Returns trump valuations for these stocks

A rising P/E typically reflects optimism about a company's growth prospects and can amplify share-price gains

- Mayur Bhalerao

In a market wary of stretched valuations, a cohort of Indian stocks have delivered over 30% returns despite falling P/E ratios—a rare show of strength grounded in earnings alone.

A Mint analysis of 3,700 BSE-listed companies finds that 212 stocks have delivered over 30% returns in the past year even as their price-to-earnings (P/E) ratios declined. This rare divergence suggests a shift in investor focus—from re-rating-driven gains to core earnings performance.

The list spans four large-cap and nine mid-cap stocks, but is dominated by small caps. Their outperformance is anchored in fundamentals, with 72% reporting healthy core earnings and strong growth in earnings per share (EPS), excluding exceptional items.