5 Best and Worst Performing Sectors Based on Sales and Profit Growth

If you are an active investor in the stock market, it's a good idea to study the sector in question before investing in a stock.

Studying the sector will help you understand the industry dynamics in which a company operates. These include the competitive landscape, growth prospects, and risks.

This context is crucial because a company's performance is often influenced by sector-specific factors such as regulatory changes, technological shifts, and consumer behaviour trends.

By analysing sectors, investors can avoid investing in slow-growing or struggling sectors and better manage risks inherent to specific industries.

In this editorial, we look at five sectors that have been performing well and five of the worst performers. This is based on results for the quarter ending March 2025 compared to the quarter ending March 2024.

These are also based on the sector's aggregate sales and profit growth. We have used the Equitymaster filter to arrive at these sectors.

Please note, there could be extra ordinary events at prominent companies which could have dragged down the performance of some sectors. We have not factored these.

Best Performing Sectors

#1 Fertilisers

First on our list of best performing sector is fertilisers.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
1	Fertilisers	2,15,595	5,237	217,339	11,903	0.8%	127.3%

The fertiliser sector has done well with net profits of listed entities rising 127.3% in the March 2025 quarter, compared to the same period in 2024. Sales, on the other hand, showed marginal growth of 0.8% YoY.

Among the companies that did well were Coromandel International (net profit growth of 241.91%) and Mangalore Chemicals (net profit growth of 231.2%).

The Indian government continued to provide heavy subsidies on fertilisers, making them affordable for farmers and supporting agricultural productivity.

Initiatives like the New Urea Policy encouraged domestic production expansion, including the establishment of new urea plants and promotion of neem-coated urea to improve nutrient efficiency and soil health.

The future outlook for the industry remains strong on the back of government support for the agriculture industry. The prediction of normal monsoons this year is good for the fertiliser industry as it would lead to increased demand.

#2 Chemicals

Second on our list of best performing sectors is chemicals.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
2	Chemicals	7,22,172	29,710	7,87,285	57,590	9.0%	93.8%

The chemicals sector is extremely diversified with a host of products. It involves a lot of players.

Hence, it's extremely difficult to analyse each sub-category. However, in terms of aggregates, net profits of listed companies in Q4 FY25 surged a solid 93.8%. Sales in Q4 FY25 increased marginally over Q4 FY24.

In sub-categories, the specialty chemicals sector performed relatively better than others. This was in subsegments like food and nutrition, flavours and fragrances, adhesives, and sealants.

Amal Products had a fantastic quarter with net profits surging 1,717.2%. Sadhana Nitro too performed well from the sector with a net profit growth of 688.5%.

The sector's outlook remains mixed due to global uncertainties, soft demand, and oversupply in some value chains.

However, India's chemicals industry holds a competitive edge due to geopolitical shifts, improving infrastructure, and a robust domestic market.

#3 FMCG

Third on our list of sectors that saw good growth in Q4 FY25 is the fast-moving good consumer goods (FMCG) sector.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
3	FMCG	3,80,757	27,800	4,09,490	51,530	7.50%	85.40%

Among the larger companies that did well from the sector were Gillette India (net profit growth of 60.1%) and Tata Consumer (net profit growth of 51.1%).

One of the reasons for good growth in the FMCG sector was product portfolio expansion through acquisitions. This enabled the entry into high-growth, high-margin categories such as organic and wellness products.

Rapid growth of e-commerce platforms significantly boosted FMCG sales by providing consumers easy access to a wide range of products.

FMCG companies leveraged digital channels to expand market penetration, especially in smaller towns and rural areas, enhancing convenience and competitive pricing.

Moving ahead, the rise in disposable incomes should help demand. However, commodity inflation can weight on profitability.

#4 Solar Energy

Next on our list is solar energy.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
4	Solar Energy	2,733	513	4,766	938	74.4%	82.7%

The solar energy industry did exceptionally well in Q4 FY25. In fact, it was one sector that saw sales and net profits both rise in tandem.

Sales for companies from the sector surged a solid 74.4%, while net profits jumped 82.7% in Q4 FY25 compared to the same period in 2024.

Waaree Renewable Tech did well with net profit growth of 82.7%.

Among states, Rajasthan, Gujarat, Maharashtra, Karnataka, and Andhra Pradesh were key contributors to solar capacity additions.

India aims to achieve 500 GW of renewable energy capacity by 2030, with solar power expected to contribute nearly 300 GW of this total. This underscores solar energy as the cornerstone of India's clean energy transition.

Declining costs of solar modules, integration with energy storage, and innovations in solar PV technology will further enhance solar's competitiveness and scalability. The industry is poised for good growth in the future.

#5 Aluminium

Next on our list is Aluminium.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
5	Aluminium	6,16,551	41,614	7,28,077	74,212	18.10%	78.30%

Like the solar industry, the aluminium industry saw strong growth in both sales and net profits. The Indian aluminium industry in Q4 FY25 demonstrated solid growth driven by expanding demand from automotive and construction sectors.

Among companies, Sudal Industries did well with net profits growing 189.6%, while MAN Industries saw profits surge 182.4%.

What benefitted the sector were capacity additions aligned with renewable energy integration, and a tightening secondary aluminium market.

The secondary aluminium (recycled aluminium) industry saw price increases due to strong demand and scrap shortages, with alloyed ingot prices rising significantly.

The demand for aluminium in the coming years is expected to be strong. Construction and infrastructure projects, including smart cities and metro rail expansions, will continue to drive demand.

5 Worst Performing Sectors

#1 Computer Hardware

First on our list of worst performers is computer hardware.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
1	Computer Hardware	4,004	482	4,687	-51	17.0%	-110.5%

There are not too many listed companies in the space. On a closer examination we realised that a few companies dragged down the performance of the sector. In any case, sales grew 17% in Q4 FY25 compared to Q4 FY24. However, net profits for these listed companies dropped a whopping 110.5%.

Among the companies that did badly were BPL, which saw losses and a degrowth of -5797%.

One of the biggest challenges for companies in the sector is competition from companies in China. A large part of computer hardware is imported into India.

Shortages of skilled labour and volatility in raw material prices is also weighing on the sector.

Addressing these issues through enhanced manufacturing capabilities, workforce upskilling, innovation, and government support is essential for sustainable growth.

#2 Shipping

Second on our list of worst performing sectors is shipping.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
2	Shipping	37,611	8,880	33,791	3,582	-10.2%	-59.7%

The shipping sector performed badly both on the sales and the net profits front for the quarter ending March 2025. In fact, net profits slumped -59.70%, compared to the corresponding period last year.

Among the companies that did not do well were Shreyas Shipping and SKS Shipping.

Fluctuating global trade volumes created uncertainty and reduced demand. This was seen in some shipping segments like bulk carriers.

Going forward, geo-political tensions across the globe are likely to weigh on the sector. Stability in global trade would remain a key to the prospects of the shipping industry. The same hinges on economic growth which is expected to remain more stable in 2025.

Also, geopolitical tensions can weigh on fuel prices which in turn can squeeze margins for shipping companies.

#3 Telecom Cables

Third on our list of worst performing sectors is telecom cables.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
3	Telecom Cables	49,303	1,381	59,455	607	20.6%	-56.0%

The telecom cables sector did not do well in terms of net profits. However, the companies did perform well in terms of sales.

A few companies dragged down the profits of the industry. Tejas Networks and Vindhya Telelinks in particular had a bad quarter.

Many companies from the sector faced high imports costs. Moving ahead the telecom cables industry is expected to do well on the back of rising 5G network rollouts and fiberisation.

However, rising inputs costs would remain one of the key challenges for the sector.

#4 Paper

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
4	Paper	89,026	5,297	92,370	3,081	3.8%	-41.8%

The paper industry had a flat performance in terms of sales. However, net profits dropped 41.8% in Q4 FY25 compared to Q4 FY24.

Malu Paper and Star Paper had a quarter to forget.

The paper industry was impacted by rising imports. According to reports, over the past few years, imports of paper and paperboard into India have more than doubled. It reached a record 2.05 million tonnes in the FY25.

Not all segments of the paper industry did badly. For example, packaging and sustainable product segments remained strong. Most analysts expect the industry to see gradual recovery in FY26. However, intense competition from Chinese imports needs to be watched.

#5 Leather

Last on the list of worst performing sectors is the leather industry.

		March-2024		March-2025		YoY Change
Rank	Sector	Net Sales (Rs m)	PAT (Rs m)	Net Sales (Rs m)	PAT (Rs m)	YoY Sales Change (%)	YoY PAT Change (%)
5	Leather	8,329	184	8,604	125	3.3%	-31.9%

The leather industry had a flat performance in terms of sales, but, net profits fell sharply.

Mirza International and Worldwide LE were two companies that had a poor quarter.

The export segment of the leather industry did well. However, the domestic industry did face challenges. One of the big challenges were increase in input costs, particularly raw materials and labour costs.

Moving ahead, the export market will be on wait and watch due to tariff issues. This is particularly for exports to the US which is substantial. Domestically, demand is expected to be good, though rising raw material prices could compress margins.

Conclusion

Some sectors like solar energy and chemicals are expected to do well in the coming quarters. The fertiliser industry too should follow though it still relies a lot on government policies. Aluminium industry would continue to see growth coming through an uptick in domestic demand.

On the other hand, some sectors that did badly including paper will continue to worry about cheap imports. As far as shipping is concerned, geopolitical tensions could weigh on the sector.

To conclude, some sectors will have volatile performance based on demand, rising inputs costs, geopolitical tensions and the evolving tariff scenario.

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