Jairam Varadaraj, MD, Elgi Equipments | Photo Credit: BIJOY GHOSH

The opportunities are global in our sector (compressors). About $25 billion in value and growing at 3-4 per cent annually. While our growth is much higher than the market growth, our share is still minuscule. Aspiring for a reasonable share of this large market is the opportunity. This needs a higher velocity of growth.

The challenges are primarily related to cost-competitiveness and market reach. The presence of Chinese players disrupts costs beyond economics and rationale. We need to dig deep into technology-based solutions in response to predatory pricing. As an unknown brand with a ‘made in India’ label, gaining access to customers is a slower process. Finding creative solutions to accelerate this will be our challenge.

AI will certainly be a differentiator. But it depends on how it is deployed. The problem or opportunity statement addressed with AI should be precise and clear. Otherwise, AI deployment will become a fashion that fades with time. Our effort is in discovering the problems and opportunities that can be best addressed by AI. This is an iterative process, and investment in time and effort would be good at this stage.

Improved infrastructure is unlocking new destinations

The Indian hospitality sector remains on a strong and steady growth path, supported by resilient travel demand and the country’s broader progress towards Viksit Bharat. Domestic leisure travel continues to be the primary driver, complemented by corporate travel, MICE, weddings, and spiritual tourism, creating a diversified and consistent demand base across metros as well as emerging markets.

Sustained investment in airports, roads, rail, and regional connectivity is strengthening tourism corridors and enabling more balanced growth beyond the metros. Improved infrastructure is unlocking new destinations, expanding the tourism footprint, and supporting demand across a wider set of geographies.

The next phase of growth will be driven by thoughtful market expansion, increased use of conversions to scale up efficiently, and flexible franchise models aligned with owner expectations. Pilgrimage centres, leisure destinations, and industrial towns are seeing rising interest, supported by the government’s focus on destination development and connectivity. Tier 2 and Tier 3 cities will remain central to this growth, contributing meaningfully to employment generation, local economies, and regional development.

However, disciplined execution will be essential. Managing new supply, building and retaining talent, maintaining service consistency, and addressing cost pressures will require a continued focus on operational excellence, guest experience, and responsible business practices, including sustainability.

Overall, the outlook for 2026 remains positive. With demand holding firm across segments, the hospitality sector is well positioned to support India’s long-term tourism ambitions while contributing to inclusive and sustainable economic development.

Deeper penetration in core categories will be key to growth

2025 marked a phase of steady growth for the Indian FMCG sector, driven by improving demand conditions, easing inflation, and a recovering consumer base. Rural consumption made a strong come back, along with the premiumisation trend in urban markets. Convenience, the rising preference for branded offerings, and rapid adoption of digital ecosystems remained imperative, while modern trade channels sustained their upward trajectory. A defining development, the GST rate reduction proved transformational for the FMCG sector, thereby improving affordability and accessibility.

Looking ahead, we remain confident in the growth outlook. Demand fundamentals remain strong, rural recovery is gaining momentum, and new-age consumption is being shaped by digital adoption, accessibility, premiumisation; and supportive policy measures are expected to further boost consumption. Our growth strategy will continue to focus on deeper penetration in core categories, sustained diversification in foods and personal care, continued momentum in international markets, and the expanding reach of Project SETU (a direct distribution strategic initiative). We are confident of delivering sustained and profitable growth.

Fresh govt thrust on infra would help in capacity utilisation

Cement trails in the hierarchy of ‘roti, kapada aur makaan‘. Thus, the impact of GST 2.0 was felt within construction, as evident even in real estate sales numbers. Overall, 2025 was a mixed year for the cement Industry, with a modest increase in volumes but weak realisation. Contrary to market expectations, a spate of consolidation in the sector did not lead to pricing discipline. This was not as much due to capacity overhang as post-acquisition brand rationalisation across price points and the aggressive pricing strategy of regional players anxious about retaining market share. The trend is likely to carry over into 2026 as well.

While the central government’s thrust on infrastructure continued, many states, distracted by elections, prioritised funding for social welfare schemes over infrastructure development. There was a slowdown even in schemes like PMAY (Pradhan Mantri Awas Yojana) and PMGSY (Pradhan Mantri Gram Sadak Yojana) due to delay in release of State’s share of funding. This is expected to change in the coming year, especially if the central government provides a fresh thrust to infrastructure — which would help improve capacity utilisation and absorption of upcoming capacities. This would be a silver lining for the industry, coupled with higher disposable income in the hands of rural consumers following a fair kharif season, to look at 2026 with cautious optimism.

Scale and strong brand names will drive growth in the dairy sector

The past five years have been challenging for the dairy industry, with the impact of the Covid-19 pandemic as well as the changing weather patterns. While we can cope with known factors, the unknown variable has been the weather and its impact but the industry has been adapting and coping.

Last year saw the dairy industry consolidating, and this trend will gain pace. Size is the name of the game and it also brings economies of scale, so we will see more consolidation as bigger dairies get larger with a bigger footprint.

We expect 2026 to be better than the last few years, and we will see more direct procurement from farmers. Brands will command a premium and drive growth for companies. The future is bright for larger dairies with strong brand names.

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Published on January 5, 2026