Are we closer to an India-US trade deal?

Retail inflation uptick, TCS Q3 mixed, and Razorpay plans an IPO.

🗓️ Morning, folks! ☀️

It was a good Monday for the markets, and a few upbeat lines from Washington helped seal the mood.

Stocks rebounded sharply to close higher after positive remarks from the US Ambassador. The Sensex and Nifty ended up about 0.4% each.

Ambassador Sergio Gor called India America’s most important ally and confirmed that the next round of trade discussions begins today.

The headlines also lifted critical mineral stocks. Tata Steel and Hindustan Copper rose up to 5% after Gor said India will join Pax Silica, a US-led initiative tied to AI and supply chain security.

💡 Spotlight: Inflation hits three-month high 📈

India’s retail inflation rose to 1.3% in December from 0.7% in November, a three-month high. The main reason is food prices aren’t falling as sharply anymore, and the “easy base” from last year is starting to fade.

Food inflation is still in the negative at -2.7%, but the drop is slowing and month-on-month numbers suggest prices are quietly firming up.

In other news,

After Venezuela’s long-time president Nicolás Maduro was arrested in a US operation codenamed Operation Absolute Resolve, Trump took to Truth Social with a Wikipedia screenshot that cast him as Venezuela’s acting president.

Let’s hit it!

1 Big Thing: TCS profit dips but AI runs hot ⚡️

TCS just kicked off the IT earnings season with its Q3 results that were largely in-line with what the street was expecting.

The key numbers:

Net profit: down 11.7% at ₹10,657 cr vs ₹12,075 crore (QoQ)
₹ Revenue: up 2% at ₹67,087 crore vs ₹65,799 crore (QoQ)

What’s poppin’: the big highlight was AI. TCS said it now makes about $1.8 billion a year from AI-related work, and that business grew 17.3% from last quarter. That’s far faster than the company’s overall growth of about 2% in the same period.

TCS said clients are still spending on things like cloud systems, data setup, and cybersecurity, along with upgrading old IT systems.

On the people front, the company’s headcount fell by 11,151 employees during the quarter to 582,163.

Bottomline: the broader IT services sector is expected to see only moderate growth in Q3FY26. Demand hasn’t meaningfully improved. The deal pipeline is steady but not accelerating, and global uncertainty persists, including macro risks like tariff worries and trade-war chatter.

2. It’s raining investments 💸

Companies across energy, ports, manufacturing, and technology have announced fresh investments worth ₹8.6 lakh crore in Gujarat over the next five years.

Who is investing what:

Reliance Industries’ green energy push: the company will invest ₹7 lakh crore over the next five years, doubling its earlier commitment.

The funds will build the world’s largest green energy ecosystem in Jamnagar, spanning solar, green hydrogen, and sustainable aviation fuel.

The company also plans a multi-gigawatt solar project in Kutch, India’s largest AI-ready data centre in Jamnagar.

Adani Group’s energy and ports expansion: the Adani Group announced an investment of ₹1.5 lakh crore in Kutch region over the next five years.

The focus is on completing the Khavda renewable energy project and commissioning the full 37 GW capacity by 2030. The group also plans to double port capacity at Mundra over the next decade, reinforcing Kutch’s role as India’s largest energy and logistics hub.

Jyoti CNC: the company will invest ₹10,000 crore in Gujarat over the next five years for advanced manufacturing, research and development, and skill development.

3. Lemon Tree Hotels splits into two 🏨

Lemon Tree Hotels shares ended with gains after the company announced a major rejig of its business, along with a new investor coming in.

What’s happening: the company is splitting its business into two separate parts. Lemon Tree Hotels will run the “asset-light” side, which basically means managing hotels, running daily operations, and building the brand.

Fleur Hotels will run the “asset-heavy” side, which means owning hotel properties and developing new ones.

The biggest headline is Warburg Pincus’ entry as a strategic investor in Fleur Hotels. As part of the transaction, Warburg will buy APG’s entire 41.09% stake in Fleur Hotels.

APG, a large Dutch pension fund manager, already owned 41.09% of Fleur Hotels before this restructuring.

After the restructuring, Lemon Tree Hotels shareholders will directly own 32.9% of Fleur Hotels, Lemon Tree Hotels itself will hold 41.03%, and Warburg Pincus will own the remaining 26.01%.

4. Andhra can’t get enough of solar power ☀️

Websol Energy System gained after Andhra Pradesh cleared its mega solar manufacturing project.

The deets: the government has approved Websol’s greenfield 4 GW solar cell and 4 GW solar module facility in Tirupati.

The company will also set up a 100 MW captive solar power plant to supply clean power directly to the facility.

Why it matters: captive renewable power means lower energy costs and stable supply, which is critical for energy-heavy solar manufacturing.

India’s low-carbon power generation is steadily rising, with solar and wind now forming a meaningful share of the electricity mix.

5. What’s behind Cupid’s 300% rally? 💘

Shares of Cupid have surged over the past year, delivering 300%+ returns, driven by a strong order pipeline, expansion plans, and an improving earnings outlook.

What they do: Cupid is a leading Indian maker of sexual wellness products, best known for condoms, lubricants and diagnostic kits, with a focus on sexual health and HIV prevention.

What happened last week: the company’s shares were in the spotlight after hitting a 20% lower circuit on January 2, snapping a 13-day rally after being placed under the surveillance framework.

The stock has since recovered and regained ground, easing concerns after the sharp correction.

The macro scene: a favourable rupee is supporting margins and overseas business. Management sees no material impact from tariffs or trade tensions on FMCG or global B2B expansion.

The global sexual wellness market is set to more than double from $68 billion in 2024 to $156 billion by 2034, growing at nearly 9% rate, creating a strong long-term demand tailwind for Cupid’s core business.

6. Stocks that kept us interested 🚀

1. KP Green bags ₹819 crore BSNL 4G order 📡

KP Green Engineering gained 3% after it won ₹819 crore worth of advance work orders from BSNL under the government’s 4G Saturation Project.

The deets: the orders span two large clusters across multiple states, making this the biggest contract win in KP Green’s history.

₹483 crore for Cluster C covering Maharashtra and Goa
₹336 crore for Cluster J covering Jammu & Kashmir, Ladakh, Uttarakhand, and Himachal Pradesh

KP Green will supply and erect ground-based telecom towers, provide infrastructure-as-a-service, and handle operations and maintenance for five years, with a possible five-year extension.

2. TANFAC seals long-term Japan deal 🇯🇵

TANFAC Industries landed a long-term overseas deal, and the market liked it. The stock rose more than 2% after the company announced a seven-year supply contract with a Japanese customer.

It makes fluorine-based industrial chemicals that are used by big industries like aluminium, steel, fertilisers and pharmaceuticals. Some of its key products include hydrofluoric acid and aluminium fluoride.

The deal: TANFAC will supply 7,500 metric tonnes of fluorinated chemicals to the Japanese customer. The contract is estimated to be worth about ₹337.5 crore per year.

Why does this matter: it fits with TANFAC’s plan to move further into higher-value fluorinated products and deepen relationships with global customers.