Data from Ace Equity shows that at least 45 stocks have bucked the broader market weakness over the past month, despite the Iran conflict roiling crude prices, accelerating foreign outflows, and pushing benchmark indices into a downtrend.
The Nifty is currently below the key 22,500 mark, with technical indicators suggesting further downside toward the 22,000–21,700 zone. Yet, beneath this weakness, a handful of pharma, energy, and industrial stocks have attracted investor attention.
Energy, renewables lead the outperformance
The strongest cluster of outperformers comes from the power and renewable energy space. Stocks such as Premier Energies, Waaree Energies, Emmvee Photovoltaic Power, and ACME Solar have delivered double-digit returns of up to 27% in one month, while names like Adani Power and NTPC Green Energy have also remained resilient.
The rally reflects a combination of structural and cyclical drivers. On the macro side, the Iran conflict has reinforced concerns around energy security, pushing investors toward domestic power producers and renewable players that are less exposed to imported fuel volatility.
At the same time, the sector continues to benefit from a strong structural backdrop. India’s renewable energy ecosystem remains underpinned by a long-term push toward 500 GW of non-fossil fuel capacity, with electricity demand expected to grow at about a 5.8% CAGR through FY30. Key drivers include infrastructure expansion, data centre growth, electrification, and improving distribution sector health.
However, the nature of the opportunity is evolving. With peak power deficits largely eliminated due to aggressive capacity additions, near-term power prices have softened, and the next phase of growth is likely to be more calibrated. Policy focus is also shifting toward storage-backed and hybrid solutions rather than standalone solar or wind.
Within this landscape, companies like Premier Energies stand out. “With strong domestic demand visibility, ALMM-driven tailwinds, and improving utilisation, Premier illustrates how mid-to-large manufacturers can transition beyond a manufacturing-only model while managing execution and capital intensity risks,” Geojit said, with a target price of Rs 1,066 on the stock.
Commodities, metals gain on supply fears
Another clear theme is the outperformance of commodity-linked plays. Stocks such as Nalco, Lloyds Metals, Godawari Power, and Supreme Petrochem have held firm or delivered gains, reflecting a classic inflation-hedge trade.
Geopolitical disruptions tend to tighten global supply chains, pushing up commodity prices and benefiting producers. With crude volatility feeding into broader input costs, metals and industrial materials have seen renewed investor interest, particularly from those seeking pricing power and real asset exposure.
This aligns with the view that commodities could remain a key outperforming asset class heading into FY27, supported by infrastructure demand, geopolitical risk premiums, and supply constraints.
Pharma returns to favour as defensive play
The pharmaceutical sector has also seen a broad-based uptick, with names such as Emcure Pharmaceuticals, Aurobindo Pharma, Granules India, Ipca Laboratories, and Lupin delivering steady gains.
The sector’s appeal in the current environment is twofold. First, pharma offers earnings defensiveness and is relatively insulated from geopolitical shocks. Second, a depreciating rupee enhances export realisations, providing an additional tailwind.
Recent performance has been supported by strong third-quarter growth, with India’s pharma market expanding 12% year-on-year, driven by chronic therapies. Newer segments such as GLP-1 therapies continue to gain traction, while companies with robust domestic portfolios, biosimilars, and peptide pipelines are increasingly preferred.
Axis Securities said it prefers names like Lupin and Aurobindo Pharma, citing strong product pipelines and healthy momentum in both US and India businesses, even as generics pricing pressure persists.
Domestic themes over global cyclicals
Beyond these core clusters, pockets of strength are visible in infrastructure, logistics, and niche consumption plays. IRB Infrastructure and Great Eastern Shipping have gained, reflecting resilience in domestic capex and freight-linked opportunities.
Meanwhile, select consumption names such as Zydus Wellness and Avenue Supermarts have held up, suggesting that investors are not exiting consumption entirely but are becoming more selective, favouring companies with pricing power and stable demand.
Even within technology, where the broader sector has seen sharp cuts, a few names like Persistent Systems and Affle have shown relative resilience.
What is not working
Financials, particularly private banks, remain under pressure. Rate-sensitive sectors such as real estate and broader FMCG have also underperformed, reflecting weak demand visibility and margin concerns.
A tactical trade or structural shift?
The key question now is whether these outperformers represent a tactical trade or a more durable trend. In the near term, much will depend on how geopolitical risks evolve. Any de-escalation in the Iran conflict could ease crude prices and trigger a rotation back into beaten-down growth sectors.
However, if uncertainty persists, the current positioning—favouring energy, commodities, and defensives—is likely to continue.
From a medium-term perspective, several of these themes have structural backing. Renewable energy remains central to India’s long-term growth strategy, pharma continues to benefit from both domestic demand and global opportunities, and commodities—particularly metals—are supported by infrastructure-led demand cycles.
That said, valuations and execution risks cannot be ignored. Renewable players, for instance, face capital intensity challenges and evolving policy dynamics, according to analysts.
(Data: Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)