Companies with strong financials back in focus with rise in volatility

Amid rising stock market volatility and uncertain demand scenario, focus is back on companies demonstrating sustained financial performance. One way to assess the momentum in revenue and profit is to check their relative financial performance and pick up companies that have reported growth in these parameters.

According to the ETIG analysis, there are nine companies in ET 500, which have reported revenue and net profit in nine months to December that exceeded the corresponding numbers for the previous fiscal year, that is FY24. The list includes brokerage firm Motilal Oswal Financial Services, AU Small Finance Bank, infrastructure companies such as GMR Power, Texmaco Rail and Engineering, and Suzlon Energy, electronics manufacturer Dixon Technologies, new age companies Zomato and PB Fintech, and Gokul Agro Resources, which manufactures edible and nonedible oils.

Dixon Technologies, which topped the list based on revenue in the first nine months of FY25, has been reported strong numbers aided by traction in the smartphone manufacturing segment, which has more than compensated for the weakness in the LED TV and refrigerator business. The company clocked Rs28,567.6 crore in consolidated revenue and Rs 694.7 crore in net profit in the nine months to December 2024, exceeding the corresponding levels of Rs17,690.9 crore and Rs367.8 crore in FY24. In a bid to achieve backward integration, the company is foraying in mobile phone display units, which is expected to support the future growth.

The food delivery company Zomato has been betting big on the quick commerce segment by expanding the presence of its subsidiary Blinkit. It expects to double the number of dark stores from 1,007 by the end of 2025, which may affect the short term profitability while improving long term revenue visibility. The company reported Rs14,410 crore and Rs488 crore in revenue and net profit for the nine-month period compared with Rs12,114 crore and Rs351 crore in FY24.

Gokul Agro, which was established in 2014, has been benefiting from its strategy to manage the entire value chain of oil production including seed procurement, crushing, refining and storage. The company has subsidiaries in Singapore to handle international business. The company’s net profit more than doubled to Rs196.9 crore and revenue grew by 42% to Rs14,088.6 crore year-on-year in the nine months to December 2024, which in turn exceeded the FY24 revenue and net profit of Rs13,853.9 crore and Rs135.8 crore respectively.

AU SFB’s total income of Rs13,558.7 crore and net profit of Rs1,602.2 crore in nine months to December exceeded that of Rs12,251.9 crore and Rs1,534.7 crore in FY24 in that order. The stock has been under pressure amid elevated credit cost. It expects a faster growth in secured loans business compared with the unsecured loans. In addition, lower rate cycle augurs well for a recovery in margins since over two-third of the asset book is fixed priced.Among other companies in the list, wind turbine maker Suzlon has been showing improved financial performance. This has prompted credit rating agency CRISIL to upgrade the company’s credit rating twice over the past 12 months to CRISIL A. PB Fintech, which operates the country’s largest online insurance marketplace, has been leveraging the early mover advantage with large user base and is expected to benefit from improving penetration of insurance products in the country.