Are consistent compounders in for a lost decade?
REALITY CHECK. Last 6 years showing iron valuation and margin of safety have led to paltry returns for investors By Kumar Shankar Roy, bl research bureau
"No economics textbook I know was written in the first couple of thousand years discussed the possibility that you could have this sort of situation continue and actually intensify more or less the same," investing legend Warren Buffett said in 2019. He was referring to what then seemed an impossible trinity — very low unemployment, low inflation and low interest rates. At the time, Indian markets too rode the global liquidity flood. Cheap money flowed into Indian markets, and 'consistent compounder' stocks as well, pushing valuations higher than any point in history that they could do no wrong. In the post-Covid, app-driven retail boom, repetition of such a belief was near-consensus wisdom. Some of those stocks, however, have delivered a harsh rebuttal: even great businesses fail to deliver if the stocks when bought at excessive valuations.
A DIFFERENT STORY
From December 2019 to March 2026, the Nifty 50 compounded at 10.6 per cent, rising from about 12,100 to 22,800 levels. Yet several of best-known quality stocks failed to keep pace, and in some cases significantly underperformed. Asian Paints returned 3.5 per cent, Hindustan Unilever (HUL) 1.5 per cent and Britannia 5.9 per cent, while Dabur India fell 1.4 per cent. HDFC Bank and Kotak Mahindra Bank delivered returns of 1.1-2.2 per cent against the Nifty Bank’s 8.1 per cent. These are house-hold names, core portfolio holdings and still command lakhs of crores in market capitalisation.
Their reputation was not invented out of thin air. In the 2009-2019 decade, these stocks delivered exceptional returns. Britannia compounded at 33.5 per cent, Pidilite at 30.4 per cent and Asian Paints at 25.8 per cent annually. Even HDFC Bank and Kotak Mahindra Bank returned 17.5-23.4 per cent CAGR, while HUL returned 21.3 per cent. By comparison, the Nifty 50 compounded at just 8.9 per cent and the Nifty Bank at 13.2 per cent. These were not just steady businesses — they were outstanding stocks, earning the "consistent compounder" tag.
GOOD FUNDAMENTALS
The enthusiasm was backed by strong earnings growth too. Between 2009 and 2019, profits compounded at 18.1 per cent for Asian Paints, 23.2 per cent for Britannia, 25.8 per cent for HDFC Bank and 26.9 per cent for Kotak Mahindra Bank. Pidilite, too, delivered a 23.7 per cent profit CAGR. Margins expanded meaningfully. Asian Paints' net margin climbed from 4.2 per cent in FY09 to 10.5 per cent in FY19. Pidilite's rose from 5.6 per cent to 13.1 per cent. Asian Paints improved from 7.7 per cent to 13.5 per cent.
By the end of 2019, though, many of these stocks were priced for near-perfection. For instance, the Nifty 50 traded at about 23.3 times earnings, HUL at 61 times, Asian Paints at 76 times and Titan Paints near 70 times. Some, such as Berger Paints, had crossed 100 times. These were not just valuations, they were acts of faith.
Then came the reset. Global interest rates rose to check inflation. Indian liquidity tightened, and FIIs found 3-4 per cent risk free bond yields more appealing than Indian stocks with 2 per cent thinner earnings yields. At the same time, competition intensified and earlier growth assumptions weakened. Paint companies found their moats were not impregnable. FMCG firms learnt that volume growth was not guaranteed. Banks discovered that stronger PSU rivals and slower credit growth could upend old assumptions.
The result was a double blow — moderating earnings growth and valuation compression. Between FY19 and FY25, these companies continued to grow, but at a markedly slower pace than in the previous decade. Asian Paints' profit CAGR slowed down from 18.1 per cent in FY09-FY19 to 8.7 per cent in FY19-FY25, while HUL's profit CAGR dropped from 25.8 per cent to 1.5 per cent. Dabur's profit growth slowed from 14.1 per cent to 3.1 per cent, while its stock returns slipped from 19.2 per cent CAGR to a negative 1.4 per cent. TCS saw profit growth ease from 19.5 per cent to 7.3 per cent, and returns CAGR from 19.1 per cent to 1.6 per cent. This was not simply the market turning unfair. Growth slowed, and valuations could no longer do the heavy lifting. Even after the derating, excesses have not fully vanished. HUL still trades at 48.6 times earnings, Asian Paints at 57.7 and Pidilite at 64.4, while the Nifty 50 stands at 21.1.
HARDER LESSON
The lesson is not that these are weak companies. Most remain strong businesses with market leadership, solid balance sheets and respectable, if slower, earnings growth. The harder lesson is that even strong businesses can deliver mediocre returns for extended periods. HUL had a lost decade between 1999 and 2010. Reliance Industries had one between 2007 and 2017. For a turnaround, valuation must slide back to reality or growth must re-accelerate. When investors pay up simply because a stock once compounded brilliantly, they are not buying the future — they are paying for nostalgia.
Table: Valuation excesses have recorded, but not vanished
| Stock | P/E (Dec 31, 2019) | P/E (Dec 31, 2024) | P/E (Mar 27, 2026) |
|---|---|---|---|
| Asian Paints | 71.32 | 79.19 | 57.70 |
| Britannia Industries | 22.08 | 55.11 | 54.85 |
| Dabur India | 35.05 | 56.10 | 42.08 |
| Hindustan Unilever | 71.16 | 48.48 | 48.61 |
| Pidilite Industries | 48.8 | 76.16 | 64.42 |
| TCS | 21.20 | 25.02 | 18.12 |
| Titan | 85.11 | 82.27 | 57.14 |
| HDFC Bank (P/B) | 5.50 | 4.13 | 2.06 |
| Kotak Mahindra Bank (P/B) | 3.26 | 4.95 | 2.10 |
| Nifty Bank (P/B) | 2.17 | 2.55 | 1.72 |
| Nifty 50 | 23.3 | 19.1 | 21.1 |
Table: From profit slowdown to stock return slowdown
| | 2009-2019 period | | 2019-2025/26 period | | | :--- | :--- | :--- | :--- | :--- | | Stock | Profit CAGR | Return CAGR | Profit CAGR | Return CAGR | | Asian Paints | 18.1 | 25.8 | 8.7 | 3.5 | | Britannia Industries | 23.2 | 33.5 | 10.7 | 5.9 | | Dabur India | 14.0 | 19.2 | 3.1 | -1.4 | | Hindustan Unilever | 11.3 | 21.3 | 1.5 | 1.5 | | Pidilite Industries | 23.7 | 30.4 | 11.0 | 10.8 | | TCS | 19.5 | 19.1 | 7.3 | 1.6 | | HDFC Bank | 25.8 | 22.3 | 2.1 | 2.2 | | Kotak Mahindra Bank | 26.9 | 23.4 | NA | 1.1 | | Nifty 50 | NA | 8.9 | NA | 10.6 | | Nifty Bank | NA | 13.2 | NA | 8.1 |
(Sources: Bloomberg, Nifty Indices, Stock returns are adjusted for dividends. Stock returns up to March 27, 2026. HDFC Bank and Kotak Mahindra Bank comparison is to Nifty Bank.)
‘Considerable downside risk to 7-7.4% growth estimates’
By Shishir Sinha, New Delhi
Chief Economic Advisor V Anantha Nageswaran has said there is “considerable downside risk” on account of the West Asia crisis, calling for a reprioritisation of spending.
Post the GDP base year revision on February 27, Nageswaran had raised India’s GDP growth forecast for FY25 to 7.4 per cent from 7 per cent and for FY26 to 7.2 per cent.
“Clearly, there is considerable downside to this number. Data for March will not reveal much, since businesses are trying to meet full-year targets for FY26. High-frequency data for April and May possibly may give us a better handle on the likely growth trajectory for FY27,” Nageswaran said. Similarly, the current account deficit “could widen to some extent in FY27,” he said in the preface to the Monthly Economic Review, prepared by the Department of Economic Affairs.
4 CHANNELS OF IMPACT
He recalled what he had written last month — that the impact of the conflict on India would be through four channels. The first is supply disruptions to oil, gas and fertilizers, and more importantly, an import price shock. The second is higher logistics costs (e.g., freight and insurance), and the third is higher logistics costs (e.g., freight and insurance), and the fourth is a possible impact on investments by Indian firms in Gulf countries.
“The combined impact across the four channels on growth, inflation, the fiscal balance and external balances is likely to be significant,” he said, adding India will need to provide immediate relief to the most affected and vulnerable businesses and households and, at the same time, generate fiscal space to meet strategic and long-term needs highlighted by the conflict, such as building buffers in several commodities and materials, not just energy. “This calls for re-prioritisation of spending to provide targeted relief for the most affected and vulnerable businesses and households.”
SIGNS OF MODERATION
The MER said early high-frequency indicators for early 2026 suggest a moderation in economic momentum, reflecting the initial impact of global developments. E-way bill generation declined by 5.3 per cent on a month-on-month basis up to March 22, indicating moderation in goods movement; however, it remained higher by 9.4 per cent on a year-on-year basis. Flash PMI estimates for March point to a softening in output growth following the peak reached in February.
At the same time, demand indicators showed mixed results: Vehicle registrations contracted by 2.2 per cent year-on-year up to March 24, and digital payment volume continued to expand in double digits up to March 22. The March 2026 round of the Rural Economic Conditions survey, which was conducted during the last week of February and the first week of March, indicates some softening in rural sentiment; however, consumption growth strengthened.
Nonetheless, the “government remains vigilant, with measures underway to ensure adequate domestic energy availability and mitigate potential inflationary pressures,” it said.
Noida International Airport to boost NCR’s aviation capacity, regional growth
By Rohit Vaid, New Delhi
The inauguration of Noida International Airport (NIA) Phase I in the Jewar township of Greater Noida by Prime Minister Narendra Modi on March 28 marks a new milestone in the National Capital Region’s aviation landscape. The project is expected to become India’s first integrated, airport-led urban development hub.
AEROTROPOLIS MODEL
Industry experts say it signifies the emergence of an “aerotropolis” model, where airports function as economic hubs driving connectivity, investment and regional development. The airport becomes the third major hub in the NCR after Indira Gandhi International (IGI) and Hindon Airport, strengthening the region’s multi-airport system.
At the inauguration ceremony, large crowds gathered in Jewar, reflecting strong public interest. Among them, Sachin Mehra, a 19-year-old attendee, highlighted employment opportunities expected from the project, particularly in aviation, ground handling, technical services and hospitality. Meanwhile, Kamal Sharma, a resident of Greater Noida, said the airport would ease travel significantly, reducing dependence on Delhi’s airport.
ECONOMIC SHIFT
Beyond the inauguration, experts emphasised its wider impact on India’s business and connectivity landscape. Jagannarayan Padmanabhan, Senior Director and Global Head (Consulting), Transport, Logistics & Analytics, said the airport marks a structural shift from a single-airport dependency model to a multi-airport system in the NCR. He pointed to strong infrastructure linkages, including the Yamuna Expressway, Eastern Peripheral Expressway and connectivity to the Delhi-Mumbai Expressway.
Kiran Jain, Chief Operating Officer of Noida International Airport, said the infrastructure attracts investment and facilitates the surrounding economic eco-system, thereby improving global connectivity.
SCALE OF CONSTRUCTION
Construction began in 2022 and was completed over 37 months. It involved more than a lakh tonnes of aggregates, 22,000 metric tonnes of structural steel, 14,000 tonnes of reinforcement steel and 3.4 lakh cubic metres of concrete. The project logged over 80 million man-hours.
Big size doesn’t kill mutual fund performance
RETURN-WISE. Across large-cap, mid-cap, small-cap and flexi-cap categories, the biggest schemes performed well, suggesting that large AUM by itself is not necessarily a challenge
By Dharani Gunasekaran
Did you know just 27 mutual fund schemes (growth option) manage over ₹30,000 crore, with more than ten exceeding the ₹50,000 crore mark? Together, these giant funds account for nearly ₹11 lakh crore, or about a quarter of the industry's total Assets Under Management (AUM). In the entire universe of 343 equity schemes, these 27 are effectively the industry's heavyweights. Large-cap behemoths such as Parag Parikh Flexi Cap (₹1.34 lakh crore), HDFC Top 100 Fund (₹1 lakh crore), and HDFC Mid Cap (₹94,257 crore) are significantly larger than many listed firms.
As equity fund AUM swells, some schemes are becoming too large to ignore. That revives an old question: does size hurt performance? As funds grow, deployment of capital can become more difficult, and returns can suffer, especially during market corrections when liquidity is thin. Is it time to shift to smaller, more nimble funds? A BL portfolio analysis of the largest schemes across key active equity categories over the past five years suggests that size, by itself, is not a handicap.
WHAT WE STUDIED
The study aims to understand how large-sized funds perform compared with their peers in actively managed equity categories such as large-cap, mid-cap, small-cap, and flexi-cap. To do this, we selected the top three funds by AUM as of February 2021 and tracked their performance over the following five years against other funds in their categories. The analysis covers 27 large-cap funds, 24 mid-cap funds, 22 small-cap funds, and 24 flexi-cap funds. At the time of selection, the chosen funds had assets ranging from ₹7,311 crore to ₹34,515 crore, already considered quite large given the market depth then.
We then evaluated their performance relative to peers over the next five years, from March 2021 to March 2026, using rolling returns. Both one-year and three-year rolling returns were computed and ranked into quartiles, from the top quartile (Q1) to the bottom quartile (Q4).
RESULTS
- Top Performance: The largest fund in each category delivered strong and consistent performance. ICICI Pru Large Cap Fund had 100 per cent of its three-year rolling returns in the top two quartiles (Q1 and Q2). Similarly, HDFC Mid Cap Fund and Nippon India Small Cap Fund delivered impressive results, with the latter's returns being entirely in the top two quartiles.
- Mixed Outcomes: When the analysis is expanded to the top five funds, outcomes become more varied. While some funds dominate top-quartile rankings, others such as UTI Flexi Cap, Axis Large Cap, and DSP Midcap saw all their three-year returns fall in the lower quartiles (Q3 and Q4). Among the 12 largest funds studied, five consistently outperformed, four delivered mixed results, and three underperformed.
- Rapid Scaling: Several funds that were small in 2021 have scaled up significantly while delivering strong returns. Parag Parikh Flexi Cap grew from ₹7,452 crore to ₹1.34 lakh crore, while Quant Small Cap grew from ₹135 crore to ₹27,654 crore.
WHY IT WORKS
Consistent outperformance remains the key trigger for inflows, as investors naturally gravitate towards funds with strong track records. Market cycles also play a role, with mid- and small-cap schemes seeing higher inflows during bullish phases. At the core, these schemes are carefully constructed by fund houses through strong research, disciplined portfolio construction, and continuous monitoring.
SIZE EDGE
Large funds benefit from economies of scale, deeper research capabilities, and stronger engagement with company managements. While size is less of a constraint for large-cap and flexi-cap funds, capacity constraints are more relevant in mid- and small-cap funds where deploying large inflows into relatively illiquid stocks can raise entry costs. Large schemes, such as Nippon India Small Cap Fund, mitigate this by maintaining highly diversified portfolios (244 stocks as of February 2026).
TAKEAWAYS
Size alone is not a red flag. The biggest fund in each category generally held up well, though performance can vary across other large funds. Large size usually becomes a problem only when market conditions turn and liquidity tightens. Until then, strong returns can continue in growth cycles. Investors should judge not just returns, but whether a fund can stay true to its strategy as it gets bigger.
Performance quartile distribution of top mutual fund schemes by assets
| Category | Top 5 schemes by AUM (Feb 2021) | AUM (Feb 21, ₹ Cr) | AUM (Mar 26, ₹ Cr) | Q1 (%) | Q2 (%) | Q3 (%) | Q4 (%) |
|---|---|---|---|---|---|---|---|
| Large Cap | ICICI Pru Large Cap | 27,033 | 77,452 | 100 | 0 | 0 | 0 |
| SBI Bluechip | 26,818 | 55,246 | 50 | 21 | 0 | 29 | |
| Axis Bluechip | 22,748 | 29,913 | 11 | 0 | 33 | 56 | |
| Mid Cap | HDFC Mid Cap | 26,358 | 94,257 | 100 | 0 | 0 | 0 |
| DSP Midcap | 10,558 | 16,941 | 0 | 0 | 24 | 76 | |
| Kotak Emerging | 10,431 | 61,694 | 0 | 86 | 14 | 0 | |
| Small Cap | Nippon India Small Cap | 11,911 | 67,642 | 100 | 0 | 0 | 0 |
| HDFC Small Cap | 10,033 | 37,424 | 28 | 65 | 7 | 0 | |
| SBI Small Cap | 7,311 | 34,515 | 0 | 26 | 0 | 74 | |
| Flexi Cap | Kotak Flexicap | 34,515 | 58,453 | 0 | 87 | 13 | 0 |
| HDFC Flexicap | 23,711 | 24,535 | 100 | 0 | 0 | 0 | |
| Parag Parikh Flexi Cap | 7,452 | 1,34,253 | 100 | 0 | 0 | 0 |
(Note: Rolling returns calculated for the last five year (Mar 2021 to Mar 2026). Top five funds by asset as of Feb 2021 from key active equity categories are shown.)
On a precipice
INDEX OUTLOOK. Benchmark indices not seeing strong follow-through buying By Gurumurthy K
Nifty 50, Sensex and the Nifty Bank fell for the fifth consecutive week. Sensex and Nifty were down about 1.5 per cent each, while the Nifty Bank on the other hand fell over 2 per cent last week.
The benchmark indices witnessed a bounce initially last week. However, the momentum failed towards the end of the week and the indices gave back all the gains. This pattern of moving up in the first half and then ending the week on a weak note is now happening for the second consecutive week. It indicates the absence of follow-through buying at higher levels, suggesting that the overall sentiment remains weak. That leaves the downside open for the Nifty 50 and the Nifty Bank to fall further.
However, key supports are coming up. We will have to see if these supports can force a recovery and if the indices manage to bounce back or not.
SELLING SPREE
Foreign Portfolio Investors (FPIs) sold Indian equities for the second consecutive week. The equity segment saw a net outflow of about $2.73 billion. This month, there is a total net outflow of about $12.3 billion.
NIFTY 50 (22,819.60)
Nifty was down 1.6 per cent last week. The downside resistance is now seen at 23,200. A bounce from there can take the Nifty higher to 23,500-23,700. For now, the Nifty could index in a range of 22,200-24,000 for some time.
A rise above 24,000 is needed to bring back the bullish outlook. Until then, more selling will come under more selling pressure at higher levels. If that happens, 21,700 could be seen. Our preference will be to see the Nifty sustaining above 21,700.
Medium-term view: The region between 22,200-22,000 will be a very crucial support. A bounce from there and a subsequent rise above 24,000 will be bullish to resist 26,000-26,400. That will also keep the broader-sideways range intact.
As mentioned last week, Nifty has to breach 26,400 to bring back the bullish outlook of seeing 28,000 and 30,000 on the upside. For this to happen, Nifty has to sustain above 22,000. Nifty will come under danger of further fall only if it breaks below 22,000 and declines below 21,700 eventually.
NIFTY BANK (52,274.60)
Short-term view: An immediate support is at 52,000. Nifty Bank index looks vulnerable to break this support. Such a break can drag the Nifty Bank down to 50,500 and not beyond that.
A bounce from the 50,800-50,500 support zone can take the Nifty Bank index higher to 54,000 again. A decisive break above 54,000 is needed to get some relief.
Medium-term view: The region around 50,500 is a crucial support. A bounce from there and a subsequent rise above 54,000 are needed to turn the sentiment positive. Only then the upside will open up for a rise to 60,000 again. That has to bring back the chances of seeing 64,000-65,000 and 68,000-69,000 in the long term.
But if the Nifty Bank index breaks below 50,500, there is a danger of seeing 48,000. So, the price action around 50,500 will need a close watch.
SENSEX (73,533.22)
Sensex has been in the intermediate support at 72,800 has held well last week. But failure to sustain the bounce has increased the chances of the Sensex breaking below 72,800 this week. Sensex index has tumbled down to 72,250, the next immediate support. The resistance for Sensex is to sustain above 72,250 and rise back to 76,000-77,000.
CRUCIAL SUPPORTS
- Nifty 50: 22,200, 22,000
- Sensex: 72,250, 72,000
- Nifty Bank: 50,800, 50,500
NIFTY MIDCAP 150 (19,952.75)
The fall to 19,200 almost happened last week. The index touched a low of 19,384.45 and has risen back. There is no major change in the view. Important support is in the 19,200-19,000 region which can be tested in the short term.
We expect the Nifty Midcap 150 index to sustain above 19,000 and rise back to 21,000 and even higher. A subsequent rise above 21,000 will then take the index higher to 22,800 over the medium term. From a big picture, Nifty Midcap 150 index has to breach 22,800 in order to bring back the earlier bullish view of seeing 26,000-26,500 in the medium term and 28,000-28,500 in the long term. On the other hand, if the index breaks below 19,000, a fall to 18,300-18,100 can be seen.
NIFTY SMALLCAP 250 (14,685.35)
The crucial support level of 14,000 seems to be holding well. However, the index seems to lack strength for a sustained bounce.
We retain our broader bullish view. As long as the Nifty Smallcap 250 index stays above 14,000, there is the potential to rise back and breach 16,000. Such a break will trigger the momentum to target 22,500-23,000 in the long term. As mentioned last week, the bullish view will get negated only if the index breaks below 14,000. If that happens, 13,000 can be seen on the downside.
Knocked down
US MARKET OUTLOOK. US benchmark indices can fall further By Gurumurthy K
The Dow Jones Industrial Average, S&P 500 and the NASDAQ Composite indices were beaten down last week. The US Federal Reserve’s decision to leave interest rates unchanged had a negative impact on the sentiment. The Dow Jones fell 4 per cent last week. The S&P 500 and the NASDAQ Composite index were down by 2.1 per cent and 3.2 per cent respectively.
The Dow Jones has now lost about 9 per cent in the last five weeks. The S&P 500 and the NASDAQ Composite index have declined 7.8 per cent and 8.5 per cent respectively in the same period.
The Dow Jones is coming close to its key support levels. The S&P 500 and the NASDAQ Composite are still vulnerable to fall more.
The weakness in these two indices may keep the Dow Jones vulnerable to break below its upcoming support. We will have to wait and see what happens.
The dollar index remained stable last week while the Treasury yields continued to rise.
DOW JONES (45,166.64)
A crucial support is in the 45,000-44,800 region. A bounce from this support zone can give some relief for the Dow Jones. That in turn can trigger a corrective rise to 46,000-46,500.
But, there needs to be some caution since the other two benchmark indices are looking weak. So, the chances of the Dow Jones breaking below 44,800 cannot be ruled out. If that happens, then the current fall can extend to 44,000.
The price action in the 45,000-44,800 region will need a close watch this week.
S&P 500 (6,368.85)
The fall below 6,400 mentioned last week has happened as expected. The S&P 500 index touched a low of 6,290.
Strong resistance is now in the 6,400-6,470 region which can cap the upside if there is an intermediate bounce.
As long as the index trades below 6,470, the broader outlook is bearish. The S&P 500 index can fall to 6,200-6,180 from here.
A decisive break above 6,470 is needed to bring back the bullish view of seeing 6,800-6,900 again.
NASDAQ COMPOSITE (20,948.36)
Last week we had expected a corrective bounce from 21,200 first and then a fresh fall breaking below 21,200. But instead, the NASDAQ Composite index has declined below 21,200 without seeing a corrective rise. That keeps intact our broader bearish view.
But that looks unlikely now.
Immediate resistance is around 21,400. Above that, 21,800-22,000 will be the next strong resistance region. We expect the NASDAQ index to remain below 21,800 itself. The NASDAQ Composite index can fall to 20,300 and even 19,800 in the coming weeks.
DOLLAR INDEX
The US dollar index (100.19) remained stable and range-bound last week. The index has been oscillating between 99.85 and 100.50 over the last couple of weeks.
The bias remains positive. Support is in the 99.50-99.30 region while it is holding very well. The dollar index can rise to 101-101.20 in the coming weeks.
A decisive break above 101.20 can boost the momentum. Such a break can take the dollar index higher to 103-104.
Failure to breach 101.20 can drag the index down to 100-99.50. Our preference is to see the dollar index rising above 101.20 if not in this week, then surely in the next.
TREASURY YIELD
The US 10Yr Treasury Yield (4.43 per cent) has risen further as expected. That keeps intact our broader bullish view.
Immediate resistance is at 4.45 per cent. A decisive break above this resistance can take the 10Yr Treasury Yield higher to 4.6 per cent in the coming weeks.
The yield has to decline below 4.3 per cent to turn the outlook negative. But that looks less likely for now. As such the rise to 4.6 per cent is likely to happen first.
Centre extends EV incentives under PM E-DRIVE scheme
By Amit Vijay Mahile, New Delhi
Electric two- and three-wheeler makers have welcomed the Centre’s decision to extend the PM E-DRIVE scheme till March 2028, even as the move draws a clear distinction between expensive, premium electric vehicles for two-wheelers to July 2026, while continuing support for last-mile electric three-wheelers.
In a notification issued on March 27, the Ministry of Heavy Industries said the scheme, launched in October 2024, will remain in force till March 31, 2028, or until the funds are exhausted, after which “no further claims will be entertained”. It added that subsidies for expensive electric two-wheelers will apply only to vehicles registered on the portal till July 31, 2026, with support continuing at ₹2,500 per kWh, capped at ₹5,000 per vehicle.
The Ministry, however, said incentives for e-rickshaws and e-carts will continue for the full duration of the scheme, i.e., till March 31, 2028, unless funds are exhausted earlier.
TWO-WHEELERS
Industry experts said the change creates a compressed window for expensive two-wheelers, setting up what many describe as a “registration cliff” ahead of the July deadline.
“The extension ensures continuity for the entire ecosystem, urging the industry to move towards a more self-sustaining model. For electric two-wheelers, this transition phase is critical as manufacturers recalibrate pricing, localisation and scale,” said Hemant Kabra, Founder and Managing Director of Wardwizard.
3W SEGMENT
For the three-wheeler segment, which continues to receive longer policy support, sentiment is more positive. Uday Narang, founder and Chairman of Omega Seiki Mobility (OSM), said the decision reinforces the government’s focus on last-mile electrification.
Such incentives for electric two-wheelers now applicable only till July 2026; OEMs contacted by businessline said they are in the process of evaluating whether to sustain or recalibrate these offers.
No comments:
Post a Comment