As of January 20, 2026, a surprising trend has emerged in the Indian equity markets: nearly one in five Nifty 50 stocks (20%) has delivered flat to negative returns on a three-year Compound Annual Growth Rate (CAGR) basis.
Despite the broader Nifty 50 index gaining approximately 43% in absolute terms over the last three years (rising from ~17,600 in Jan 2023 to ~25,200 today), several blue-chip heavyweights have significantly underperformed.
The “Laggard” List: 3-Year Underperformers
The data highlights a “valuation trap” where some of India’s most trusted companies have trailed even the interest rates of simple bank fixed deposits.
| Company | 3-Year CAGR (Approx.) | Sector |
| Adani Enterprises | -14.0% | Diversified |
| Tata Motors (PV) | -5.0% | Automobile |
| Hindustan Unilever | -3.0% | FMCG |
| TCS | -2.1% | IT Services |
| Asian Paints | -1.3% | Paints |
| Infosys | +3.0% | IT Services |
| HDFC Bank | +4.0% | Banking |
| Reliance Industries | +4.6% | Energy/Retail |
Why the Heavyweights are Stalling
Market analysts point to three primary reasons for this “divergent” performance in 2026:
- Earnings Fatigue in Mature Businesses: Large-cap giants like Hindustan Unilever and TCS are struggling with a “high base effect.” As these companies become massive, growing at double-digit rates becomes mathematically and operationally harder.
- Sectoral Shifts: The “Traditional IT” model is facing a pivot toward Generative AI, causing a transition phase that has kept stocks like Infosys and TCS subdued compared to mid-cap AI specialists.
- The Rise of “Narrative” Mid-caps: Capital has shifted away from established Nifty 50 laggards into high-growth sectors like Defense, Renewable Energy, and PSUs, which have seen 3-year returns exceeding 100% in some cases.
Impact on Mutual Funds
Interestingly, Indian mutual funds have continued to increase their exposure to these laggards despite the poor price action. As of December 2025, mutual fund holdings in HDFC Bank and Reliance Industries stood at record levels (₹3.37 lakh crore and ₹1.99 lakh crore, respectively).4 Fund managers argue that these “time-wise corrections” are making the stocks fundamentally cheap for a long-term recovery.
Conclusion: A Selective Market
For investors, the current data proves that “buying the index” through an ETF would have been more profitable than picking individual large-cap names. While the Nifty 50 index delivered a 3-year CAGR of roughly 12–14%, many of its biggest constituents failed to cross the 5% mark.
