Week of 15-19 Dec’25
A note for readers
This weekly note is for anyone who missed our daily updates. It captures every material development from the week, explains why it matters, and closes with Eiko’s synthesis. Nothing important is left out.
The week, in one view
This week clarified the real story of India’s build phase. Demand themes are broadening, but the binding constraints are shifting to execution capacity, localisation of critical components, and system readiness.
Enterprise AI continued to move forward, but unevenly. Adoption is rising, yet most use cases remain in pilots and early rollouts, which means the revenue step up is still back ended. Meanwhile, the enabling layers under the economy, power equipment, storage, transmission, geospatial, rail safety, drones, defence manufacturing, and semiconductor packaging, are quietly getting policy support and corporate capital.
1. Capex, infrastructure and long cycle investment
Real estate and manufacturing capex stayed active, but execution stress is rising. Developers are expanding launch pipelines, yet approvals, labour availability, and contractor capacity are emerging as constraints. That matters because delivery risk can become the hidden driver of divergence within the same demand cycle.
Mumbai real estate saw a fresh policy push to unlock the long stalled pagdi building opportunity, with the stated aim of generating investor interest at scale. This is one of the most actionable city level structural themes, because it can convert locked, low rent assets into redevelopment and supply creation, if incentives and stakeholder alignment hold.
On the office side, GCC driven leasing momentum remains strong, with gross absorption projected to stay elevated, reinforcing the view that GCC expansion is a structural demand driver, not a one off cycle.
Actionable for readers
If you track real estate, watch for concrete policy mechanics on pagdi redevelopment, especially consent thresholds, redevelopment terms, and funding structures.
If you track contractors and building materials, execution capacity and labour availability become the key near term filter.
2. Technology, AI and digital infrastructure
The AI cycle is progressing, but the market is getting more honest about timelines. Multiple reads this week converged on the same signal, Indian IT is investing heavily in AI, but most client deployments are still pilots or early rollouts. For now, AI is helping margin defence and renewals more than it is driving step change revenue. The clearer monetisation window is closer to 2027 as enterprises move from pilots to production.
This also explains where value sits. The highest value is in integration, operationalisation, data engineering, security, compliance, and domain workflows, not in training the largest models. That framing also appeared in commentary that the bubble risk is in oversized LLM funding, not in enterprise adoption, which continues regardless.
Digital infrastructure build out stayed in focus. Government reiterated a secure, scalable cloud backbone via MeghRaj, and the broader policy push is that India’s data centre capacity is expected to multiply into 2030. On the private side, the narrative is shifting from storage to AI workloads, which is why downstream infrastructure like gensets is being positioned as a demand beneficiary of the data centre boom.
A significant ecosystem signal also came through Apple’s early talks with CG Semi for chip assembly and packaging in India, and the parallel collaboration discussions involving Tata Electronics and global chip players. This is a practical marker of OSAT moving from ambition to specific conversations.
Actionable for readers
If you track IT services, look for client commentary shifting from pilots to production, and spend moving from experimentation to integration and data readiness.
If you track India semiconductors, OSAT and advanced packaging are the near term wedge, watch for confirmed scope, timelines, and anchor customers.
3. Manufacturing, localisation, power systems and storage
One of the most important policy signals this week was the Power Ministry identifying critical imported power sector components for immediate localisation, and building a broader list pending industry inputs. This points to a shift from generic import substitution to targeted localisation of bottleneck equipment.
Rare earth magnets also moved into policy focus for EV supply chains, with Cabinet approval for a scheme to promote manufacturing of sintered rare earth permanent magnets at meaningful scale. These two together, localisation of power equipment and magnets, speak to a deeper attempt to secure the enabling stack under electrification and grid upgrades.
Battery storage economics improved sharply on government disclosures. The discovered BESS cost has fallen steeply, with the implied storage cost dropping meaningfully as utilisation assumptions rise. Combined with ongoing VGF schemes and transmission charge waivers, this makes storage a more viable grid solution.
At the same time, a critical bottleneck remains, transmission build out timelines still lag renewable project execution timelines by years. This mismatch is becoming one of the most important constraints to watch in the energy transition.
Actionable for readers
If you track power and grid supply chains, the localisation list is a direct map of future procurement intent, and where domestic capability gaps can become opportunity.
If you track renewables, the key monitor is transmission awards, commissioning pace, and whether storage is being deployed to bridge grid constraints.
4. Mobility, autos and consumer manufacturing
Automakers are leaning toward mid cycle refreshes and upgrades rather than full new platforms, enabled by digitisation and robotisation of assembly lines. A major driver is upcoming fuel efficiency standards in 2027, pushing OEMs to prioritise efficiency and emissions compliance upgrades.
Consumer and auto manufacturing capex is also picking up, with multiple firms planning investments into capacity expansion, and the narrative is that demand visibility is improving after policy changes, with companies willing to invest ahead of the curve.
A separate consumer signal is the continued consolidation and acquisition race in packaged foods, personal care, and regional brands, with large platforms and incumbents seeking to own distribution and category expansion.
Actionable for readers
If you track auto ancillaries, upgrades and refresh cycles can pull forward demand for select components and electronics.
If you track FMCG, consolidation and capacity expansion are the two signals to watch, especially who is building manufacturing scale versus only buying brands.
5. Defence, drones and strategic capability
A clear defence theme this week was the scale up of indigenous drones, including orders placed after trials designed to replicate battlefield conditions. The supplier set spans surveillance, strike capability, and resilience against spoofing and jamming. This is a meaningful move from experimentation to procurement.
Defence capability also extended to asset protection and the stated national mission framing around development of indigenous jet engines. That matters because indigenous propulsion is a capability gap that drives long cycle investment and ecosystem building.
Actionable for readers
If you track defence manufacturing, focus on repeat order potential, qualification pathways, and whether procurement expands from niche platforms to broader fleet deployment.
If you track aerospace, indigenous engine programs are long duration, watch for milestones, test readiness, and funding continuity.
6. Logistics, services, rail safety and physical networks
Two very different logistics signals showed up this week.
One is physical logistics, where passenger to freighter conversions got regulatory clearance, creating a lower cost pathway to expand air cargo capacity, which is directly relevant to express logistics and ecommerce.
The second is services logistics, where 10 minute househelp demand is rising sharply, but the economics remain uncertain, with manpower supply constraints emerging as a core bottleneck. This is a classic pattern, demand can scale faster than unit economics.
Rail safety is becoming a large, multi year market. Kavach expansion implies a sizable order pipeline over the next 6 to 7 years, with costs per kilometre and per locomotive indicating meaningful spend intensity. The ecosystem is also broadening beyond a couple of players, which is important for deployment pace.
Actionable for readers
If you track logistics, air cargo capacity additions via conversions can be a real enabler for express networks.
If you track rail, the actionable monitor is implementation pace, vendor approvals, and whether deployment bottlenecks shift to installation capacity.
7. Healthcare, pharma compliance and sector structure
Two healthcare signals are important for different reasons.
Anti obesity drugs continue to show strong price sensitivity, price cuts translate quickly into volume response, reinforcing that affordability is the lever for adoption in India.
On the supply side, GMP compliance timelines are creating stress for pharma SMEs, with the risk of shutdowns and drug shortages if timelines are not managed pragmatically. This is a structural industry shaping event, because it can accelerate consolidation and reconfigure supply chains.
Actionable for readers
If you track healthcare consumption, watch pricing moves and distribution expansion, that is what unlocks adoption.
If you track pharma manufacturing, watch timeline extensions, enforcement stance, and early signs of consolidation or supply disruption.
8. Geospatial intelligence, mapping and data layers
Geospatial tech moved further into the centre of national infrastructure priorities. Policy messaging positioned geospatial data as a foundational pillar for smart cities, road and rail build out, precision agriculture, logistics optimisation, disaster management, and next generation defence preparedness.
On the corporate side, Genesys expanded the commercialisation path for geospatial data in two ways. First, airport focused subsurface mapping and digital twin creation via advanced surveys. Second, high definition ADAS maps across national highways leveraging Survey of India’s CORS network, creating a licensable dataset with applications across fleets, mobility platforms, safety analytics, and automotive research.
Actionable for readers
If you track mobility and infrastructure, geospatial is moving from project work to platform data licensing, watch for who becomes a data layer provider.
If you track government and infra execution, interoperability, standards, and procurement frameworks become the adoption accelerants.
9. Space economy, semiconductors and strategic manufacturing
Space and advanced manufacturing had multiple concrete markers this week.
ISRO progressed toward Gaganyaan, with milestones and test readiness signalling the countdown to the 2027 crewed mission. State level policy also reinforced ecosystem ambition, with Karnataka targeting funding and positioning as a major space hub.
In civil nuclear, the policy direction stayed supportive of capacity expansion. The nuclear energy mission framing continues, and private participation pathways remain in focus. On the industrial side, MTAR Technologies received significant orders tied to reactors, which is a direct indicator of supply chain activity in civil nuclear.
Semiconductors also had a major corporate development. Cyient Semiconductors acquired a majority stake in Kinetic Technologies, aiming to build a scaled platform in power semiconductors for edge AI and high performance compute markets. This connects directly with the power efficiency theme under AI infrastructure.
Finally, macro policy remained a backdrop, with the Finance Minister reiterating focus on managing debt levels and fiscal consolidation, and separately trade linkages improved via the India Oman CEPA, opening market access for a large share of exports.
Actionable for readers
If you track nuclear and clean energy supply chains, watch order flows, project timelines, and private participation mechanics.
If you track semiconductors, power ICs and packaging are the nearer term monetisation wedge for India’s ecosystem.
Eiko’s POV
This week reinforced a consistent message. India’s build out is not constrained by intent, it is constrained by execution and enabling layers.
Across enterprise AI, data centres, electrification, defence, rail safety, and infrastructure, the opportunity is real, but it will accrue to those who solve bottlenecks, localisation, integration, testing, standards, and deployment capacity. The economy is moving from “announce” to “deliver”, and that is where differentiation begins.
For investors, opportunity remains concentrated in three lanes:
• Long cycle capex and localisation under grids, storage, rail safety, defence, and manufacturing
• Enterprise AI enablers, where revenue is back ended but integration and data readiness spend is building
• Select consumption and healthcare themes where affordability, distribution, and consolidation shape outcomes
India remains in a multi year build phase. Outcomes will be driven by execution quality, balance sheet strength, and patience, not broad exposure.
About Eiko
Eiko is a SEBI registered investment advisory focused on long term wealth creation through disciplined research and portfolio construction.
If our way of thinking resonates, you can learn more about our advisory approach here:
https://www.eikoquantum.com/investment-philosophy