On May 20, 2026, the rupee printed an all-time low of Rs 96.97 to the dollar. For Indian investors, there is a direct implication for how a portfolio should be built.

Where We Are

The rupee has depreciated against the dollar at a compound annual rate of approximately 5% since the 1991 liberalisation. The journey reads like a one-way ladder: Rs 3.30 at independence in 1947, Rs 17 before liberalisation, Rs 46 by 2000, Rs 75 in 2020, Rs 97 today. While the RBI has managed the pace of depreciation effectively, there has not been a sustained reversal along that path.

The current stress has a specific character worth noting. The rupee has weakened 12% over the last 12 months. The DXY dollar index, by contrast, fell 9.4% through all of 2025. That is rupee-specific stress, and it points directly to the forces underneath.

Three Catalysts, None Short-Lived

The first is oil. India imports 88% of its crude requirement, and Brent crude ranged between $97 and $110 per barrel in May 2026, spiking above $110 precisely when the rupee hit its record low. Every dollar increase in the oil price widens the import bill, adds to current account pressure, and increases structural demand for dollars. The RBI cannot drill its way out of this.
The second is capital flows. Foreign portfolio investors have pulled Rs 2.2 lakh crore from Indian equities in 2026 alone, the worst outflow year since FPI investing in Indian equities was first permitted in 1992. When foreign capital exits, it exits in dollars. Dollar supply in the market falls, demand rises, and the rupee weakens. The mechanism is direct and the numbers are not small.The third is the inflation differential. India’s CPI has run structurally above US CPI over any five-year or longer horizon, and purchasing power parity adjustments work quietly but persistently in the background. The approximately 5% annual depreciation since 1991 is not coincidental to this differential. It is mechanical.

None of these catalysts resolve quickly. Oil dependence is a decade-long infrastructure challenge. FPI flows depend on global risk appetite and relative valuations that will remain volatile. The inflation differential compresses only when India’s supply-side productivity gains structurally outpace the US over a sustained period. The RBI Governor has stated the bank will do “whatever is required” for orderly markets and that the rupee appears undervalued.

But rate hikes to defend the currency are not on the agenda. The tools available to the central bank are narrower than the structural forces pressing against it.

What This Means for Portfolio Construction

A dollar-denominated asset earns on two levels for an Indian investor: the USD return of the underlying, and rupee depreciation layered on top. At the 10-year average depreciation rate of 3.4%, a flat-returning US asset still delivers a 1.4x return in INR over a decade, purely from currency. At the long-run 5% rate, currency alone roughly doubles the INR value of any dollar asset over 20 years. The dollar has strengthened against the rupee on a net basis for 34 years. The currency tailwind is built into the asset class.

Sure, the Nifty 50 TRI delivered 14.6% CAGR in INR terms for the decade ending 2023, a strong number on any measure. The S&P 500 in INR delivered approximately 15-16% annualised over the same 10-year window, per reconstructed data combining S&P 500 USD returns with RBI exchange rate data. Comparable headline returns, but with uncorrelated drivers. When oil spikes and FPI outflows hit simultaneously, a domestic-only portfolio absorbs the equity market impact and the currency erosion at the same time. A portfolio with dollar exposure absorbs the equity impact but earns on the currency move. Those are meaningfully different risk profiles wearing similar return numbers.

A 20 to 30% allocation to US equities through the LRS route, built over time via low-cost index ETFs and direct stocks accessible through platforms like Appreciate, is a structural response to a structural reality: the rupee has weakened at approximately 5% annually for 34 years, three catalysts sustain that pressure today, and a portfolio concentrated entirely in one currency carries a risk the data has been pricing in for decades.

(The author, Subho Moulik is Founder & CEO at Appreciate)

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times.)

The combined market valuation of seven of the top 10 valued firms eroded by Rs 1.54 lakh crore last week, with Reliance Industries taking the biggest hit.

In a holiday-shortened last week, the BSE benchmark Sensex dropped 639.61 points, or 0.84 per cent, and the NSE Nifty declined 171.55 points, or 0.72 per cent.

From the top 10 pack, Reliance Industries, HDFC Bank, Bharti Airtel, ICICI Bank, Tata Consultancy Services (TCS), Bajaj Finance and Hindustan Unilever faced erosion in their valuations, while State Bank of India, Larsen & Toubro and Life Insurance Corporation of India (LIC) were the gainers.

The market valuation of Reliance Industries dropped by Rs 46,078.3 crore to Rs 17,87,039.40 crore.

HDFC Bank’s valuation eroded by Rs 33,333.06 crore to Rs 11,46,641.84 crore.

The valuation of Bharti Airtel tumbled Rs 25,408.96 crore to Rs 11,14,886.53 crore and that of TCS dived Rs 22,920.58 crore to Rs 8,15,480.75 crore.
The market capitalisation (mcap) of Hindustan Unilever diminished by Rs 13,169.46 crore to Rs 5,04,210.54 crore.Bajaj Finance’s valuation declined by Rs 7,253.24 crore to Rs 5,63,262.33 crore and that of ICICI Bank dipped by Rs 6,311.41 crore to Rs 9,00,589.91 crore.

However, the mcap of Larsen & Toubro jumped Rs 20,608.43 crore to Rs 5,60,836.64 crore.

State Bank of India’s mcap climbed Rs 13,753.62 crore to Rs 8,89,831.54 crore and that of LIC went up by Rs 6,040.37 crore to Rs 5,20,484.06 crore.

Reliance Industries remained the most valued domestic firm followed by HDFC Bank, Bharti Airtel, ICICI Bank, State Bank of India, TCS, Bajaj Finance, Larsen & Toubro, LIC and Hindustan Unilever.

Patanjali Foods reported a 46% year-on-year rise in net profit for the March quarter, aided by strong growth across its edible oils and FMCG businesses. However, higher raw material and packaging costs weighed on profitability. The company’s profit after tax rose to Rs 524 crore in the quarter ended March 2026 from about Rs 359 crore a year earlier.

Revenue from operations increased 17% year-on-year (YoY) and 6% sequentially to Rs 11,217 crore during the quarter. Despite the strong top-line performance, margins remained under pressure due to rising input costs.

Gross profit stood at Rs 1,398 crore, translating into a margin of 12.47%. The company said profitability was impacted by a sharp rise in packaging material costs during the latter half of March, particularly for PET bottles and polyester films, driven by crude oil volatility and higher freight expenses.Cost of goods sold increased by 294 basis points as a percentage of revenue on a YoY basis. EBITDA, excluding exceptional items, came in at Rs 502 crore with an EBITDA margin of 4.48%.

The edible oils business remained the largest contributor to revenue. The segment reported revenue of Rs 8,324 crore during the quarter, up 23% YoY and 13.5% sequentially. Segment EBITDA stood at Rs 215 crore, with margins of 2.58%.
Branded edible oils accounted for nearly 75% of total edible oil sales and continued to drive growth.
The company said palm oil prices strengthened sharply during the quarter, with refined palm oil prices rising nearly 20% between January and March 2026. The increase was driven by higher import costs from Malaysia and Indonesia, elevated freight charges, rising insurance costs and expectations of tighter global supplies.
Soya oil prices also moved higher, rising 23% during the quarter.

The FMCG segment continued its strong performance and generated revenue of Rs 2,890 crore, up 14% YoY. Segment EBITDA rose 14% to Rs 292 crore, while margins stood at 10.1%.

The FMCG business contributed nearly 26% of quarterly revenue and almost 58% of segment EBITDA during the quarter, underscoring its growing importance in the company’s earnings mix.

Within FMCG, biscuits remained a key growth driver. Quarterly biscuit revenue rose nearly 14% to Rs 478 crore. For FY26, biscuit revenue crossed Rs 1,907 crore, growing 16%.

The company said its Doodh biscuit brand has now become a Rs 1,300-crore-plus annual sales brand, while Nariyal biscuits continued gaining market share.

The Staples portfolio generated quarterly revenue of Rs 849 crore, while the home and personal care business posted strong growth of 35% to Rs 840 crore. The skincare category emerged as one of the fastest-growing segments, with revenue rising 58% YoY.

The ghee business reported quarterly revenue of Rs 339 crore, while textured soya products contributed Rs 106 crore.

Beverages and juices also witnessed improved demand toward the end of the quarter as summer consumption recovered after an initially delayed season.

The company’s nutraceutical business generated revenue of Rs 18 crore following internal restructuring initiatives. Exports contributed Rs 32 crore during the quarter, while annual export revenue stood at Rs 187.8 crore. Patanjali Foods exported products to 37 countries during FY26.

For the full year, Patanjali Foods reported its highest-ever annual revenue from operations at Rs 40,170 crore, representing growth of 19% over FY25.

The edible oils business generated annual revenue of Rs 29,313 crore, while the FMCG segment reported annual revenue of Rs 11,188 crore, up nearly 20%. The company also continued expanding its oil palm plantation business under the government’s edible oil self-sufficiency push.

As of March 2026, the total oil palm cultivated area under the company’s network stood at 1.11 lakh hectares across 12 states, reflecting growth of 24% YoY.

Patanjali Foods spent around 2% of quarterly revenue on advertising and brand-building activities during the quarter.

(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times.)

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