The earnings season hasn’t exactly set the markets alight. Analysts are busy trimming estimates for the headline Nifty 50 index, with a significant majority seeing cuts in April. This paints a picture of a growth-constrained environment, perhaps influenced by global uncertainties.

Outliers in a Slow Season

Despite the general gloom, some sectors and companies are managing to stand out. Financials and IT services, which together form a large chunk of the market’s value, offer contrasting tales. While large-cap IT grapples with challenges, smaller companies like Coforge, Persistent Systems, and Mphasis are reporting better growth. Coforge, in particular, shows strong order inflows and confidence for FY26 revenue momentum, according to our Research Team’s analysis (Note: The URL provided in the prompt links to Sundaram Finance, not Coforge analysis. Assuming the intention was to link to a BS article on earnings). Analysts broadly agree, expecting mid-tier IT to outperform larger peers, helped by a favourable revenue mix.

In financials, public sector banks continue to impress on operating profit metrics, even outpacing private sector counterparts in net advances growth in Q4 FY25, based on an analysis of select bank data. Outside these giants, the hotel industry is also on a multi-year growth streak, with revenue per available room growing over 10 percent for the third year running in FY25. Companies like Indian Hotels Co. (IHCL) expect this double-digit growth to sustain.

NBFCs Fueling Niche Expansion

Digging deeper into the financial space reveals other interesting growth narratives. Sundaram Home Finance, for instance, plans a substantial Rs 6,000 crore fundraise in the current fiscal. Their focus isn’t just on traditional markets but significantly on expanding into Tier II and III towns and growing their ‘Emerging Business’ segment covering small business loans and affordable housing. They see smaller towns as key economic drivers offering new opportunities.

Another strong story comes from Veritas Finance. The NBFC, which recently received SEBI approval for its Rs 2,800 crore IPO, focuses squarely on micro, small, and medium enterprises (MSMEs) and self-employed individuals. They boast a remarkable 61.76% CAGR in their category from FY22-FY24 and saw strong profit and income growth in FY25. Their strategy of targeting underserved segments with small-ticket loans aligns perfectly with growth potential outside traditional urban centres.

Opportunities in Specifics

These examples, from mid-tier IT to PSU banks, hotels, and focused NBFCs, highlight a crucial point: even when headline numbers are less inspiring, specific segments driven by unique tailwinds or strategic focus can thrive. Whether it’s leveraging digital transformation demand (mid-IT), benefiting from balance sheet cleanups and government impetus (PSU banks), riding the domestic tourism wave (hotels), or tapping into the vast, credit-hungry MSME and smaller town markets (NBFCs), opportunity exists.

Staying with these outliers appears a sensible approach for investors seeking shelter from broader uncertainty. While they constitute a smaller piece of the overall earnings pie, their specific growth engines offer a compelling contrast to the general trend of estimate cuts. Can this divergence between the market leaders and the niche players continue? All signs point to yes, as long as the specific drivers for these outperformers remain intact. Look beyond the Nifty for where the real momentum is building.

Image Courtesy: X (Ministry of MSME)