In a year marked by global uncertainties and domestic elections that kept investors on edge, India’s stock market has delivered some truly unexpected winners. While blue-chip giants have maintained steady performance, it’s the momentum stocks, the ones that consistently rise week after week, that have truly captured investors’ attention this year. Backed by strong fundamentals and investor optimism, these stocks break barriers and generate sharp upside in a matter of days or weeks.
With economic conditions stabilizing and sectoral trends evolving rapidly, momentum investing has become a favourite strategy for both seasoned traders and retail investors looking for growth opportunities.
In this article, we’ll explore what momentum stocks are and how they work, and some key indicators to find them.
What Are Momentum Stocks?
Momentum stocks are driven by strong buying interest, resulting in price trends that climb higher than the broader market average. This upward trend is typically supported by strong earnings, sectoral growth, and increased investor interest.
The core idea behind momentum investing is simple- stocks that are already going up tend to keep going up, at least in the short term. Investors who spot these trends early can benefit from price surges before momentum fades.
How to Identify Momentum Stocks?
Momentum stocks aren’t just about hype. Certain technical and fundamental indicators help identify them:
- Relative Strength Index (RSI): Stocks with an RSI above 60-70 often show strong momentum.
- Price above Moving Averages: Stocks trading consistently above their 50-day and 200-day moving averages may indicate continued strength.
- Volume Surges: Sharp increases in trading volume usually signal strong investor interest.
- Quarterly Earnings Growth: Companies delivering positive surprises in earnings often spark a momentum wave.
- Sector Leadership: Stocks from high-growth sectors like EVs, defence, or renewables often ride the wave of industry-wide momentum.
Momentum Stocks That Outperformed in 2025
Let’s look at a few momentum stocks in India that surprised everyone this year with their returns:
Infosys (INFY)
In mid-2025, Infosys surprised the market with stronger-than-expected performance, posting solid sequential revenue growth in Q1 FY26. It outpaced rivals like TCS and HCL Tech, driven by improved pricing strategies and more efficient use of resources. This operational efficiency has translated into positive stock momentum, allowing Infosys to outperform many of its peers in the IT sector. The company’s resilience in a challenging global tech environment has made it a favourite among momentum investors.
Reliance Industries (RELIANCE)
Reliance is among the most valuable companies in India, and in 2025, it’s once again proving its market dominance. Its diversified business model and consistent quarterly performance helped the stock break out of a consolidation phase. Reliance Industries’ shares are experiencing a significant rally this year, outperforming the Nifty50 and adding $40 billion to its market capitalization.
Larsen & Toubro (L&T)
L&T delivered a strong earnings beat to kick off FY26, triggering a 4.5% intraday jump and sustained price momentum. Robust order inflows and a healthy ₹6.13 trillion backlog have propelled its stock upward, with analysts projecting 15–20% further upside.
Mahindra & Mahindra (M&M)
Mahindra & Mahindra (M&M) reported a 32% YoY jump in Q1 FY26 profit to ₹3,450 crore, backed by strong SUV and tractor sales. Revenue rose 26% to ₹34,143 crore, with a record market share in the tractor segment. This performance has made M&M one of the top momentum stocks in the auto sector this year.
Conclusion
Momentum investing in 2025 has delivered some spectacular results in the Indian stock market. From PSUs to niche manufacturers, several stocks have outpaced expectations and delivered impressive returns. For investors looking to ride market trends, understanding the momentum strategy and staying updated on technical indicators can open doors to short-term opportunities. However, as with all strategies, momentum investing requires caution, research, and a clear risk management plan.
