After a slow start to FY26, Indian companies finally found their rhythm in Q2. Average profit growth jumped over 15% YoY, signalling investors that business momentum is returning. The recovery was broad as well, with renewables, metals, and consumer-focused sectors all reporting healthier numbers, making this one of the widest earnings rebounds in recent quarters.

Three factors powered this: cheaper raw materials, stronger demand, and better financial health (less debt). Mid-sized industrial firms gained the most, as falling interest costs directly lifted their margins.

“Mid-caps have now outperformed large-caps for the fourth quarter in a row, showing that India’s earnings recovery is becoming broader. Overall, market conditions look healthier than they did last year,” a Motilal Oswal report said.

The shift from Q1 is noticeable. The year began with soft guidance and hesitant spending, but Q2 made analysts more optimistic. Many now believe the worst of the slowdown is behind us. As Kotak Institutional Equities noted, “The Q2FY26 earnings season may mark a turning point: we expect Nifty 50 profits to grow ~10% in FY26, driven by HDFC Bank, ICICI Bank and Reliance.”

Against this backdrop, some industries are doing better than others. In this edition of Chart of the Week, we take a close look at the top performers—from jewellery and solar power to finance and food—to see exactly who is powering this revival and whether they can keep this momentum going for the rest of the year.

Festive buying lifts jewellery demand in Q2

The gems & jewellery industry delivered one of the most impressive performances. The industry’s revenue more than doubled, helped by an early start to festive buying. With Navratri falling in early October, customers began shopping in September, giving organised players a head start. High gold prices also pushed buyers toward branded chains, widening the gap with unorganised sellers.

Titan posted a 59% jump in net profit and strong revenue growth, aided by its gold exchange program. Kalyan Jewellers’ net profit nearly doubled, supported by stronger sales in newer non-South markets. Rajesh Exports saw its refining and export business rebound, delivering the sharpest revenue growth in the sector.

Management commentary was equally upbeat. “Same-store sales for the 30 days up to Diwali were over 30%, and demand stayed firm even after,” said Ramesh Kalyanaraman, Executive Director at Kalyan Jewellers. Titan observed a similar trend: “When gold prices didn’t fall, people who were waiting to buy finally went ahead with their purchases,” said MD CK Venkataraman.

Renewable push supports solar manufacturers

The electrical equipment space, especially solar energy, stood out. Industry revenue grew around 37%, while net profit surged over 80%. Rapid adoption of renewables, simplified power-purchase policies, and a cut in GST for solar and wind gear from 12% to 5% lowered project costs and boosted demand.

Vikram Solar saw one of the largest jumps as module sales nearly tripled amid strong domestic and export demand. Waaree Energies’ profit more than doubled in Q2, supported by 2.6 GW module output and robust orders. However, the company faced an income-tax raid on November 18 linked to alleged discrepancies in past export incentives. The stock has fallen by 7.6% in the last month.

HBL Engineering also joined the rally, with a 131% rise in revenue and 344% growth in net profit. However, their management took a cautious tone, noting that while Q2 was exceptionally strong, FY26 results should not necessarily be used as a baseline for all future quarters.

A healthy monsoon keeps fertilizers in demand

The fertilizer industry had a strong Q2, with revenue rising 36% and net profit surging 63%. A favourable monsoon lifted sowing activity across major agricultural belts, especially for Rabi crops.

Paradeep Phosphates benefited from its merger with Mangalore Chemicals, while Chambal Fertilisers saw better traction in its non-urea segment. Coromandel International gained from its new phosphoric-acid plant, which reduced raw-material interruptions and enabled smoother production, lifting revenue 30%.

“With favourable monsoons and positive farmer sentiment, we expanded distribution. Fertiliser plants operated at full capacity, lifting sales volumes by 17% in H1FY26,” said S Sankarasubramanian, MD & CEO of Coromandel International.

Input cost relief helps edible oil and food players

Edible oils and food & beverages delivered steady growth this quarter, though the drivers differed across segments. Edible oils’ profit rose 27% as lower import duties on crude palm, soya, and sunflower oils brought down refining costs and improved volumes for manufacturers.

AWL Agri Business posted higher revenue but saw profits decline because duty-free imports from Nepal increased competition and pressured domestic refiners. The stock also slipped after Adani Commodities sold its entire remaining stake in the company, marking a complete exit. 

CIAN Agro swung to a Rs 19 crore profit from a marginal loss last year, helped by the acquisition of Sec One Sales & Marketing in August 2025, which improved its sales and distribution reach. Patanjali Foods also recorded a strong quarter, driven by branded edible oils and FMCG sales.

Meanwhile, the food & beverages industry grew 20% in revenue as household spending picked up after the RBI’s 50 bps rate cut and recent income-tax changes. Manorama Industries saw higher demand for its specialty fats, helping the company more than double its profit. Varun Beverages also reported a profit increase, driven by higher export volumes and smoother cost management, including timely sourcing of key raw materials.

Internet software firms struggle while finance remains stable

The internet software & services and finance sectors showed a clear divergence. Internet software companies grew their top line, but profit fell sharply due to company-specific setbacks. Nazara Technologies slipped into losses after a ban on several real-money games hit one of its most profitable verticals.

One97 Communications (Paytm) reported a steep fall in net profit due to the absence of last year’s one-time gain from the sale of its ticketing business to Eternal. PB Fintech was the clear outlier in the sector, with profit more than doubling as its insurance and lending platforms continued to scale smoothly.

In contrast, the finance sector was far more stable, supported by steady credit demand and manageable funding costs. Bajaj Finance continued to see healthy loan growth, helped by rising consumer and SME borrowing. Muthoot Finance’s performance improved as high gold prices and low delinquencies supported its core lending business.

Jio Financial Services’ revenue grew sharply, but profit rose only 1% as they continued making upfront investments to expand their digital lending and payments platform.