Consistent Profit Growth Stocks Down Significantly This Year

Market Update: Nifty 500 Stocks Face Challenges Amidst Geopolitical Tensions

The Nifty 50 index has declined 13.5% year-to-date (YTD), with losses in all three months of the year. The latest sell-off has been triggered by escalating geopolitical tensions in the Middle East, particularly the ongoing conflict involving the US, Israel, and Iran, which has pushed crude oil prices higher.

India, the world's third-largest oil importer, remains vulnerable to rising crude prices, which tend to widen the current account deficit, pressure the rupee, and trigger foreign portfolio investor (FPI) outflows. Other headwinds, such as subdued earnings growth and uncertainty around a potential India-US trade deal, have weighed on market sentiment.

Data from Capitaline shows that nine Nifty 500 companies reported a quarter-on-quarter (QoQ) increase of 5% or more in profit after tax (PAT) consistently between January and December 2025. However, six of these nine stocks have corrected sharply, falling up to 35% YTD, potentially creating opportunities in select beaten-down names.

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Aegis Vopak Terminal, the most-beaten-down stock in the pack, has fallen 28% alone in a month, hit by the surging crude oil prices and disruption in the Strait of Hormuz. India imports approximately 65% of its LPG, of which 90%+ comes from the Middle East.

Financial stocks like SBFC Finance, Indian Overseas Bank, Home First Finance, and IIFL Finance have seen their stocks slump between 12-29% YTD despite steady earnings growth. Fears that rising crude oil prices could fan inflation and prompt the RBI to either hold or hike rates, which does not bode well for NBFCs and banks, as it raises funding costs.

Muthoot Finance, a gold loan financier, has seen a reversal in its rally as the gold prices took a knock following profit taking and fears of inflation amid rising crude oil prices. Higher for longer rates weigh on non-yielding assets like bullion.

Three companies, namely Apollo Hospitals, Waaree Energies, and Premier Energies, have seen a 5% jump in shares despite the market meltdown, helped by their presence in sectors relatively insulated from the Middle East disruptions.

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Investors should be cautious when considering fallen stocks, as the market is simply discounting slower growth ahead, higher funding costs, execution risks, or valuations that had run ahead of fundamentals.