Titan and Coforge shine as pharma and staples hit the skids

This quarter's earnings season was defined by a stark divergence: consumer-facing and commodity plays delivered explosive growth, while defensive sectors like pharmaceuticals and consumer staples stumbled. Retail & jewellery led with median revenue growth of +40.3%, followed closely by automobiles at +34.8%, while consumer staples actually contracted by -0.4%. The gap between the best and worst sectors was a whopping 40.7 percentage points, highlighting a market that is rewarding cyclical exposure and punishing safety.

Revenue growth by industry (median YoY)

Titan and Coforge steal the growth crown

Titan Company, in retail & jewellery, posted a stellar +40.3% revenue growth, with EBITDA up +57.0% and net profit surging +62.9%. This performance is all the more impressive given its 3-year revenue CAGR of +29.2%, indicating sustained momentum. In IT services, Coforge stood out with revenue up +49.2%, EBITDA up +80.4%, and net profit up +63.4%, showcasing the strongest growth among its peers.

Bajaj Auto in automobiles also impressed with revenue up +65.0% and EBITDA up +62.2%, though net profit growth lagged at +45.9%. Divi's Laboratories in pharmaceuticals was a rare bright spot in an otherwise weak sector, with revenue up +27.8%, EBITDA up +80.9%, and net profit up +65.5%.

Pharma and staples stumble badly

The pharmaceuticals sector, usually a defensive haven, saw Dr. Reddy's Laboratories report a revenue decline of -5.6%, with EBITDA plummeting -61.1% and net profit crashing -68.7%. Cipla also struggled, with revenue up just +3.5% but EBITDA down -32.9% and net profit down -39.2%. In consumer staples, ITC was a major drag, with revenue falling -11.1%, EBITDA down -24.0%, and net profit down -16.2%. Hindustan Unilever managed revenue growth of +10.3% but net profit still slipped -3.0%.

The plot twist: auto components diverge wildly

While the auto components sector posted median revenue growth of +17.6%, the performance of its two constituents couldn't be more different. Samvardhana Motherson International delivered a stellar +101.6% net profit growth, with revenue up +16.6% and EBITDA up +32.6%. In stark contrast, Bharat Forge saw revenue rise +18.7% but EBITDA collapse -44.7% and net profit plunge -131.6%, a dramatic divergence within the same industry.

Cheap for growth: Hindalco and Lupin stand out

Hindalco Industries in aluminium & copper trades at a P/E of 13.1x and EV/EBITDA of 7.1x, yet delivered revenue growth of +32.1% and net profit growth of +75.1%. That's remarkably cheap for such rapid growth. Lupin in pharmaceuticals also looks attractive: P/E of 17.1x and EV/EBITDA of 10.7x, with revenue up +33.3% and EBITDA up +51.8%. On the expensive side, Divi's Laboratories trades at a P/E of 86.7x and EV/EBITDA of 63.7x, while Titan commands a P/E of 74.3x and EV/EBITDA of 48.1x — both priced for perfection.

Income: banks offer the best yields

For income-focused investors, banks stand out. State Bank of India offers a P/E of 10.3x, HDFC Bank 15.7x, and ICICI Bank 16.7x — all with net profit growth of +13.7%, +18.4%, and +13.9% respectively. While dividend yields are not provided, these low multiples suggest potential for attractive payouts.

Looking at 3-year revenue CAGRs, Titan (+29.2%) and Coforge (+27.0%) stand out as consistent compounders. TVS Motor also impresses with a +26.9% CAGR. As we look ahead, watch for whether the pharma and staples weakness persists or reverses, and whether the auto and retail momentum can be sustained. The market is clearly favoring growth and cyclicality over defensiveness, but valuations in some pockets are stretched.

Players: growth & yield (no absolute levels)