As the nation begins its busiest part of the year marked by a string of Hindu festivals and monsoon harvests, consumer demand is skyrocketing. Companies selling everything from shampoos to jewelry to baby formula to watches are reporting robust demand — and even managing to raise prices. Yet the stocks of bellwethers like Hindustan Unilever Ltd. and Maruti Suzuki India Ltd. have sunk to multiyear lows.
Indian stocks have underperformed global markets for more than two years, losing nearly half their value, as foreign capital fled. Disappointing earnings, scant exposure to the artificial-intelligence boom, and external shocks such as US tariffs and oil-price spikes from the Iran war have all weighed on returns. As global money managers ran out of reasons to invest, some bulls nursed one hope — that once consumer demand accelerated, corporate earnings would improve, offsetting the drag and reviving returns.
