These Stocks have Topped Q2 Guidance, Boost Forecast

In a quarter marked by volatility, many sectors have felt the squeeze from macroeconomic headwinds.

Industries like auto, building materials, cement, and FMCG struggling to maintain momentum. Rising interest rates, inflation, and shifting global demand have all contributed to weaker performance in these sectors.

However, others, particularly travel, real estate, and consumer discretionary, have shown resilience, benefiting from the onset of the festive season and pent-up demand.

Looking ahead to the second half of FY25, there is renewed optimism, supported by high-frequency data signalling a potential economic recovery.

PMI readings for manufacturing and services in October, which stood at 57.5 and 58.5, indicate robust economic activity. Credit growth remains strong, with non-food credit rising by 12.8% YoY and industry loans growing by 9.1% YoY.

Housing loan growth continues to perform well at 18.3% YoY, underscoring stability in the financial sector. Moreover, the centre's capital expenditure surged to Rs 1,140 billion (bn) in September, further bolstering the case for a recovery.

Amid this backdrop, a select group of companies have exceeded expectations and delivered strong Q2 results.

These businesses have demonstrated agility in navigating the current challenges. They have raised their outlook for the coming months, signalling that growth opportunities remain despite the broader economic uncertainties.

#1 Vijaya Diagnostics

First on our list is Vijaya Diagnostics.

Vijaya Diagnostics is a key healthcare diagnostics player in Southern India, backed by an expansive network and robust brand recognition. It is known for its comprehensive range of pathology and radiology services, with 121 centres across 20 cities.

In Q2FY25, Vijaya Diagnostics delivered an impressive all-around beat, exceeding market expectations. The company reported a 23% YoY growth in sales, largely driven by volume increases, with samples up by 22% and footfall up by 18%.

This came on the back of Vijaya's well-executed hub-and-spoke model, which leverages its dense network to capture demand from both organized and unorganized segments, as well as the increasing shift toward organized diagnostic services.

Building on its strong Q2 results, Vijaya is now accelerating its growth plans through both organic and inorganic expansions. The company aims to establish 10-12 additional hubs by FY26, deepening its presence in core markets through its hub-and-spoke model.

Management is also setting its sights on expanding into Bangalore, marking a strategic step in broadening its geographic reach and tapping into fresh demand.

Vijaya Diagnostics Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	16.9%	9.72%	22.29%	-0.38%	20.79%
Operating Profit Margin (%)	43.68%	47.20%	46.83%	42.72%	44.12%
Net Profit Margin (%)	18.45%	22.60%	23.93%	18.55%	21.84%
Return on Capital Employed(%)	35.47%	37.97%	39.37%	26.53%	30.40%
Return on Equity (%)	26.07%	26.91%	26.85%	16.89%	19.96%

Source: Equitymaster

Looking at its long-term financials, Vijaya Diagnostics has sustained steady growth, with a five-year revenue Compound Annual Growth Rate CAGR of 13.5% and a net profit CAGR of 20.9%.

Profitability remains solid, with a three-year average return on equity (RoE) of 23.3% and a return on capital employed (RoCE) at 33.9%. Additionally, Vijaya's debt-free balance sheet and strong cash flows have enabled it to consistently reward shareholders.

To know more about the company, check out its financial factsheet and latest financial results.

#2 Dixon Technologies

Next is Dixon Technologies.

Dixon Technologies, a leader in the Electronic Manufacturing Services (EMS) space since 1993, has carved a niche in India's rapidly growing electronics sector.

The company enjoys a diverse portfolio that spans consumer electronics, home appliances, mobile phones, CCTVs, and LED TV screens.

The EMS mogul's recent quarterly performance surpassed expectations, largely due to a faster-than-anticipated ramp-up in its mobile segment. Higher volumes in this segment drove a surge in revenue, although margins came in slightly lower at 3.7% compared to the expected 3.9%.

This volume increase has also spurred plans to expand capacity in the telecom segment, with discussions underway to onboard another global mobile brand. As Dixon scales up production, these higher volumes are likely to continue driving revenue growth and operational efficiencies.

Dixon Technologies is advancing backward integration with a Rs 2.5 bn investment in a display plant in Greater Noida, aiming to produce 2 million (m) mobile displays monthly and generate Rs 25 bn in revenue in the first year.

Output is expected to double in the second year, with plans to expand into auto displays and TV panels-potentially boosting margins from 3.8-4.0%.

Dixon is also exploring the EV sector, focusing on electronic modules and PCB assembly, and entering open-cell manufacturing. Its expansion into the industrial EMS sector is progressing, with talks underway with major semiconductor brands.

Dixon Technologies Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	47.3%	46.4%	65.9%	14.0%	45.2%
Operating Profit Margin (%)	5.29%	4.54%	3.62%	4.28%	4.10%
Net Profit Margin (%)	2.74%	2.47%	1.78%	2.09%	2.12%
Return on Capital Employed(%)	34.20%	32.83%	25.90%	27.98%	34.65%
Return on Equity (%)	26.41%	25.25%	22.20%	22.63%	25.47%

Source: Equitymaster

Between 2020-2024, the company has reported its steady financial performance, with a 5-year revenue CAGR of 42.5% and a profit CAGR of 42.7%. This growth translated into a strong RoCE and RoE, averaging 31.2% and 24.4% over five years.

To know more about the company, check out its financial fact sheet and quarterly results.

#3 Coforge

Following that, is Coforge.

Coforge, a prominent global digital services and business solutions provider, caters largely to Insurance, Travel, Government, and BFSI.

The company, leveraging its domain expertise, has expanded its footprint worldwide, serving clients both directly and through its subsidiaries and branches.

In Q2, Coforge posted impressive revenue growth, though margins slightly lagged expectations. Revenue growth was broad-based, driven by strength in Insurance (up 8.9% QoQ), Travel (6.2%), Government (6.7%), and BFS (5.2%).

The performance exceeded management's expectations, affirming three strategic priorities set at the start of FY24.

First, the Cigniti acquisition delivered strong revenue and synergy benefits, prompting an EBITDA margin target increase for Cigniti to 18% by Q4 from 16.5%.

Second, the company's organic growth has stayed robust, driven by broad-based demand across verticals.

Lastly, management's early call on a demand recovery has proven accurate, with recent quarters showing sustained growth momentum and expanding opportunities in key markets.

Coforge's long-term strategy targets US$ 2 bn in revenue by FY27, supported by a strong 40% YoY increase in its near-term order book and a 5.4% QoQ rise in organic headcount. Management also reaffirmed a 50bps expansion in adjusted EBITDA margin for FY25.

Coforge secured three major Q2 deals-one each in Continental Europe, America, and the UK-including two new clients and one expansion. The company is also advancing in AI and digital solutions to broaden its client base.

Coforge Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	14%	10.44%	38.09%	24.56%	14.41%
Operating Profit Margin (%)	18.91%	17.42%	17.94%	16.75%	16.22%
Net Profit Margin (%)	11.18%	9.99%	11.11%	9.30%	9.10%
Return on Capital Employed(%)	27.05%	24.92%	33.36%	31.71%	31.28%
Return on Equity (%)	21.05%	19.41%	28.09%	26.28%	25.40%

Source: Equitymaster

This growth builds on the company's financial performance between 2020-2024, during which Coforge reported a 5-year revenue CAGR of 19.5% and a profit CAGR of 14.5%. This translated into a robust average RoCE of 29.6% and RoE of 24.3%.

To know more about the company, check out its financial factsheet and latest financial results.

#4 GlaxoSmithKline Pharmaceuticals

Fourth on our list is GSK Pharmaceuticals.

As part of GlaxoSmithKline plc (GSK), the London-based pharmaceutical powerhouse formed through the 2000 merger of Glaxo Wellcome and SmithKline Beecham, Glaxo Pharma (GLXO) is focusing on growth in specialised healthcare.

Globally ranked as the sixth-largest pharmaceutical company, GSK focuses on innovations through Glaxo Pharma's portfolio in specialty drugs and vaccines.

In Q2FY25, Glaxo Pharma exceeded expectations, propelled by strong gains in specialty and pediatric vaccine segments, though challenges in the generic medicine segment tempered results.

Within specialty treatments, brands like Nucala and Trilegy have shown robust performance, and GLXO plans to broaden its specialty offerings. Further expansion includes the upcoming launch of ovarian and endometrial cancer treatments in 2HFY25.

Management expects momentum in pediatric vaccines to persist, noting a 13% YoY increase in the first half of FY25. Seasonal and monsoon delays are likely to lift general medicine growth in Q3FY25.

To expand adult vaccination, GLXO has also partnered with private clinics and hospitals, strengthening its reach in preventive healthcare.

GlaxoSmithKline Pharmaceuticals Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)	2.3%	-8.09%	10.46%	-0.04%	6.68%
Operating Profit Margin (%)	21.90%	22.68%	23.30%	27.83%	29.86%
Net Profit Margin (%)	2.77%	9.19%	10.59%	18.69%	17.08%
Return on Capital Employed(%)	15.76%	27.74%	37.72%	38.06%	46.49%
Return on Equity (%)	4.71%	17.42%	18.39%	27.58%	33.43%

Source: Equitymaster

Glaxo Pharma's financials reflect stable growth between 2020-2024, with a 5-year revenue CAGR of 2.5% and profit CAGR of 5.7%. This was accompanied by a healthy 5-year average RoCE and RoE of 33% and 20.3%.

To know more about the company, check out its financial factsheet and latest financial results.

#5 DOMS Industries

Last on our list is DOMS Industries.

DOMS, a leading player in India's stationery and art materials industry, offers a diverse range of high-quality products across categories like scholastic stationery, art materials, office supplies, and fine art products.

Its market dominance and brand recognition, built on quality and innovation, make it the go-to provider for consumers seeking reliable supplies.

In Q2, DOMS maintained strong growth despite a challenging demand environment. This was driven by capacity expansions in segments like writing instruments, kits, combos, and scholastic stationery.

The company's EBITDA margin of 18.8%, exceeded the 16-17% range, aided by a favourable revenue mix and lower commodity costs.

DOMS also expanded its distribution network by 10,000 retail stores, reaching over 135,000 stores, and continued expanding capacity in key product areas like mathematical instrument boxes and pioneer stationery.

DOMS Industries Financial Snapshot (2020-24)

	2019-2020	2020-2021	2021-2022	2022-2023	2023-2024
Revenue Growth (%)			67.87%	77.28%	27.19%
Operating Profit Margin (%)	0.00%	8.94%	10.58%	15.78%	18.40%
Net Profit Margin (%)	0.00%	-1.50%	2.51%	8.49%	10.39%
Return on Capital Employed(%)	0.00%	0.37%	10.35%	39.15%	33.87%
Return on Equity (%)	0.00%	-2.58%	7.13%	35.19%	27.72%

Source: Equitymaster

DOMS' strong financials highlight its consistent growth, with a 3-year revenue CAGR of 55.8%. During this time, the company has transformed its losses into profits, which have surged nearly tenfold over the past two years. Additionally, it boasts an average RoCE of 20.9% and an ROE of 16.9%.

Going forward, the company's goal is to enhance its income introducing new product range and expanding its distribution channels.

To know more about the company, check out its financial factsheet and latest financial results.

Conclusion

As we head into the second half of FY25, these stocks are well-positioned to capitalise on emerging opportunities.

With high-frequency data pointing to a recovery in the broader economy, these companies' proactive strategies and robust financials make them standout picks for investors looking to navigate a dynamic market landscape.

However, before diving in investors must keep a close eye on these companies. Study the operational performance, ability to scale, and the management's execution in an evolving landscape.

By staying informed and proactive, investors can seize potential upsides while managing risks.

Disclaimer: This article is for information purposes only. It is not a stock recommendation and should not be treated as such. Learn more about our recommendation services here...