In investing, excitement rarely builds wealth—discipline does. Few frameworks embody this truth better than the capital allocation philosophy of Warren Buffett and Charlie Munger. Their approach is not about chasing stories or timing markets, but about protecting capital, deploying it rationally, and letting compounding do the heavy lifting.

Recently, six global and domestic brokerages—Morgan Stanley, HSBC, BofA Securities, Nomura, Jefferies, and ICICI Direct—identified 75 Indian stocks they believe can lead markets if conditions improve in 2026, calling them the “Dhurandhars” of Indian equities: heavyweights expected to shoulder returns when the cycle turns. (Economic Times, December 2025)

Viewed through a Buffett–Munger lens, this list is more conservative—and more thoughtful—than it first appears.

Buffett–Munger Capital Allocation: A Brief Lens

Across decades of Berkshire Hathaway shareholder letters and Charlie Munger’s speeches, four enduring principles stand out:

  1. Capital preservation comes first.
  2. High returns on incremental capital matter more than headline growth.
  3. Long reinvestment runways enable compounding.
  4. Opportunity cost governs every capital decision.

This framework offers a powerful way to interpret the Dhurandhar list—not as a trading basket, but as a capital deployment universe.

1. Capital Preservation: The Non-Negotiable Rule

“The first rule is not to lose money. The second rule is not to forget the first rule.” — Warren Buffett, Berkshire Hathaway Shareholder Letter.

Several Dhurandhar stocks function as capital anchors—businesses designed to survive adverse cycles with limited permanent damage.

Large private and public sector banks such as HDFC Bank, ICICI Bank, State Bank of India, Kotak Mahindra Bank, and Axis Bank fall squarely into this category. Their importance lies not just in growth, but in systemic relevance, diversified lending books, and regulatory oversight.

Similarly, consumer staples and utilities like Marico, Pidilite Industries, Varun Beverages, GAIL, Indraprastha Gas, and Mahanagar Gas offer resilience through pricing power or regulated cash flows. Healthcare leaders such as Apollo Hospitals, Dr. Reddy’s Laboratories, and Alkem Laboratories provide an additional defensive layer.

These businesses mirror the role of Coca-Cola, American Express, and regulated utilities in Berkshire’s portfolio—they protect capital first, then grow.

2. High ROIC and Economic Moats: Quiet Wealth Creators

“A great business earns high returns on capital and keeps them.” — Charlie Munger (Poor Charlie’s Almanack).

Several Dhurandhar stocks exhibit structural advantages that allow them to earn superior returns on capital without constant reinvestment.

In consumption, Titan Company exemplifies brand-led pricing power, while Kalyan Jewellers and United Spirits benefit from scale and distribution moats. In financials, Bajaj Finance, Bajaj Finserv, and Muthoot Finance have repeatedly demonstrated an ability to convert capital into earnings at rates superior to peers.

Asset-light platforms such as Jubilant FoodWorks, MakeMyTrip, and MedPlus Health Services also fit this bucket, where incremental growth requires far less capital than traditional manufacturing.

This is the category Munger prized most—businesses that grow not because they reinvest heavily, but because their economics are inherently superior.

3. Reinvestment Runway and Compounding: Let Time Do the Work

“The ideal business earns high returns and reinvests large amounts at those returns.” — Warren Buffett.

A significant portion of the Dhurandhar list is made up of long-cycle compounders, especially in infrastructure, manufacturing, autos, and technology.

Companies like Larsen & Toubro, UltraTech Cement, Maruti Suzuki, and Mahindra & Mahindra benefit from India’s multi-decade urbanization, infrastructure, and consumption story. Manufacturing enablers such as Dixon Technologies, CG Power, Samvardhana Motherson, and Sona BLW Precision Forgings align with global supply-chain diversification trends.

In technology services, Infosys, LTIMindtree, Coforge, and eClerx Services offer relatively predictable cash flows and reinvestment opportunities without excessive balance-sheet risk.

These businesses resemble Berkshire’s investments in railroads and industrials—slow, steady, and relentless compounders.

4. Opportunity Cost and Capital Re-Deployment: Buying When Pessimism Peaks

“The biggest investing mistake is failing to consider opportunity cost.” — Charlie Munger.

Some Dhurandhar stocks stand out not because they are loved—but because expectations are subdued while fundamentals improve.

Energy and telecom names such as Reliance Industries, Bharti Airtel, BPCL, and Indian Oil Corporation fit this mould. So do rate-cycle beneficiaries like AU Small Finance Bank, Shriram Finance, Can Fin Homes, and IDFC First Bank.

Real estate developers and REITs—including DLF, Godrej Properties, Lodha Group, Phoenix Mills, Embassy Office Parks REIT, Mindspace REIT, and Nexus Select Trust—represent classic capital-rotation opportunities where cash flows strengthen before sentiment turns.

Buffett’s lesson here is timeless: capital should flow where pessimism exceeds reality.

What the Dhurandhar List Tells Us

The Dhurandhar universe is not a speculative forecast. It is a capital discipline statement:

  • Preference for earnings over narratives
  • Balance-sheet strength over leverage-driven growth
  • Incremental return on capital over headline expansion

In essence, it reflects what Buffett wrote decades ago:

“Time is the friend of the wonderful business, the enemy of the mediocre.”

Final Thought

If 2026 rewards substance over hype, these Dhurandhar stocks are positioned to do the heavy lifting—not through excitement, but through endurance.

Viewed through the Buffett–Munger framework, they are less a trading list and more a patient investor’s capital allocation map.

Dr. Prahlada N.B
MBBS (JJMMC), MS (PGIMER, Chandigarh). 
MBA in Healthcare & Hospital Management (BITS, Pilani), 
Postgraduate Certificate in Technology Leadership and Innovation (MIT, USA)
Executive Programme in Strategic Management (IIM, Lucknow)
Senior Management Programme in Healthcare Management (IIM, Kozhikode)
Advanced Certificate in AI for Digital Health and Imaging Program (IISc, Bengaluru). 

Senior Professor and former Head, 
Department of ENT-Head & Neck Surgery, Skull Base Surgery, Cochlear Implant Surgery. 
Basaveshwara Medical College & Hospital, Chitradurga, Karnataka, India. 

My Vision: I don’t want to be a genius.  I want to be a person with a bundle of experience. 

My Mission: Help others achieve their life’s objectives in my presence or absence!

My Values:  Creating value for others. 

References: 

  • “75 stocks set to be Dhurandhar bets in 2026, six brokerages tell investors”, The Economic Times, December 2025
  • Buffett W. Berkshire Hathaway Shareholder Letters (1987–2023)
  • Munger C. Poor Charlie’s Almanack
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