Eye on India | FY26 Q1
The first issue, published on Independence Day 2025. Inflation had collapsed to 1.7%, real wages were rising fastest in rural India, and quick commerce had just overtaken food delivery.
We published the first Eye on India on 15 August 2025, which felt like the right day for it. Stan Druckenmiller says he reads the macro through the micro, letting company-level clues assemble the broader picture, and that is the method here. Fifty-odd earnings calls across our six focus sectors, read for what the people running Indian businesses were actually saying.
What they described was an economy with an unusual amount of room.
Disinflation gave households a raise
Headline CPI ran at roughly 1.7%. Wholesale prices had gone negative outright.
That did two things at once. It let the RBI cut the repo rate by 100 basis points and the cash reserve ratio by another 100, with the CRR cut still to work through the system between September and December. And it turned ordinary nominal wage growth into real wage growth: urban real wage growth improved by 455 basis points, rural by 615.
Rural outpacing urban is the detail worth holding onto. It showed up again in the company calls, where managements described rural markets outgrowing urban for a fifth consecutive quarter, with the Hindi belt growing at close to three times the national rate.
Foreigners sold; households bought
The current account swung to a $13.5bn surplus, helped by softer oil, lower gold imports, rising services exports and steady remittances. Foreign exchange reserves sat near a record.
Underneath that, two flows ran in opposite directions. Foreign institutional investors were flat to negative for a second consecutive year. Domestic retail money went the other way, with monthly SIP inflows at an all-time high and up around 135% since July 2022.
The Indian household was funding the Indian market.
Quick commerce crossed a line
This was the first full quarter in which quick commerce revenue exceeded food delivery revenue at India’s largest platform, taking the group to roughly $10bn of annualised B2C order value.
The mix moved faster than the top line. Non-grocery went from 6.6% of the business to 18.5% in a single year, which is the number that decides whether quick commerce is a grocery channel or a general retail channel.
The most interesting response came from the incumbent that is not playing. Asked how DMart intends to counter ten-minute delivery, its management said the answer is “not actually really digital. One of the best ways to counter quick commerce is to have more and more DMart stores.”
The consumer got better tools
One consumer-facing management put the change plainly: shoppers used to spend about seven minutes comparing across five apps and calling the store, and AI now does that for them. Their conclusion was that price increases would be harder to push through.
The same calls described a discretionary basket that is wider than the categories suggest. One executive framed the household decision as whether to buy a three lakh rupee necklace or take the family to Thailand – two purchases that sit in different sectors and compete for the same money.
Travel has the longest runway in that basket. Just over 4% of Indians travel by air, against more than 37% in China and over 85% in the United States.
The grid held
Peak power demand reached roughly 244GW and was met with no shortage at all.
That is worth a line on its own, because it is the sort of thing that only gets noticed when it fails. The capacity build of the previous decade is now carrying a load that would have caused rolling blackouts a few years ago.
What we took away
An economy with disinflation behind it, rate cuts flowing through, real incomes rising fastest where they had been weakest, and a domestic saver replacing the foreign investor at the margin. The constraint was not demand.
We built Meritus to practise investing as a craft and as a partnership, and publishing what we find is one small way to honour that. Thanks to Ram Parameswaran, who publishes the excellent A Few Things We Learned, and to Viraj Yadav for helping put the issue together.
Onward and upward.
Read the full issue – 83 pages, across macro, platforms, consumer, financials, industrials, services and healthcare.
