruments, or a capital gain, is reinvested in the scheme, you never actually receive or realize returns in cash during the investment period. You benefit from the fund’s Net Asset Value (NAV) constantly increasing over time (indirectly) from reinvested gains. For long-term investors, this greatly contributes to wealth accumulation over time.
  • Dividend (IDCW) Option: In this option, the fund actually distributes some of its earnings periodically. While fund houses periodically distribute dividends, which may be described as “income?”, fund houses can and do distribute dividends from capital you invested into the fund when they believe equity markets may not be favourable. 

2. NAV (Net Asset Value) Movement

  • Growth Option: In a scheme where there are no payouts, the NAV in growth plans moves upwards steadily as profits are accumulated. There are no big dips as the profits are paid out, so the growth curve is much more consistent. Therefore, investors have a clearer view of how the wealth is compounding over time.
  • Dividend Option: NAVs in dividend plans are more volatile as they fall with each dividend declared. It is harder to assess growth, and it may be misleading for investors to assess growth purely based on NAV without considering the receipts of dividends.

3. Compounding Effect

  • Growth Option: The growth option offers you the maximum benefit from compounding as all profits remain in the fund. This creates the snowball effect of earning returns on both the original capital and what the original capital has earned over time. The longer you stay invested, the more pronounced the snowball effect.
  • Dividend Option: Dividends provide liquidity, however, in doing so takes away the compound effect. When you apply bitcoin, consistently withdrawing income from the remaining corpus earns you less and decreases the long-term potential for wealth creation. Compounding is an inherent benefit of being able to put your entire investment duration corpus to work, requiring you to manually reinvest those withdrawals into the fund – with added risk of paying more fees!

4. Income & Liquidity

  • Growth Option: This option is a good fit for those who would not receive any periodic income during the investment period, therefore making it a good fit for people with a consistent source of income, looking to raise wealth accumulation over time; for example, a professional contributing towards retirement, a child’s future education, or future home purchase.
  • Dividend Option: This option is a good fit for those who would like some periodic cash flow – these might be retirees or others without a consistent source of income, where the withdrawals may act as a passive income in a form. The officer period of time and amount can fluctuate at the AMC’s discretion, based on the fund’s surplus, so do not expect guaranteed amounts or at regular fixed periods.

5. Suitability for Financial Goals

  • Growth Option: The growth option satisfies the needs of letting time help financial goals where the goal is wealth creation and cash flow is not needed on a regular basis – for example: build a corpus for retirement, children’s future education, plans for early financial freedom.
  • Dividend Option: The dividend option is better suited to someone needing short – medium term cash flow needs or someone needing a top-up to existing income, hence this option is often preferred by people in ‘post-retirement’ living or for people who rely on ‘dividends’ in living expenses.

6. Flexibility and Planning

  • Growth Option: You can manage the time of when you are redeeming units allowing you to manage any tax and the cash flow in relation to your financial plan. You have more predictability whenever planning for your goals since you can put the entire corpus to work every time, without interruption.
  • Dividend Option: Any payouts or distributions are based upon the fund manager’s decision, not yours. It is also very difficult for you to plan expenses throughout budgeting, as the timing and amounts of income are left to your fund’s discretion. Further, income is not guaranteed from the distributions and funds may cease payment from the fund performance.

When Should You Use Growth Instead of Dividend?

If you are looking to build long-term wealth and do not need regular income, choose the growth option. This option is also great for young people just starting their careers or anyone who is saving for future goals such as retirement or child’s education. Because all returns are reinvested the compounding can do a better job.

The dividend (IDCW) option is more suitable for people needing periodic income – retirees, or homemakers. Dividend funds generate cash flows, but you can never expect a guaranteed payout, and payouts are taxed based on your slab, so returns are, typically, reduced after taxes are taken into account.

If you have a mix of needs, you can do both; use growth funds for long-term investing and dividend funds to provide some liquidity.

Common Mistakes to Avoid When Choosing Between Growth And Dividend Options

Many investors chase dividends without realizing they reduce NAV and are taxed as regular income. Others ignore the growth option’s tax efficiency, especially for long-term goals. Some focus only on past returns, not total returns (NAV + dividends), while others miss out on compounding by not reinvesting payouts. The biggest mistake? Choosing an option without aligning it to personal financial goals.

Conclusion

Growth and dividend (IDCW) options in mutual funds satisfy different investor needs. If you want the ability to build wealth over time, make the growth option your choice, as compounding will help grow your investment faster over the long run. If you need income, the dividend option can fill in the gaps in cash flow, but does not build wealth as well because there will be less compounding.

FAQs

Which option has better returns – growth or dividend?

The growth option normally has better returns over the long run because the fund will reinvest its profits and also benefit from compounding.

Are dividends from mutual funds guaranteed?

No. Dividend distributions are made at the discretion of the fund house based on fund performance and are not guaranteed.

Can I switch between growth and dividend options?

You can switch options, but it may be treated as a redemption and new investment which may trigger capital gains tax.

How are growth and dividend options taxed?

The growth option gains will be taxed at the point you redeem your units. Dividend distributions will be included in your total income and be taxed warranting your slab rate.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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What is Breakout Trading and How Does It Work?

Picture yourself analyzing a stock which has remained rangebound for a few weeks, with slight ups and downs. Then one day, that stock price suddenly jumps, and it never looks back. For many traders, this is the type of movement you hope for. It often heralds a bigger price move, and being ready at that point can make all the difference.

These sudden movements usually occur when something changes – more buyers show up, news drops, or a major price level is breached. It’s like a pressure building behind a dam. Once the dam breaks, the water comes out quickly and powerfully. If you can spot early signs that these movements are on the way, you can ride that movement and grab a strong trade.

However, catching these price movements is not just about luck. It is about knowing what you want to see, knowing about price behaviour, and knowing how to confirm what you are seeing. If done properly, this technique can allow you to trade with greater confidence and better timing.

What is a Breakout Strategy in Trading?

A breakout strategy means taking a trade when the price of an asset moves beyond a defined price support or resistance level with high volume. The assumption is that once the price breaks a significant level then it will follow that direction for some period of time, creating a possible trade opportunity.

For Example: Tata Steel, has been experiencing resistance at ₹130. For a few weeks now, the price may touch ₹130, only to fall back down. One day, the stock price breaks through ₹130 and closes at ₹134 instead. The stock also closed with unusually high volume too, above its average trading volume. A trader looking to use a breakout strategy would take this as a buy signal and then place a stop-loss short of ₹130 (possibly ₹128) and then look for gains, say to ₹140.

Different Types of Breakout Strategies (With Examples)

Breakouts can occur in many different forms depending on what was happening before the breakout in price activity, and what purpose the breakout served. Understanding what type of breakout will help the trader gauge breakout strength, possible future price direction and how reliable the breakout might be. Here are the primary breakdown types you are likely encounter in your trading world:

  • Continuation Breakout: A continuation breakout occurs when price has gone through a consolidation period after a trend (up or down trend), then follows through in the same direction that the previous trend followed. A continuation breakout shows that there was just a small pause in the price action and that the markets will likely continue moving in the direction of the previous trend. Traders use continuation breakouts to enter the market when there is a confirmation of some continuation half way through the direction of the trend.

Example: Take for example a stock like Infosys that has been moving up every day. After a few days, the price is going pretty much sideways in a small range (flag) and then the price moves up and breaks out above the sideways movement. The breakout has taken place above the consolidation zone in strong volume. The breakout has confirmed that the buyers are still in control after the previous trend has just completed, and hence continue with their trade. Traders would enter the trade after the breakout, but not before having a stop order just below the consolidation zone.

  • Reversal Breakout: Next comes reversal breakouts. A reversal breakout is the polar opposite of a continuation breakouts. A reversal breakout does not indicate a continuation of the original trend but actually a reversal of that trend. As the breakout can take prices that have been moving higher in a down trend or lower in an up-trend, and break out in the opposite direction, these often take place after formations like double bottoms, double tops or head and shoulders.

Example: Let us say Zomato has been in a long term down trend and formed a double bottom near ₹100. A break above the neckline resistance of this pattern, along with a higher volume, would signal a reversal breakout (the traders would think a new bullish trending market is just beginning and would likely go long above the breakout level).

  • False Breakout (Fakeout): A false breakout is when price moves through a support or resistance level but quickly takes a reversal back. These often happen with traders entering with the expectation that a big move has begun. Traders can get trapped and lost due to being stopped out once price returns back to the range.

Example: If a stock like Tata Motors breaks above a main resistance level of ₹720, there are likely a lot of trades purchased anticipating a rally above ₹720. However, if that stock reverses back in a day or two, in this case back below ₹720 the false breakout scenario is well solidified; and this is exactly why confirmation (for instance, volume and confirmation candle closing) is so important prior to initiating your trade.

  • News Driven Breakout: Occasionally, news events (and they can come from earnings, regulatory approval, or macroeconomic announcement) can create a sudden explosive breakout. Generally, they come with high volume and emotional market response. Breakouts of this nature can occur in either direction.

Example: If HDFC Bank announces better-than-expected results during a quarter and the stock gaps up and breaks out of a two-week resistance zone. Traders will generally have their “search tool” on looking for the news event to happen and then want to see post gap consolidation or a clear closing candle above the breakout level for confirmation.

  • Volatility Breakout: This breakout technique uses volatility indicators rather than a chart pattern. Traders will wait for a period of low volatility before price breaks out of a range; the breakout is a sudden volatile expansion. Volatile trading involves using Bollinger Bands or Average True Range (ATR).

Example: Reliance Industries has posted tight Bollinger Bands and generated a wide green candle closing out of the upper band. Traders may utilize this price action as a volatility breakout; those types of traders would likely enter on volume spike confirmation.

Why Breakout Strategies Appeal to Traders: Major Advantages

Breakout strategies have been utilized by active traders for many years, as they have the potential to trigger strong moves in the market and allow traders to ride the momentum while taking the guesswork out of timing market entry and exit points. 

Following are some of the most important advantages to breakout trading:

  • Get in Early on Directional Moves: When traders breakout into new price levels, they can make informed rules based decisions that signal the start of a potential trend or directional move. These breakouts can help traders put themselves at the front of market moves and take a large piece of the trend, providing better potential returns.
  • Clear Entry and Exit Levels: Breakout trading strategies typically use similar technical aspects: support and resistance levels, and consolidation. This provides clear entry levels and stop-loss or take-profit levels, providing a base framework to minimize emotion when there are structures and rules to take the guesswork – the ultimate way to have a disciplined trader mindset.
  • Versatility Across Time Frames and Markets: Whether you are an intraday trader, swing trader, or long-term investor, breakout strategies are flexible and can be used to trade different time frames. Breakout strategies can also be applied to different asset classes such as equities, forex, commodities, and even cryptocurrencies (where a breakout may be used to confirm the structure of a price point hitting its first reasonable level).
  • Volume as a Validating Sign: One of the key advantages in breakout trading, is the ability to correlate market price with market volume. If you have a potential breakout and price change, and have strong volume moves as well, it verifies interest and lessens the chance it may be false, more likely the price movement will remain sustainable.
  • Avoiding Volatile Choppiness: Breakout traders typically stay side lined or inactive on price movements when price is in a consolidation or slumping sideways movement, as they can avoid taking low probability trades or false signals, typical in swirling choppy or volatile markets (which is likely the case, which is why they are choppy).

The Flip Side: Limitations of Breakout Trading

Even though breakout strategies can be a valuable tool for traders, there are limitations and potential issues you need to be aware of. Just like with any trading method, breakout trading has its risks and limitations. It is important for traders to be aware of limitations so they do not fall into common pitfalls and so they can manage expectations accurately.

  • False Breakouts ‘Fakeouts’: Perhaps the single most common risk to breakout trading is the “fakeout” – when price crosses a significant level only to quickly reverse. Fakeouts can trap traders who enter too soon, or without confirmation, producing a loss. Low volume market conditions are more susceptible to fakeouts, as are trades being done on the news-based volatility that appears to have a price trend behind it.
  • Whipsaws on Low Liquidity: In markets where volume/event risk, or when the timeframe is off-peak times, sudden price foreshadows above support or resistance levels may happen without the anticipated follow-through. Such price spikes, or whipsaws, produce stop losses and ultimately biased feelings, generating frustration, particularly for short-term traders.
  • Overreliance on Technical Patterns: Breakout strategies are technically reliant upon technical patterns or indicators and although this can be helpful, it can also be misleading to both new and experienced breakout traders. These patterns and indicators do not account for fundamental outliers, surprise news in an earnings report, or external macro factors that can change direction suddenly.
  • Delayed Confirmation = Missed Opportunities: One way for breakout traders to manage fakeouts is to wait for confirmation such as a close above the breakout level, or a surge in trading volume. However, what happens when a market becomes very volatile (bearish or bullish)? Many rational breakout traders may wait for confirmation which could result in missing the opportunity to take the best price and/or a significant move and affect their profit potential to recover enough from a potential draw-down.
  • Sensitive to Market Sentiment: Breakout strategies are most reliable during trending markets, while they can become less reliable and more uncertain during periods of uncertainty or limited price fluctuation. If price events cause market sentiment to turn quickly, even the best missed-out breakout conditions can materialize into a breakout. These events may tend to have exploitive characteristics or show greater unpredictability.

Things to Look Out for When Trading Breakouts

Breaching a price range or support or resistance topology can be lucrative, but not without discipline and awareness. To raise the chances of success here are the major things to watch out for when trading a break.

  • Volume Confirmation is Vital: Breakouts accompanied by volume make the breakout more likely to be real. Volume is an indicator of conviction; whether buyers are forcing the price up in a breaking upward move or sellers are dominating in a breaking downward move.
  • Market Context Should Not Be Ignored: Breakouts thrive in trending markets or when volatility is present; they don’t belong in flat sideways markets where the price action can often be very tight in range. They also can be affected by global factors like news, earnings, economic announcements, and geopolitical situations, especially in more volatile or illiquid markets.
  • Confirming Timeframes: Before initiating a break trade, look at timeframes above your standard execution timeframe. A break on a 15-minute chart or timeframe may not look as meaningful on the daily or hourly timeframes.
  • Watch for Signals of Weakened Momentum Prior to the Break: When candles display long wicks, indecisive candles or candles that keep testing the same price level without significant movement (each are signs of dwindling momentum).
  • Manage Targets and Accountable Stop Losses: Manage risk is non-negotiable; your stop-loss should be just below the breaking level for long trades and just above for shorts. If you enter late into an extended breakout it will lead to a larger stop-loss as profit diminishes with each leg up.
  • Caution Around False Breakout Signals or Traps: Nonetheless, beware especially around psychological levels (₹10,000 or ₹100) which can lure order for institutional targets. Psychological levels typically trap retail stop-loss orders, a seemingly small breakout above or below a major price level may just be liquidity seeking to make an order.

Conclusion

Breakout trading is not simply about identifying a stock that breaks above a level of resistance or support, but about understanding the momentum of the move. 

If you employ breakout strategies properly with verified confirmation signals, discipline, and risk management, they can create great trades with great profits. Jumping in blindly and without verification can lead to costly errors.

With the right belief, breakout trading can be an important part of your toolbox.

FAQs

Can an inexperienced trader practice breakout trading?

Certainly, an inexperienced trader can practice breakout trading, but the trader should start small and focus on learning. Inexperienced traders may want to consider working with virtual trading platforms first.

What is a false breakout and how can we minimize them?

A false breakout is when the price briefly trades beyond a key level hoping to build momentum to continue beyond that level, only to reverse directions. To minimize false breakouts:

  • Wait for a candle to close beyond the breakout level.
  • Look for volume confirmation.
  • Don’t trade breakouts in low liquidity or during major news events.

Does breakout trading only apply to stocks?

Not at all. Breakout strategies can work for all asset classes of which stocks are just one. Breakout strategies can work in all asset classes including: forex, commodities, and cryptocurrencies. The principles will be the same, but some of the tools and timing may vary slightly for each market.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Kotak Bank Shares Crash as Q1 Earnings Spark Asset Quality Concerns

India’s banking sector is more than just a facilitator of financial transactions. It’s a key pillar of the country’s economic growth story.

From enabling credit access for individuals and businesses to mobilising capital and promoting financial inclusion, banks play a critical role in shaping the country’s economic direction.

And among the top private players, Kotak Mahindra Bank has long held a reputation for prudent lending, strong management, and consistent performance.

But even the most trusted names aren’t immune to market realities.

Kotak’s latest Q1 results failed to excite investors. Margins showed stress, provisions spiked, and the overall commentary hinted at underlying challenges — particularly in unsecured retail and microfinance.

The result?

The stock took a hit. Analysts are now re-evaluating the bank’s near-term outlook. And questions are being raised — is this just a speed bump in Kotak’s journey, or are we entering a phase where the bank will have to fight harder to keep up with peers like HDFC Bank and ICICI?

Let’s break down the numbers, the commentary, and what it could mean for investors.

Kotak Mahindra Bank Q1 Results

In early trade today, Kotak Mahindra Bank share price fell 5% after investors digested the bank’s earnings that it reported over the weekend.

Kotak Bank Shares Slip Post Q1 Results

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Net Profit Drops Due to Margin Pressure and Higher Provisions

Kotak Mahindra Bank’s standalone profit after tax (PAT) declined 8% quarter-on-quarter. There were two key reasons behind this:

  • Margin Pressure: The bank’s Net Interest Margin (NIM) fell by 32 basis points to 4.65%, primarily due to the impact of the recent rate cut and a rising share of low-yielding corporate loans.
  • Rise in Provisions: Asset quality deterioration forced the bank to set aside more funds for bad loans, which further dragged down profitability.

Asset Growth

The bank’s loan book grew 14% year-on-year, reaching ₹4.4 trillion. However, this growth was largely driven by corporate and home loans — segments that typically carry lower yields and hence offer thinner margins.

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Asset Quality Deteriorates

Slippages rose to 1.9%, mainly due to stress in microfinance (MFI), retail commercial vehicles (CV), and rural segments.

The Gross NPA (Non-Performing Assets) ratio also increased to 1.5%.

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Management View and Outlook

According to Kotak Bank’s management, stress in the MFI segment is believed to have peaked and is expected to gradually improve.

Inactive credit card accounts have been weeded out, delinquencies remain stable, and credit costs could come down in the second half of the year.

In the personal loan segment, credit cost is now under control.

Retail CV stress may persist a bit longer, but the bank has implemented risk-mitigation measures.

While the SME segment is being closely monitored, no major red flags have emerged yet.

Kotak Bank’s management has also indicated that margin pressure may continue into Q2, as the full impact of repo rate cuts plays out. However, margins are expected to gradually stabilise and improve, aided by internal cost efficiencies and benefits from lower CASA rates.

While loan and deposit growth is likely to sustain, the market will keep a close eye on trends in asset quality and NIMs going forward.

What Next for Kotak Bank?

Kotak Mahindra Bank is one of the frontrunners in India’s financial services space, with a presence that goes beyond traditional banking — covering insurance, wealth management, and capital markets.

Looking ahead, the landscape could shift meaningfully if Kotak chooses to demerge some of its non-banking businesses. The core banking arm, with its strong digital presence and expanding market share, could thrive as a standalone entity. 

At the same time, businesses like Kotak Life Insurance and Kotak Securities could scale independently. For shareholders, this could be a significant value unlock.

Conclusion

Kotak Mahindra Bank is doubling down on technology investments, not just to meet regulatory expectations from the capital market watchdog, but also to stay ahead in an increasingly competitive banking landscape.

As part of its long-term strategy, the bank has set an ambitious goal: to be among India’s top three private sector banks by 2030.

To get there, Kotak is pursuing a mix of organic and inorganic growth, with a sharp focus on tech-led innovation and profitability. 

Once digital restrictions imposed by the capital markets regulator are lifted, Kotak is prepared to swiftly onboard new customers and grow its credit card base, capitalising on its tech infrastructure and distribution strength.

That said, execution remains key — and with rising competition and regulatory scrutiny, Kotak will need to deliver consistently on growth, margins, and digital transformation to stay on course.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Bajaj Finance Share Price Falls 5% After Q1 Results. What Next?

India’s financial sector is evolving at a breakneck pace — with legacy players scaling up and nimble new entrants adding to the competition. 

In this ever-expanding universe, one name has consistently stood out: Bajaj Finance.

A pioneer in retail lending and consumer finance, Bajaj Finance has built a solid reputation for aggressive growth, innovation, and consistent value creation for shareholders. 

Over the last decade, it has transformed from a traditional lender to a digital-first NBFC powerhouse — and, in the process, created immense wealth for long-term investors.

However, even the best-performing stocks aren’t immune to market reactions.

Today, Bajaj Finance shares slipped nearly 5% post Q1 results, driven by concerns around asset quality pressures in select segments and a cautious management outlook.

Bajaj Finance Slips After Q1 Results

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So, is it just a short-term reaction — or a signal to reassess expectations?

Let’s decode what the results mean for Bajaj Finance and what could come next.

Bajaj Finance Q1 Result Analysis

For the quarter ended June 2025, Bajaj Finance reported decent results:

  • Net Interest Income (NII) grew by 22% YoY.
  • The company disbursed 13.5 million new loans during the quarter — a 23% increase compared to last year, driven by strong demand in the retail, MSME, and mortgage segments.
  • Assets Under Management (AUM) grew by 25% YoY, supported by strong performance in mortgages, urban B2C loans, and MSME lending. However, two- and three-wheeler loans declined 20% YoY.
  • For the first time, the company reported a ₹1,556 crore microfinance loan book this quarter.
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While NII growth was strong, it fell short of historical performance benchmarks.

The management also flagged concerns around rising consumer leverage, and said it is actively reducing exposure to customers with multiple loans. This could impact yields in upcoming quarters.

On the asset quality front:

  • Gross and Net NPAs rose slightly, mainly due to:
    • Stress in unsecured and small-ticket retail loans (an industry-wide trend)
    • The impact of stricter RBI regulations
  • Loan loss provisions rose 26% YoY, reflecting the company’s cautious risk management stance.
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Importantly, the company noted that in FY26, it will intentionally keep AUM growth muted in the two-wheeler, three-wheeler, and MSME segments — as credit costs in these segments remain elevated.

Bajaj Finance Outlook After Q1 Results

Bajaj Finance reported healthy growth in NII, AUM, and profit, largely driven by volume expansion across its core lending businesses.

However, the rise in NPAs and provisions suggests that the company is now operating in a more cautious mode, especially given the evolving asset quality trends in segments like unsecured retail and auto finance.

That said, the overall business outlook remains strong, supported by its digital initiatives and granular lending strategy.

Still, it will be important to closely monitor credit quality trends over the coming quarters

Bajaj Finance Succession Plan

A few days ago, the company’s CEO and MD Anup Kumar Saha resigned. Post Saha’s exit, Rajeev Jain, the former CEO of Bajaj Finance re-entered the company in an active operational role and was assigned the additional responsibility and re-designated as vice chairman and MD of the company till March 31, 2028.

While announcing results, Rajeev Jain on July 24 said the company will submit detailed succession planning process in six months to the board and nomination and remuneration committee (NRC).

In March, Rajeev Jain was appointed by Bajaj Finserv as additional director in a non-executive position and also as the vice chairman of Bajaj Finance effective April 1 2025.

Some Businesses to Grow Slow in FY26

On the surface, Bajaj Finance’s numbers for Q1 look solid. But investors were concerned when Rajeev Jain said that its 2 & 3 wheeler and MSME businesses could grow slow in FY26, as the company is going slow on these businesses amid stress.

The company’s two & three-wheeler finance AUM declined by 20% YoY. However, MSME lending of the company increased by 29% YoY.

On the asset quality, stage 2 assets increased by Rs 324 crore primarily on account of these MSME customers.

Conclusion

As India’s economy expands, rising disposable incomes and a growing middle class are set to fuel demand for credit and financial services.

This structural shift places companies with strong foundations in a favourable position — and Bajaj Finance is right at the center of this opportunity.

Backed by its diversified product portfolio, deep customer reach, and aggressive digital push, Bajaj Finance is not just adapting to change — it’s helping shape the future of financial services in India.

For long-term investors, this makes it a stock worth watching — not just for short-term market reactions, but for the broader growth story it represents.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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One Game-Changing Idea That Can Instantly Make You a Better Investor

In one of my favourite books on investing, The Intelligent Investor, father of value investing Ben Graham makes a very important point right at the start.

He argues that an investor’s chief problem, and even his worst enemy, is likely to be himself.

So very true, isn’t it?

Remember, this was way before the whole behaviour finance revolution kicked off. It’s why you need to give Graham the credit for being so spot on with his observation.

Decades later, behaviour psychologists like Daniel Kahneman and Amos Tversky would undertake a full-fledged study of the biases that affect our thinking and often come in the way of sensible decision making.

And guess what? As far as investing is concerned, they came to the same conclusion as Graham.

One of their more famous works is known as ‘On the Psychology of Prediction’. They explain how humans are such bad predictors and what we can do to improve the accuracy of our predictions.

According to them, there are 3 things to consider to make an effective prediction:

  • The base rate
  • The individual case
  • How to weigh the two

Let me help you with an example which, although silly, does its job quite well.

Imagine you are walking down a street and suddenly you encounter a dog. Should you be careful and quickly get out of its reach or should you keep walking, hoping that the dog won’t bark loudly at you?

Well, if you consider statistics then it is found that 60%-70% of all dogs bark aggressively at strangers.

Therefore, the dog in front of you is the individual case and your base rate is 60%-70%.

So, how are you going to weigh the two factors? 

Well, if it was me, I would steer clear of the dog. I would ensure I’m well outside the range of its leash. The odds that the dog won’t bark at me are not in my favour.

That’s the power of using a base rate right there. Even if it was a small dog, you’d be well advised to steer clear of it based on historical base rate.

Base rate is very useful in the field of investing as well.

The next time you are tempted to invest in a highly speculative small-cap company that has no profits currently but is likely to be profitable in the future, you need to ask yourself what is the base rate here? How many times have people ended up making huge money on such investments?

Well, if it is a low number and there’s very little that separates this company from a typical speculative stock of the same size, you’d do well to stay away from the stock.

Thus, an understanding of the base rate is such an important quality to have while investing in stocks. It not only helps us invest in stocks and asset classes with a greater reward potential than risk but also helps us steer clear of highly speculative counters.

Little wonder, Daniel Kahneman called base rates as one of his favourite concepts.

Conclusion

The market punishes prediction arrogance but rewards probability humility. Base‑rate thinking is simply a structured way of staying humble. Adopt it, and you’ll:

  • Avoid most capital‑destroying fads.
  • Enter high‑quality ideas at valuations that still leave upside on the table.
  • Sleep better because your portfolio is built on odds, not anecdotes.

Try this for one earnings season: each time you feel that itch to buy or sell, pause and ask, “What does the base rate say?” Chances are, you’ll make fewer moves—but far better ones.

Ben Graham spotted this trap 80 years ago.

Kahneman quantified it 40 years ago.

But you can exploit it starting today.

If you’re looking for a ready‑made framework that bakes base rates, check out MultiplyRR’s research stack and see how a data‑first approach can stack the odds in your favour.

Invest smart, stay curious, and let the numbers keep you honest.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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Historic India-UK FTA Signed! 99% Indian Exports to Enter UK Duty Free

After nearly three and a half years of intense negotiations, India and the United Kingdom have officially signed a landmark Free Trade Agreement (FTA) on July 24, 2025, during Prime Minister Narendra Modi’s state visit to London. 

For the UK, this is being hailed as its biggest post-Brexit trade success. For India, it’s a strategic step to unlock Europe’s markets and deepen economic engagement with a G7 nation.

Let’s break down what the agreement covers, which sectors will benefit the most, what remains unresolved, and how both countries stand to gain.

What’s in the FTA?

The India-UK deal includes tariff eliminations, regulatory cooperation, professional mobility, services trade, digital commerce, and intellectual property. It’s wide-ranging and comprehensive, with some parts coming into effect immediately and others gradually over the next 5 to 15 years.

Key Highlights:

  • India gets zero-duty access for 99% of its exports to the UK, covering nearly 100% of the value of goods traded.
  • The UK gets tariff reduction on 90% of its exports to India, including whisky, automobiles, salmon, chocolates, cosmetics, and more.
  • Bilateral trade, currently valued at around USD 60 billion, is expected to double to USD 120 billion by 2030.

Source: Business Today

Sectors That Will See Big Gains

This FTA isn’t just a political handshake. It has sector-wise implications, especially for manufacturing, services, and labour-intensive exports from India. Here’s where the big shifts will happen:

Textiles & Apparel

  • Indian garments, previously subject to 8–12% UK import duties, will now enjoy zero tariffs.
  • Exports from hubs like Tiruppur, Ludhiana, Surat, and Moradabad are expected to rise sharply.
  • Estimated boost: ₹35,000 crore to ₹40,000+ crore in textile exports in FY25.
  • Tiruppur alone may see employment expansion for its 1 million+ workers, 65% of whom are women.

Pharmaceuticals & Medical Devices

  • 99% of India’s pharma and med-tech exports now qualify for zero-duty entry into the UK.
  • Regulatory procedures for market entry have been simplified, giving India’s low-cost, high-quality producers a larger playground.

Chemicals & Plastics

  • Tariff elimination for iodine, agrochemicals, and specialty chemicals.
  • Export potential could double to $1 billion by FY30, especially for MSMEs.

Auto Components

  • Indian-made auto parts and machinery gain zero-duty access into the UK.
  • Expected to strengthen the Make in India narrative and bolster the auto MSME sector.

Services & Professional Mobility

  • The agreement boosts access for Indian IT, financial services, education, and consumer services firms in the UK.
  • Provisions include:
    • 1,800 visas per year for Indian professionals (e.g., yoga instructors, artists, chefs).
    • 3-year exemption from UK’s national insurance contributions for short-term Indian workers.
    • Easier rules for intra-company transfers and recognition of Indian professional qualifications.

Source: Economic Times

What’s Off the Table?

Despite its scope, the FTA falls short of full coverage. Notably:

  • Agriculture: Completely excluded at India’s request due to domestic sensitivities.
  • Carbon Border Adjustment Mechanism (CBAM): The UK didn’t clarify how its upcoming carbon tax will apply. Starting 2027, this could cost Indian exporters $775 million/year.
  • Bilateral Investment Treaty (BIT): Still under negotiation. The UK wants a sunset clause; India wants protection from retroactive tax claims.

These sticking points mean that while the deal is a major win, some high-stakes issues still remain on the table.

Source: The Guardian

Future Impact on Bilateral Relations

The FTA is positioned as the cornerstone of a broader India–UK Comprehensive Strategic Partnership, aimed at enhancing cooperation not just in trade but also in technology, security, education, and climate change.

Expected Outcomes by 2030:

  • Trade volume to increase from $60 billion to $120 billion.
  • UK GDP projected to rise by £4.8 billion/year.
  • Wage growth of £2.2 billion/year in the UK.
  • India expects the creation of 5 million+ jobs, mostly in export-led sectors.

Beyond the economic numbers, the agreement solidifies India’s role as a preferred partner in the UK’s global trade strategy post-Brexit and helps India strengthen its economic footprint in Europe.
Source: Business Today

Market Reaction: Calm but Focused

On the day following the announcement:

  • Indian stock markets opened flat; Nifty hovered near 25,000.
  • No dramatic index-wide spike, but:
    • Textile, leather, footwear, and auto component stocks saw selective buying interest.
  • Analysts say broader movement may follow after clarity on unresolved issues like BIT and CBAM.

The subdued market response reflects a “wait and watch” approach, with investors likely evaluating the fine print before recalibrating long-term positions.

What’s in It for India?

  • Tariff-free access for nearly all exports to the UK.
  • Boost to labour-intensive sectors like textiles, apparel, and gems & jewellery.
  • Greater opportunities for IT services, pharma, and med-tech.
  • Visa relaxations and social security benefits for skilled workers.
  • Potential for 5M+ job creation.

What’s in It for the UK?

  • Reduction in tariffs on premium goods like Scotch whisky, gin, cars, chocolates.
  • Estimated economic uplift of £4.8 billion/year in GDP.
  • Better access to Indian procurement markets and services sector.
  • Enhanced strategic footprint in Indo-Pacific trade corridors.
  • Long-term gains in sectors like automobiles and education.

Source: Business Today

A Few Hurdles to Watch

  • UK auto sector voiced concerns over phased quotas: car imports face long wait-times for full benefit, with high duties till the early 2030s.
  • MSME exporters in India may struggle with documentation and compliance with new standards (e.g., BCI, OEKO-TEX).
  • Environmental clauses, such as CBAM, may erode some trade gains unless they are resolved quickly.

Final Takeaway

The India–UK FTA marks a turning point. It opens up opportunities across traditional and emerging sectors, fosters deeper institutional ties, and sets the stage for long-term trade cooperation. While certain gaps remain—especially around investment protection and sustainability regulations—the broad consensus is that both countries now have a stronger platform to build from.

For exporters, investors, and professionals, the next few years will determine how well the FTA translates from agreement to impact. The paperwork is done. Implementation begins now.

Disclaimer Note: The securities quoted, if any, are for illustration only and are not recommendatory. This article is for education purposes only and shall not be considered as a recommendation or investment advice by Equentis – Research & Ranking. We will not be liable for any losses that may occur. Investments in the securities market are subject to market risks. Read all the related documents carefully before investing. Registration granted by SEBI, membership of BASL & the certification from NISM in no way guarantee the performance of the intermediary or provide any assurance of returns to investors.

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What is an Investment Advisory Firm?

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.

An investment advisory firm is a company that helps investors make decisions about buying and selling securities (like stocks) in exchange for a fee. They can advise clients directly or provide advisory reports and other publications about specific securities, such as high growth stock recommendations. Some firms use both methods, like Research & Ranking, India’s leading stock advisory company, specializing in smart investments and long-term stocks since 2015.