They emerge slowly, through numbers that improve quietly, through balance sheets that strengthen year after year, and through businesses that begin to matter a little more to the economy than they once did.
India’s market in 2026 is likely to be far more discerning than it was during the liquidity-fuelled years of the past decade. Capital is no longer cheap. Growth is no longer enough on its own. Balance sheets, return ratios, cash flows, and predictability are back in focus.
This shift matters because leadership in the coming years will not be about who can grow the fastest for two quarters, it will belong to businesses that can sustain growth over longer periods.
As Q3 earnings kick off, and India Inc’s corporate profitability set to improve further, growth stocks will be in focus.
In this editorial, we look at six growth stocks that could fare well in 2026 and continue their growth trajectory.
#1 State Bank of India (SBI)
For decades, State Bank of India (SBI) was treated as a proxy for the Indian banking system rather than a business in its own right.
Investors expected scale but not efficiency, stability but not superior returns. That perception has changed dramatically over the past few years.
In FY25, SBI reported total income of over ₹4.9 trillion and net profit exceeding ₹80,000 crore.
This was not a one-off recovery year driven by write-backs or accounting tailwinds. It was the outcome of improvement across asset quality, operating efficiency, and balance sheet discipline.
The bank’s net NPAs have declined in the past five years to around 0.6%. For a bank of SBI’s size, these numbers would have seemed implausible a decade ago. Credit costs have moderated, and provisioning coverage remains comfortable, giving the bank resilience against future stress.
SBI’s loan growth continues at a healthy pace of around 14-16%, broadly in line with system growth but far more balanced than in earlier cycles. Retail lending now accounts for roughly 40% of advances, while exposure to stressed corporate segments has reduced meaningfully.
This shift has improved margins and stability. Its net interest margins (NIMs) have held steady near 3.2-3.3%, supported by a low-cost deposit franchise. Despite intense competition for deposits across the system, SBI’s CASA ratio remains among the strongest in the industry, allowing it to protect spreads even in a rising rate environment.
What stands out is the operating leverage now visible in the business. With credit costs under control and digital investments already absorbed, incremental growth is translating more directly into profits.
Over the past five years, SBI’s revenue and net profit have grown at CAGR of 13% and 31%, respectively.
The PSU bank’s leadership potential heading into 2026 does not lie in aggressive expansion. It lies in inevitability. As India’s credit penetration rises and formal finance reaches deeper into the economy, SBI’s reach, brand, and balance sheet position it to capture a disproportionate share of that growth, without taking disproportionate risk.
#2 HCL Technologies
The global IT services industry is at an inflection point. Client spending has slowed, discretionary projects are being scrutinised, and artificial intelligence (AI) is forcing companies to rethink delivery models.
In such an environment, visibility matters more than optimism. HCL Technologies has responded not with loud promises, but with quiet execution.
In FY25, HCL reported revenue of ₹1.2 trillion (tn) while its net profit surged to ₹17,400 crore. Growth has not always been industry-leading, but margins have remained resilient at 18-19% despite currency volatility and wage pressures.
Over the past five years, its sales and net profit have grown at a CAGR of 11% and 10%.
Returns on equity and ROCE have averaged 22% and 29% during the same period.
The composition of HCL’s business explains much of this resilience. Engineering services, infrastructure management, and enterprise technology make up a large part of revenues and are mission-critical rather than optional. These contracts are sticky, long-term, and less prone to sudden cancellation.
Deal wins over the past year exceeded $9 billion, providing multi-year revenue visibility. The company’s order book suggests stability rather than acceleration, but that is precisely what the market values during uncertain cycles.
HCL’s approach to AI has also been pragmatic. Rather than positioning AI as a threat to billing rates, the company has integrated automation into service delivery to improve productivity while maintaining client value.
The IT major’s balance sheet remains strong, with consistent free cash flow generation supporting dividends and buybacks.
For the rest of FY26, the company’s management has guided 3-5% revenue growth in constant currency, led by services and Ebit margins between 17% and 18%.
#3 Bharti Airtel
Very few sectors have destroyed as much shareholder value in India as telecom. For years, Bharti Airtel operated under relentless pressure, price wars, regulatory uncertainty, and heavy capital expenditure left little room for optimism.
That phase appears firmly behind it.
In FY25, Bharti Airtel reported consolidated revenue of ₹1.7 trillion, with Ebitda margins of nearly 50%. Average revenue per user crossed ₹210, driven by tariff hikes and increasing data consumption.
Over the past five years, Bharti Airtel’s revenue has grown at a CAGR of 15.4%. Over seven years, revenue has grown at 11%, while profit has grown at an astonishing 50%.
The company has averaged ROE and ROCE of close to 15%.
The transformation extends beyond mobile services. Enterprise connectivity, cloud solutions, and digital services are becoming increasingly meaningful contributors.
Nxtra, the data centre arm, now operates more than 120 MW of capacity and continues to expand in line with India’s growing demand for digital infrastructure.
The company’s capital expenditure peaked during the 5G rollout. As network investments moderate, free cash flows are expected to improve materially over the next two years. Its net debt has already begun trending downward, easing balance sheet pressure.
Airtel’s journey from survival to strength is nearly complete. What lies ahead is the consolidation of that advantage.
#4 Affle 3i
Digital advertising is frequently associated with volatile spending and intense competition. Yet Affle’s model has consistently delivered profitability and cash flows.
In FY25, the company reported revenue of ₹2,270 crore while its net profit came in at ₹380 crore. Net margins of 18% and return on equity exceeding 20% reflect the efficiency of its platform-driven approach.
Over the past five years, Affle’s sales and net profit have grown at a CAGR of 47% and 42%, respectively.
Its ROE and ROCE have averaged 20% during the same time.
Affle focuses on mobile-first consumer intelligence, helping advertisers acquire users based on measurable outcomes rather than impressions. As marketing budgets shift toward accountability and return on investment, this proposition gains relevance.
Affle’s geographic diversification has also improved. A significant portion of revenues now comes from outside India, reducing dependence on any single market. The business remains asset-light, with minimal capital expenditure requirements.
What makes Affle particularly interesting is its operating leverage. Incremental revenue does not require proportional increases in cost, allowing profits to scale faster over time. Affle’s free cash flow generation has been strong, and the balance sheet remains debt-free.
Going forward, Affle stands to benefit from the digital leap as leadership in these businesses belong to platforms that quietly become indispensable.
#5 PG Electroplast
Manufacturing stories rarely excite investors early. Returns build slowly, capacities take time to stabilise, and margins expand only after years of execution. PG Electroplast fits this pattern.
In FY25, the company reported revenue of ₹4900 crore, while its profit came at ₹290 crore. Its operating metrics have improved, supported by higher utilisation, automation, and a better product mix.
The company supplies plastic moulded components and assemblies to consumer electronics and automotive OEMs. Its increasing exposure to EV components, electronics manufacturing, and wiring harnesses aligns well with India’s push toward domestic manufacturing.
PG Electroplast’s recent capacity additions are beginning to translate into higher volumes. As utilisation improves, fixed costs are absorbed more efficiently, supporting margin expansion. Debt levels remain manageable and return ratios are steadily improving.
Over five years, the company’s sales and net profit have grown at a CAGR of 50% and 157%.
Its ROE and ROCE have averaged 12% and 17% during the same time.
Leadership in manufacturing is rarely glamorous. It is built on reliability, scale, and long-term customer relationships. PG Electroplast appears to be assembling those attributes patiently.
The company sees substantial opportunities in plastic moulding and the consumer durables segment, particularly in the ODM space for products like refrigerators, washing machines, and air conditioners.
The focus on improving operational efficiencies is expected to support profitability in the long run.
#6 ICICI Prudential AMC
India’s savings behaviour is changing, and asset managers are among the clearest beneficiaries of that shift.
ICICI Prudential AMC is the new company in the mix, which listed on BSE and NSE towards the end of 2025. The company’s business benefits from strong operating leverage due to its asset-light structure.
Equity-oriented assets have grown faster than industry averages, supported by steady SIP inflows. Even during periods of market volatility, investor participation has remained resilient.
Over the past five years, its sales and net profit have grown at a CAGR of 19.9% and 20.4%, respectively.
Its ROE and ROCE have averaged 73% and 98% during the same period.
As household savings continue to move from physical assets toward financial instruments, long-term flows into mutual funds are likely to rise, ultimately benefitting companies like ICICI AMC.
Conclusion
As India’s economy continues to evolve, certain sectors and stocks are set to grow faster than the broader market.
In this context, these six stocks stand out due to their exposure to structural growth themes and improving fundamentals.
While sector tailwinds offer long-term visibility, investors should closely track execution, financial performance, corporate governance, and valuations to decide whether these stocks deserve a place on their watchlist.
Happy investing.
Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such.
This article is syndicated from Equitymaster.com
