Fueling Up and Digging Down: Russian Earnings Split Along a Consumption Fault Line

This season's Russian earnings are a study in divergence: consumer-facing and financial sectors are sprinting ahead, while commodity producers are stuck in reverse. The median revenue growth spread between the best and worst industries is a staggering 69 percentage points, from fuel retail's +42.7% to coal's -26.4%. The winners are riding domestic demand and import substitution; the losers are battling global prices and sanctions. This is not a market-wide recovery — it's a rotation.

Revenue growth by industry (median YoY)

Fuel retail and finance are the new growth engines, with Evrotrans and MTS Bank leading the charge.

The fuel retail sector, though represented by a single name, is the standout: Evrotrans grew revenue +42.7% year over year, with a 3-year CAGR of +60.0% — and it trades at a P/E of just 1.1x. In finance, MTS Bank's revenue surged +64.9% and net profit +157.9%, while Sovcombank posted +69.1% revenue and a stunning +410.8% net profit growth. These are not just cyclical bounces; they reflect structural shifts in consumer spending and credit demand.

Commodity sectors are in the dumps, with coal and chemicals suffering the steepest declines.

The laggards are unmistakable: Raspadskaya's revenue fell -26.4%, and the coal sector's median is the same. In chemicals, Phosagro's revenue dropped -17.5% and net profit collapsed -99.5%, while Acron's net profit fell -81.5%. Even metals are bleeding: Mechel's revenue -25.9% and EBITDA -149.2%, and Severstal's net profit swung to a -112.7% loss. These are margin-crushing environments, and the market is pricing in continued pain.

The plot twist: FGC UES and IDGC South are not just utilities — they're growth monsters.

While most power utilities grew at a steady double-digit clip, two names exploded: FGC UES saw revenue +21.8% and EBITDA +471.2%, while IDGC South's revenue surged +146.7% and net profit +346.4%. These are not typical utility numbers — they suggest tariff re-basing, catch-up investment, or one-off gains. Either way, the market has noticed: FGC UES trades at a P/E of 0.5x, a ridiculously low multiple for a company growing this fast.

Cheap for a reason, or a bargain? The valuation gap is wide.

The market is paying up for growth in IT: Positive Technologies trades at 6.2x earnings despite +38.9% revenue growth, and Ozon at 42.1x P/E with +47.8% revenue growth — that's priced for perfection. Meanwhile, Evrotrans at 1.1x P/E with +42.7% growth looks absurdly cheap, and FGC UES at 0.5x P/E with +21.8% growth is a value investor's dream. The market is clearly rewarding domestic consumption and punishing commodity exposure, but the gap may be overdone.

Yield hunters still have options, but they come with risks.

For income, the standout is TNS energy with a P/E of 2.3x and EV/EBITDA of 0.6x — likely a high single-digit yield, though the data doesn't specify. Similarly, IDGC North West at 2.1x P/E and 0.9x EV/EBITDA suggests a solid payout. But beware: high yields in Russian utilities often come with regulatory risk and one-off effects, as seen in Mosenergo's P/E of 48x despite a -161% net profit swing.

Looking at the longer horizon, APRI's 3-year revenue CAGR of +157.5% is breathtaking, and Evrotrans at +60.0% is not far behind. These are compounders in niche markets. But the macro backdrop remains fragile: with oil and gas revenue declining across the board, and the central bank's high rates squeezing consumers, the next quarter will test whether domestic demand can keep carrying the market. Watch for rate cuts — they could be the catalyst that lifts the laggards.

Players: growth & yield (no absolute levels)