Gulf War: Stocks That Tanked The Most

West Asia conflict triggers sharp sell-off in Indian markets, with realty, banking and auto stocks leading losses amid energy shock fears.

The Indian economy and financial markets are one of the worst affected by the economic choas unleashed by the ongoing US-Israel war on Iran and the latter's counteroffensive.

This is not surprising, given that nearly half of India's crude oil, two-thirds of liquefied natural gas (LNG), and 90 per cent of liquefied petroleum gas (LPG) come from Persian Gulf countries and pass through the Strait of Hormuz.

The region as a whole is also India's biggest export market and absorbs nearly a third of the country's merchandise exports.

Further, the region is the biggest source of inward remittances, with nearly 10 million migrant workers from India working there prior to the conflict.

The war has triggered a selloff in the Indian equity market as investors reprice assets, given the potential loss in business for Indian companies, production losses due to disruption in energy prices, and loss in profits and income from higher energy prices.

The benchmark Nifty 50 is down 7.4 per cent since the start of the war, while many sectoral indices have seen bigger cuts.

The realty index has been hit the most, with Nifty Realty down 11.3 per cent, as investors worry about the demand for new homes in an environment of rising energy prices and growing economic uncertainty.

The Nifty Bank is also down 11.3 per cent since the start of the war, as the market fears a tightening of financial conditions and an incremental rise in bad loans due to a disruption in energy supplies.

Among the lenders, public sector banks (PSBs) have been hit the most given their higher exposure to corporate and business loans.

In manufacturing, automakers have been hit the hardest with Nifty Auto down 11 per cent as higher fuel prices are likely to dampen demand for new vehicles.

The Oil & Gas sector index is down 10.7 per cent led by public sector oil marketing companies (OMCs).

In contrast, investors expect only a minor downside for companies in IT Services, pharma, and health-care sectors from the conflict in West Asia.

Here are 10 stocks from the Nifty 200 index that have been among the biggest losers on the bourses since late February, when the war started:

Ashok Leyland

• The country's second largest commercial vehicle (CV) major has a meaningful international presence -- particularly in West Asia (Saudi Arabia, UAE, and Qatar)
• Its plant operating at Ras Al Khaimah may face supply chain disruption if geopolitical instability continues for a longer time in the region, suggest analysts
• Ashok Leyland's dual exposure -- high export concentration in West Asia and domestic demand sensitivity to diesel prices -- makes it a vulnerable major listed auto stock, points out Antique Stock Broking
• There is also risk to the Indian government's capex if subsidy expenditure rises and excise income declines and this will hurt CV demand, points out BNP Paribas Research
• Despite cyclical headwinds, the stock is currently trading above its last 10-year average one year forward price-to-earnings ratio

Polycab India

• March typically contributes 45-50 per cent of the cable and wire market leader's fourth-quarter sales. Given the disruption in March so far, near-term volume growth could be impacted despite healthy underlying demand
• West Asia, which contributed 20-22 per cent to Polycab's export mix in 9MFY26, has seen a disruption in March due to the ongoing conflict
• JM Financial Research expects Q4 volumes to remain flat year-on-year (Y-o-Y) with revenue growth relying on input cost appreciation (18-20 per cent)
• Aluminium and PVC prices have risen sharply in the last 3-4 weeks amid supply disruptions, which may create near-term margin pressure, points out ICICI Securities
• While there are short-term headwinds, brokerages are positive on the market leader, given a favourable industry outlook, a strong balance sheet and healthy return ratios

Dabur India

• West Asia is the largest region by revenue outside of India and MENA (Middle East North Africa) and accounts for 8 per cent of fast-moving consumer goods (FMCG) major Dabur's consolidated revenue. Major categories include hair care, oral care, skin care, healthcare, and foods
• In the export market, the inability to supply, cancellation of orders and higher freight/insurance will start reflecting in Q4FY26 itself, suggest analysts
• On the raw material front, companies are already witnessing higher costs, though they have covers/inventory, which could shield them in Q4FY26. The impact, according to BNP Paribas Research, could be visible starting Q1FY27
• Though domestic macro indicators are supporting a gradual consumption recovery, persistent execution challenges keeps Motilal Oswal Research cautious. Factoring in near-term headwinds in Dabur's international markets, the brokerage has cut its earnings estimates by 2-3 per cent

Samvardhana Motherson

• Though top tier auto components maker Samvardhana Motherson posted double digit revenue growth year-on-year (Y-o-Y) and strong operating profit margin expansion across verticals in the December quarter, brokerages have highlighted concerns over profitability
• Analysts say, margins could be at risk from higher crude oil and energy prices, increase in freight rates, and supply chain disruption
• Due to its large manufacturing footprint in Europe, regional energy price increases stemming from West Asia supply disruptions could weigh on demand of its products
• Slowing global passenger vehicles (PV) growth as well as shrinking profit pool of global original equipment manufacturers (OEMs) in China, and market share pressures of legacy OEMs in the European Union (EU) are cause for concern for the company, says Elara Securities
• The stock is trading at 24-27 times the consolidated FY27 earnings estimates adjusted for non-auto businesses which is considered expensive

Godrej Consumer Products

• West Asia region is part of the company's Godrej US, Africa and Middle East (GUAM) basket and accounted for 22 per cent of fast-moving consumer goods (FMCG) major Godrej Consumer's consolidated revenue in Q3FY26. West Asia exposure is estimated in single digits
• The GUAM segment grew the fastest in Q3 at 19 per cent Y-o-Y and reported a sharp improvement in operating profit margins
• The ongoing conflict could put pressure on near-term margins as crude oil derivatives are a key raw material for most consumer majors and account for 15-30 per cent of cost of goods sold
• West Asia exposure creates a potential risk to export demand, logistics disruptions and currency volatility if geopolitical tensions in the region escalate further or continue for long, says BNP Paribas Research

Oil marketing companies

• Public-sector oil marketing companies (OMCs) - Indian Oil Corporation (IOC), Bharat Petroleum Ltd (BPCL) and Hindustan Petroleum Corporation Ltd (HPCL) - have most to lose from West Asia war and the resulting disruption in crude oil supply
• OMCs are expected to absorb the financial impact of the sharp rise in crude price after the attack by US and Israel on Iran in the absence of pricing freedom at the retail level, say analysts
• This is likely to lead to a decline in OMCs' operating profit margins in Q1FY27 and beyond if crude prices remain elevated
• According to analysts at Kotak Institutional Equity (KIE), OMCs' costs will rise due to elevated crude premiums, higher freight expenses, a weak rupee and emergency LPG imports at higher prices
• According to analysts, the compensation from the government takes time and is usually partial
• OMCs have benefitted greatly from lower crude oil prices prior to the break-out of the West Asia war and all these gains will vanish
• In Q3FY26, the three OMCs' combined net profit was up 186 per cent Y-o-Y with just 5.2 per cent Y-o-Y growth in net sales
• There has been a sharp decline in OMCs' share price with BPCL down by 26.2 per cent month-to-date while IOC and HPCL is down 25 per cent and 21.6 per cent, respectively
• KIE has cut its FY27 earnings per share (EPS) estimate for IOC by 30.8 per cent and target price to Rs 100 from Rs 125 earlier. They see 50 per cent and 28 per cent downside in BPCL's and HPCL's earnings, respectively, for FY27 due to the conflict

Ambuja Cements

• Adani group owned Ambuja Cements has also seen a sharp decline (15.6 per cent) in its share price post the break-out of the West Asia war on fears that a rise in energy price will increase its operating and freight costs
• Power & fuel and freight account for nearly half of Ambuja Cements operating cost and the recent rise in crude oil prices are expected to push these costs higher
• India's second largest cement producer is also a major consumer of pet coke, a fuel used in cement production. Higher crude oil price will result in higher price of pet coke
• Cement makers like Ambuja Cements also face the risk of a decline in cement demand as households and families postpone construction projects due to growing economic uncertainty and a general rise in prices
• This is likely to result in a decline in Ambuja Cements' operating margins and net profit in Q4FY26 from already low level in Q3FY26, and also for the industry, estimate analysts

GAIL (India)

• The public-sector natural gas transmission utility, GAIL (India) also faces headwinds from a prolonged conflict in the West Asia
• This reflects in its share price which is down 18 per cent since the start of the war as investors fear a decline in its margins and profit from higher natural gas and LPG prices
• A decline in gas availability due to the conflict is also likely to hit revenues and profits of its gas transmission and marketing divisions
• According to Elara Capital, 16 per cent of GAIL's marketing volumes are dependent on Hormuz-linked LNG and 30 per cent of its transmission volume is exposed to Hormuz flows
• According to Fitch Ratings, GAIL (India) could face cash flow pressure from prolonged oil and gas supply disruption tied to the Iran conflict
• According to Fitch Ratings, if West Asia LNG is unavailable for a full quarter, GAIL's earnings before interest, taxes, depreciation, and amortisation (Ebitda) net leverage is likely to reach 2.5x in FY27, against earlier estimate of 1.8x

Larsen & Toubro

• Larsen & Toubro's (L&T's) EPC, construction and energy divisions have a high exposure to markets in the Persian Gulf region and a prolonged war may have an adverse impact on its order inflows and revenues & profits
• In the first nine-months of FY26, these divisions accounted for 65 per cent of L&T's consolidated revenue; rest came from IT, financial services, manufacturing, and others
• West Asia accounted for 37 per cent of L&T's order book at the end of December 2025 worth Rs 2.71 trillion and contributed 34 per cent to its overall revenue, next only to India's 46 per cent
• The region contributed nearly Rs 69,000 crore to L&T's revenue during April-December 2025 period
• While L&T has said that 95 per cent of its sites are working fine and business is as usual in this region, analysts said, any major damage to the Persian Gulf economies could lead to a sharp drop in order inflow for L&T, while a stoppage of work at project sites will impact its revenues in the coming quarters
• L&T also faces higher costs from a rise in energy and commodity prices post the conflict, given 55 per cent of its contracts are fixed price, according to S&P Global Ratings. L&T, however, hopes it should be able to mitigate the impact (like in Covid) through its sharing with customers
• S&P Global Ratings, however, says that L&T is likely to remain resilient given that its high-margin IT Services segment generates most of its income from North America and Europe

Tata Motors Passenger Vehicles

• Tata Motors Passenger Vehicles (TaMo PV) has been another big loser on the bourses from the ongoing conflict in West Asia
• West Asia and North Africa are key markets for its Jaguar Land Rover (JLR), accounting for nearly 11 per cent of JLR wholesale volumes in Q3FY26
• The conflict and disruption in energy supplies are also likely to hit the economies in Western Europe, which is JLR's biggest market
• A prolonged conflict and higher crude oil prices is also likely to dampen the demand for new passenger cars and SUVs, both in India and across the globe as customers become risk averse
• The conflict has come on the back of a cyber incident at JLR that led to a 43.4 per cent Y-o-Y decline in wholesales volume and 25 per cent Y-o-Y decline in retail sales in Q3FY26
• The company's stock price is down 17 per cent since the start of the conflict making it the biggest loser among passenger vehicle makers

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Feature Presentation: Aslam Hunani/Rediff