Will Third Quarter Results Power Markets Further?
India's benchmark Nifty 50 hit a record high on Friday in a broad-based rally
On Episode 765 of The Core Report, financial journalist Govindraj Ethiraj talks to Indrani Bagchi, CEO, Ananta Aspen Centre. We also feature an excerpt from our recent Energy Special featuring Vartika Shukla, Chairman and Managing Director at Engineers India Limited (EIL).
SHOW NOTES
(00:00) The Take
(05:19) Will third quarter results power markets further?
(08:52) Why Venezuela is unlikely to affect oil prices for now
(10:19) India’s car sales on strong wicket
(11:57) Will the US-India trade agreement be back on the front burner?
(20:04) Engineers India diversity of consulting work offers insights into the new energy mix globally
(29:04) A car company that Elon Musk laughed at has beaten him
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NOTE: This transcript contains the host's monologue and includes interview transcripts by a machine. Human eyes have gone through the script but there might still be errors in some of the text, so please refer to the audio in case you need to clarify any part. If you want to get in touch regarding any feedback, you can drop us a message on feedback@thecore.in.
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Good morning, it's Monday, the 5th of January and this is Govindraj Ethiraj broadcasting and streaming weekdays from Mumbai, India's financial capital. First, greetings and best wishes for a happy and healthy New Year 2026 and I do hope you've had the opportunity to take a break, being usually the time when everything slows down unless of course you are the United States and you're planning to attack a small but oil-rich Latin American country and more on that shortly.
The Take
In 2026, the real energy battle is on the demand side. What will be the big trends in 2026 that we are watching out for? Well, to go back to the trigger happy actions by the United States over the weekend, one big one for sure will be energy. The US military's lightning extraction of Venezuelan President Nicolas Maduro was a move reminiscent of the Cold War but the motivation was purely 21st century energy cravings.
By President Donald Trump's own admission, this wasn't just about democracy, it was about the world's largest oil reserves. For the United States, the gold is a nostalgic return to 1976, that's before nationalisation, when American oil giants were deeply enmeshed in Venezuela's oil economy. But as we enter into 2026, the flare-up in Caracas, the capital of Venezuela, is only half the story.
While the West remains obsessed with securing the supply of fossil fuels, the real revolution has been happening and is also potentially on the demand side in the world's most populous country, India. Last August, the United States slapped an additional 25% import duty on Indian exports, a punitive tax for India buying discounted Russian crude. Now that was a blunt instrument intended to signal that buying from Moscow is equal to funding the war in Ukraine.
The strategy, however messy, seems to have shown some results. Russian oil, which was almost 40% at peak of India's imports, fell to a three-year low of 25% as Indian refineries and refiners ducked the crossfire of secondary sanctions. Now that brings us to the demand side of the equation.
A conversation with Vartika Shukla, the Chairman and Managing Director of Engineers India Limited, a government-owned engineering consulting firm that helps build India's energy infrastructure, brought this to the fore for me last week. I asked her what was the one exciting project that her team had worked on in the last year that she would like to talk about. Bear in mind that Engineers India is busy building refineries, petrochemical complexes, and energy projects from Mongolia to Nigeria and Guyana to of course India, even as it is overseeing cutting-edge projects ranging from small modular nuclear reactors to sustainable aviation fuel.
But in that conversation two weeks ago at EIL's New Delhi headquarters, she pointed not to a refinery or petrochemical complex but to a solar cooker. Her team's pet project right now is an attempt to de-engineer the cost and weight of solar thermal cooking for the up on a project kick-started by state-owned oil giant Indian Oil Corporation. She told me that they wanted to see how they as a team could reduce the cost as well as the weight of a solar cooker so that it becomes more affordable and friendly to the masses.
Now that sounds simple and simplistic and even quaint until you look at the map. India imports more than 80 percent of its crude for a nation of 1.4 billion. Energy security isn't just about finding more oil, it's obviously about needing less of it.
Now this is not a new thinking as is quite evident from India's push towards renewable energy and we've also seen this play out with initiatives like the Ujala scheme. 10 years ago the Indian government bet that bulk procurement could turn LED bulbs from a luxury into a commodity. Today with some 368 million bulbs distributed and an estimated 2.3 billion dollars in annual electricity savings, the world's largest zero subsidy lighting programme as the can be effective in managing demand.
For example, it's curtailed over 9,000 megawatts of peak demand, the equivalent of several large coal plants, just by changing a light bulb. Now the 2026 trend to watch isn't just a supply story of American interventionism in South America, it's the demand story written in the consumer choices of countries like India. Whether it is the surge in electric two-wheelers and three-wheelers on Indian roads or the push for energy efficient households, the goal is clear, decoupling growth from the whims of petro-states.
Now as we navigate this complex here, the lesson for policy makers is stark. Managing the geopolitics of supply is going to be a reactive expensive game of whack-a-mole, but fostering conscious consumerism, perhaps even convincing the public that a 10-minute grocery delivery isn't worth the carbon footprint, is where the real sovereignty lies. In 2026, the most powerful energy asset isn't a well in Venezuela, it's an efficient circuit in New Delhi.
And that brings us to the top stories and themes for the day…
Will third quarter results power markets further?
Will the US-India trade agreement be back on the front burner now?
Why Venezuela is unlikely to affect oil prices for now?
India's car sales are on a stronger wicket.
Engineers India diversity of consulting work offers insights into a new global energy mix.
And a car company that Elon Musk laughed at has beaten Tesla.
Markets
India's benchmark nifty 50 hit a record high on Friday in a broad-based rally which was comprising financials metals and auto stocks on prospects of a strong earnings growth in the December quarter with the nifty hitting a record high of 26,340 before ending up at an all-time closing high level of 26,328. According to Reuters, the sensex was also up to 85,762 and the indices were up in the last week.
Indices are also up in Europe and the UK which saw new records. Though in India, the benchmarks have been fighting somewhat unsuccessfully to sustain their new peaks in November and December. And of course, we'll be waiting to see whether that will happen now with the new earnings season setting in.
Remember, foreign portfolio investors are continuing to pull out funds. They pulled out about 846 million in the first two trading sessions of January 2026. Last year, they withdrew about 19 billion dollars or close to 19 billion dollars thanks to a host of reasons including valuations.
That pressure also that's the sustained selling pressure also contributed to about a five percent appreciation of the rupee against the dollar. Meanwhile, since one must think long term, the sensex has completed 40 years and was also India's first stock market index as it happens. We're talking about the Bombay Stock Exchange sensex.
On January 2, 1986, sensex was 549. On December 30th, 2025, it was 84,675. So, the annualised sensex growth is about 13.4 percent over 39 years which is in line with nominal GDP growth of about 12.9 percent.
And the total return index compounded annual growth rate is about 14.3 percent. Amongst other shifts, at least in the last 20 years, financial services has doubled from 22 to 39 percent. This is the share of the sensex which is 30 stocks.
IT went from 20 to 13 percent and consumer discretionary went from about 5 to 13. So, financial services is at almost 40 percent. Now, you could say that this is a reflection of the financialization of the economy.
Now, all of this of course is to say that equities are a good bet if you do stay invested for the long term. Elsewhere, future stocks and indices will be quite likely in industries like electronics as newer and some older industries become the new plays. The government has approved projects worth about $4.6 billion from a host of companies to boost domestic manufacturing of electronics components under an incentive scheme according to the government which said so on Friday.
Companies including Samsung, Tata Electronics, and Foxconn were amongst those whose projects were approved to receive government subsidies under the electronics component manufacturing scheme and they include the manufacture of enclosures for mobile phones, cameras, sub-assemblies, and other components. And then weather because it could affect several aspects of the economy apart from agriculture production. India could see below average maximum and minimum temperatures in January according to the weather office on Thursday last week which could raise the prospect of higher yields for key winter sown crops such as wheat, rapeseed, and chickpeas according to Reuters.
India could also see an above average number of cold wave days particularly across central and eastern India according to the India Meteorological Department which also means that travel could be affected particularly if we see severe cold wave and fog in some of the north Indian cities including the capital city of Delhi as we've been already seeing in recent weeks.
The Oil Impact
OPEC that's the Organisation of Petroleum Exporting Countries plus delegates said that they're likely to stick with plans to pause supply increases in the first quarter at a meeting on Sunday adding that it's too early to assess the impact of the shock US capture of Venezuela's leader Nicolas Maduro according to Bloomberg. Delegates told Bloomberg that OPEC's intention to stick with the supply pause is unlikely to be affected by events in Venezuela.
Venezuela has the world's largest oil reserves but only pumps about one percent or less than one percent of global demand thanks to deteriorated oil infrastructure. President Donald Trump said US oil companies will spend billions of dollars to rebuild Venezuela's crumbling energy infrastructure after that military operation over the weekend. The oil companies have not yet said anything at least from the reports that I can see or not see.
Meanwhile remember that crude futures fell almost 18 percent in the last year which is their biggest annual drop since the 2020 pandemic for a demand. There is fresh tension in the Middle East. Long simmering tensions between the Middle East neighbours flared last week over their support for opposing factions in the conflict in Yemen according to Bloomberg which said that last week a Saudi-led coalition carried out airstrikes against a rival group supported by the United Arab Emirates.
Car Sales Jump
India's major car manufacturers reported a jump in December sales to dealers on Thursday thanks to continuing impact of those tax cuts from September as it fuelled demand into December according to Reuters. In September as you recall India had cut goods and services tax on small cars to 18 percent from 28 percent and on sports utility vehicles with large engine capacities from 50 percent to about 40 percent.
The move was aimed at kick-starting consumer spending and also a hedge against the steep US tariffs. Now the interesting thing is that Maruti Suzuki's small car portfolio has benefited the most with sales rising 50 percent to 92,000 units the highest since January 2025. Its total sales to domestic dealers were up 37 percent and the company says it has an order backlog of one and a half months for its most affordable models and it will soon take a call on whether it wants to devise price of small cars.
Now if this is exactly the case then this is a sharp reversal for Maruti which was seeing considerable sluggishness in the small car segment in the last year particularly and even a little before that. Tata Motors passenger vehicles saw a 13 percent rise in domestic sales Mahindra and Mahindra said its monthly sales grew 23 percent in December and its sales growth of 18 percent so far in fiscal 26 is amongst the fastest in the Indian car market and has helped the Scorpio maker to cross Hyundai and Tata to the number two spot in the current financial year. The number one of course is Maruti according to Reuters.
An Attack In Latin America
India on Sunday responded to the unfolding crisis in Venezuela calling it a matter of deep concern and urged all parties involved to address issues peacefully through dialogue. The Ministry of External Affairs in a statement said New Delhi was monitoring the evolving situation in Venezuela and reaffirmed its support to the well-being and safety of the people of On Saturday the U.S. military launched Operation Absolute Resolve and captured President Nicolás Maduro and his wife Celia Flores.
The Trump-led U.S. government has accused Maduro of involvement in drug trafficking and rigging Venezuela's 2024 elections. It had earlier imposed sanctions on Venezuela and announced a 50 million dollar bounty for Maduro's arrest. While there is limited India impact of this move the action does throw some light on where the U.S. priorities are for this moment and for that matter in which hemisphere.
So where does that leave trade talks between India and the U.S. and the tariffs? I reached out to Indrani Bakshi, CEO of Ananta Aspen Centre and Foreign Affairs Columnist with the Times of India and began by asking her whether she had seen or was seeing any movement on the India-U.S. front.
INTERVIEW TRANSCRIPT
Indrani Bagchi: I don't think I have anything new to report. The BTA remains on President Trump's table. It is quietly gathering dust and there is literally no movement.
The Prime Minister spoke to President Trump, I think a couple of weeks ago, but that was it and there's no forward movement because where negotiations are concerned, they've all been competed. So the only thing that's waiting is for President Trump to sign on to it, which he hasn't done. Why?
Most guesses are that it's about Russian oil. It's not and India's reduced Russian oil buys, although I noticed that in December, there's been a slight uptick of Russian oil buys. But the fact is, I don't think that's got to do with it.
I think it has got a lot more to do with Trump's interest in mediating a deal between India and Pakistan. That's way beyond the scope of a trade agreement, which is why there's no meeting between the two principles scheduled. So I think we're going to sit with this.
The Indians want that 25%, the extra 25% to go. Trump has got that extra 25%. He thinks it's leverage against India so that he can get India to a table or a room which has the Pakistanis on the other side.
Govindraj Ethiraj: Right. So you're saying that the administration wants to mediate something afresh between India and Pakistan because there is no...
Indrani Bagchi: It's not afresh. It's the same thing. It's the same one that was there six months ago.
Govindraj Ethiraj: And you're saying that seems to be, at least in your understanding, the hurdle at this point? Yeah, that's the hurdle. Right.
And assuming there were to be some kind of movement on that front, I mean, is there any sense that that would be it? Or is there something else also at the back, which we don't know about? Or we may not know about?
Indrani Bagchi: That could well be. Unlikely though, I mean, we've been following this very closely now. The US ambassador to India is scheduled to arrive in Delhi on the 10th of January.
That's next weekend. He is not only ambassador to India, he's also special envoy to the region, to the South and Central Asia. That basically means he will spend only part of his time in India.
The rest of his time, he will be flying around every country from Pakistan to Bangladesh to Uzbekistan to Kyrgyzstan, etc. That's a bit of an unusual situation. But with this presidency, I think the unusual is the norm.
Govindraj Ethiraj: Right. And if I can ask you about the US attack on Venezuela and the capture of its president, does that have any implication? Or how is India looking at this development?
Indrani Bagchi: Two things. One is, this was telegraphed very clearly by President Trump that he would do this. This was part of his national security strategy.
It has been something that has been going on for months and everybody knows about it. That it would be an invasion of this kind, we didn't, nobody knew when, but that it was going to happen. This is part of President Trump's sort of big plan to bring the entire Western Hemisphere under US control, which is something that he specified in his national security strategy.
Basically, Venezuela has the world's largest proven oil reserves. It also has some of the largest deposits of gold and other minerals. As President Trump, I think made it very clear, they would run the country until somebody else takes it over, but they would definitely control the resources.
In a strange way, we are also back in the 19th century of invasions for the sake of resources. But what it does is it deals a huge blow to China and to Russia for a bit, but much more to China. China, one of its bigger oil sources was Venezuela.
Huge market across South America, including access to minerals. So a lot of this will be at an end, because a lot of this means that the US is going to control that hemisphere and sort of push the Chinese out. That's definitely going to happen.
Govindraj Ethiraj: Right. Last question. So, you know, the government of India has reacted or responded on the developments in Venezuela by saying that this is a matter of deep concern.
We are monitoring the situation. It's affirmed its support to the well-being and safety of the people of Venezuela and called upon all to address peacefully through dialogue and ensuring peace and stability. So is this a position which is obviously a seemingly diplomatic one, the same that India would have adopted otherwise?
Indrani Bagchi: It's completely a neutral position. We have not taken a position on the politics of what is going on. And if you look around, Govind, I mean, really, there's no opposition.
A, not in Venezuela, because clearly what happened was a deal struck by the US and elements of Maduro's inner circle, particularly his vice president and some elements of the army. Everybody in Europe, they have endorsed the invasion. So the question that we should be asking is the Ukraine invasion was fine then by this logic.
I mean, Russia could say that Ukraine was a corrupt regime and that was it. So I think the question that will be asked will be on Ukraine, how much of Trump's hegemony across territories, which is territories he wants, he wants Canada largely because of the province of Alberta. He wants Greenland.
He wants the rest of Europe to be run by right wing movements and governments. The same for South America, at least from the first one, it seems like he's going to go through without too much of a check.
Govindraj Ethiraj: Right. And the implications of that is something that we will discuss in coming days and weeks. And Rani, thank you so much for joining me.
Indrani Bagchi: Not at all. Thank you very much for having me, Govind.
The Energy Shifts
Much of the global refinery and petrochemical capacity is coming up between Africa, Middle East and Asia which of course includes China and India.
State-owned Engineers India Limited and engineering consulting major is driving some of these projects but the diversity in these projects from Africa to India also offers an insight into how energy and energy linked demand is shifting and to where. In a CoreReport special edition in partnership with the India Energy Week I caught up with Engineers India Limited Chairman and Managing Director Vartika Shukla and I began by asking her about EIL's international forays particularly in the last year and some of the newer projects that they were working on in India and in what categories.
INTERVIEW TRANSCRIPT
Vartika Shukla: So on the international front, very recently we signed a contract to build four very large fertiliser trains in Nigeria for the Dangote group.
These are larger than any of the Indian Urea trains. They are four to five zero TPD of urea. And that puts us into the global map of engineering consultants who have the ability and who have garnered the trust of a very prestigious, large group internationally to implement these projects on a PCM basis.
Similarly, the Dangote group is also looking at adding another 33 million tonnes, 650,000 barrels per day of refinery in the same region, in the same location as we have built the first one, which will bring up the capacity of that single location to 1.2 million barrels per day, which is a very, very large capacity at one place. Again, it is a testimony of the ability of our engineering and project management teams. Would that be larger than any single installation in India?
Yes. Yes. It would be put together at least two such installations of our nation at Patlu and also the six fertiliser trains eventually.
So that will be a conglomeration of refinery, petrochemicals, as well as fertiliser, one of its kind in the entire world. So that's one historic landmark which we have achieved in the last year. Besides, as you mentioned on the diversification part on the other than oil and gas, the world and our clients have found merit and found value in the abilities that our teams have and the experience that they have, you know, over the last 60 years or so, and the strong database and, you know, the wherewithal to solve any of the problems.
So those kind of USPs that we bring on the table for our clients have helped us steer and navigate in, let's say, the fertiliser sector for one, which we weren't a major player earlier and in the infrastructure sector, because there is any client who puts in investments, who puts in, you know, have large capital projects, looks at the ability of the consultant to give a quality delivery, delivery as much as can be possible in the schedule. But more importantly, having cost control, good processes and procedures for procurement. And all these are they are inherent in our teams.
And that's one reason why we have gone beyond the oil and gas. And today, as we speak for this financial year, we have almost 50 percent of our order inflow from international operations. And our order book, which is about 13,700 crores, is an all time high for our organisation.
And we are also hopeful for growing it further.
Govindraj Ethiraj: And tell us about the most technologically complex or fascinating or interesting projects that you're working on right now compared to your past, whether it's an oil and gas or outside.
Vartika Shukla: I think the project which is unique to the industry and the world as well is the Bamboo Refinery, which was dedicated by the Honourable Prime Minister in September in Umar Egar. And that is a second generation ethanol project with some byproducts, which is unique in comparison to other 2G ethanol projects, which just makes second generation ethanol. And we put together that plant with the most exotic material, metallurgy, with new vendors, both national and international, with the equipments which no one has ever operated before.
And our team has supported that plant in troubleshooting, in pre-commissioning. There were huge challenges because people have not faced environments of the nature of slurry, of acidity in the process streams and how to manage the corrosion aspects, the plugging aspects and so many other aspects. These all fluids are not proper fluids, they're non-Newtonian fluids.
So you cannot apply the same principles of chemical engineering, transport phenomena as you do in the plants that we have conventionally done. So that's been a great learning. And the success of the commissioning and operation of that plant is actually is a testimony of the fact that it was extremely exciting, challenging, yet very satisfying at the end when it all came together.
Govindraj Ethiraj: And there's a sort of general knowledge question, perhaps. How do you start with bamboo or because bamboo is already available there and you say, OK, now let's see if we can find another use for it, because obviously one would think of sugar when one thinks of ethanol or maize.
Vartika Shukla: So see, these technologies are some of them are feed agnostic. So whether you look at rice straw or you look at wheat straw or you look at cotton, it's likely tough to, you know, go to second generation ethanol, it's a tough feedstock per se. Or you look at stubble or, you know, any kind of those feedstocks.
People also look at growing some kind of grasses on purpose to get second generation ethanol. So these are all feedstocks which are, you know, available for technology, technologies which are feed agnostic. This particular technology is designed for bamboo because it has a separate processing steps.
Bamboo being, you know, the nature of bamboo being slightly different than, you know, the straw. So the lignin content, the cellulosic content is quite unique in that. And this process deploys a solvent, which is again in variance to the typical enzymatic hydrolysis processes which are there in technology.
And therefore, it finds value in making byproducts like acetic acid and furfural. So that way, this, in fact, was brought up from a technology readiness level, which was very low. So it's one thing to repeat a technology which has been commercialised.
That's the easy part. It could be complex. It could be extremely like a steam cracker or a dual feed cracker, which is very complex.
But you've done it before. World has done it before. And there are set equipment, set suppliers, set systems.
Not much, except you need to kind of put it together. But in this particular case, there was nothing on ground. It's absolutely a blank slate.
And you cannot fail because it is a sizable investment. So I think that itself is, you know, proving the fact that on the client end, there was huge support from maybe RPL, NRL, as well as EIL teams. They work together to put this marvel together, which is totally unique in terms of the context where we are talking today.
Moving from the conventional energy space, the fossil space, slowly by and by transitioning to the green fuels.
Laughing At Competitors
Chinese auto giant BYD on Friday has dethroned U.S. rival Tesla as the world's biggest seller of electric vehicles on a calendar year basis.
This milestone caps an extraordinary rise for BYD. Company Tesla CEO Elon Musk once dismissed by laughing at their products during a 2011 Bloomberg interview according to a CNBC report. In a statement published Thursday BYD said sales of its battery-powered cars rose nearly 28 percent to 2.2 million units.
Musk had apparently openly laughed at the mention of BYD while being interviewed on Bloomberg TV in October 11. He said he did not see the company as a competitor to Tesla adding I don't think they have a great product. Tesla said on Friday it delivered about 1.6 million vehicles in 2025 in line with the company compiled estimate of 1.6 million vehicle deliveries and this is a roughly 8 percent drop from 2024 and the company's second straight annual drop according to CNBC.
