Best performing Sectors and Themes as of September 2026
We normally take a sector performance view based on returns or based on outperformance compared to the index.
UNDERSTANDING THE PERFORMANCE OF SECTORS / THEMES
We normally take a sector performance view based on returns or based on outperformance compared to the index. Here we have considered a combination of 19 sector and themes and have also juxtaposed the Nifty 50 as one of the sectors to get a comparative perspective. It shows how sectors / themes compare with Nifty Returns.
Also, we look at a more comprehensive combined rank score; which incorporates monthly returns, yearly returns, bounce, and swing in one measure. This offers a 360-degree view of sectoral performers. The table below looks at the sectoral and thematic performance through a combined rank on 4 parameters.
| Sectors and Themes vs Nifty-50 | One-Month Return (%) | One-Year Return (%) | Bounce From Low (%) | Distance To Peak (%) | Combined Rank Score |
|---|---|---|---|---|---|
| PHARMA | 1.65% | 22.87% | 27.67% | 0.92% | 2.50 |
| IPO INDEX | 1.33% | 11.06% | 37.16% | 2.24% | 3.25 |
| METALS SECTOR | -2.13% | 29.80% | 31.29% | 6.06% | 3.25 |
| HEALTHCARE | 0.49% | 15.40% | 23.21% | 1.55% | 4.25 |
| INDIA DEFENCE | -3.70% | 15.58% | 30.85% | 6.61% | 6.25 |
| CAPITAL MARKETS | -4.53% | 24.64% | 25.23% | 7.69% | 7.50 |
| PRIVATE BANKS | -2.06% | 0.36% | 12.21% | 9.63% | 9.50 |
| ENERGY SECTOR | -2.27% | 6.20% | 13.83% | 10.49% | 9.50 |
| CONGLOMERATE 50 | -5.87% | 1.62% | 19.16% | 7.16% | 10.25 |
| HOUSING SECTOR | -4.16% | -0.63% | 10.96% | 6.12% | 11.00 |
| REAL ESTATE | -5.28% | -0.75% | 36.12% | 10.79% | 11.00 |
| CONSUMER DURABLES | -6.25% | -0.19% | 17.46% | 6.56% | 11.25 |
| PSU BANKS | -3.59% | 12.19% | 10.82% | 16.37% | 11.25 |
| AUTOMOBILES | -7.70% | 0.78% | 14.46% | 9.70% | 12.75 |
| OIL & GAS | -3.15% | -3.13% | 2.66% | 12.72% | 13.75 |
| WAVES (MEDIA) | -4.06% | -14.45% | 17.90% | 33.18% | 14.00 |
| NIFTY-50 | -4.91% | -7.03% | 4.32% | 12.26% | 15.25 |
| FMCG SECTOR | -3.70% | -16.63% | 2.49% | 20.03% | 15.75 |
| INFOTECH (IT) | -8.48% | -18.49% | 9.58% | 30.12% | 18.25 |
| INDIA RAILWAYS PSU | -6.52% | -24.60% | 1.30% | 34.20% | 19.50 |
Data Source: NSE / BSE
HOW SECTORS AND THEMES COMPARE WITH NIFTY
- Out of the 19 sectors and themes taken into consideration, 16 did better than the Nifty on combined score. Most of the pressure on Nifty came from IT and FMCG.
- Firstly, the 20 sectors / themes (including Nifty) were ranked on each of the above 4 parameters, and then a combined rank score was taken as an average of ranks.
- While 1-month returns and swing are momentum measures; the 1-year returns and bounce from lows are more structural and long-term measures of performance.
OUR READING FROM SECTORAL / THEMATIC SHOW IN SEPTEMBER 2026
A total of 16 out of the 19 themes and sectors evaluated beat the Nifty in combined rank with only 3 sectors doing worse than the Nifty-50 in terms of the combined rank.
- Pharma and IT were the best and worst performers on 1-month returns; while metals and Railway Stocks were the best and worst performers on 1-year returns.
- IPOs and Railway Stocks were the best and worst performers on Bounce; while Pharma and Railway Stocks were the best and worst performers on Swing. Here Bounce refers to the bounce from yearly lows, and Swing is distance to yearly highs.
- Pharma and Healthcare emerged in the First and Fourth position. Pharma is not just a defensive buy, but also a play on billions of dollars of drugs going off patents. Clearly, returns have gravitated more towards formulations and APIs than towards hospitals.
- Nifty IPO index at second position on combined rank has gained largely from FPIs shifting their equity positions from the secondary markets to primary markets. Also, IPO pricing in this year has moderated compared to the previous two years.
- Metals, Defence and Capital Markets also ranked high in September rankings at third, fifth, and sixth position respectively. While metals have gained from global shortages and strong LME prices; Defence is gaining from massive order farmouts. In the case of capital markets, it is about ROI for intermediaries bettering ROI for investors.
- IT and FMCG continued to be under pressure, performing worse than the Nifty on combined rank. In the case of IT, the temporary sell-AI trade seems to be reversing. For FMCG, there are concerns over rural demand this year and a spike in input costs.
- The worst performers for the month were companies catering to the Indian Railways. The earnings of Indian Railways have been flat, not keeping pace with the spending. That has limited its ability to farm out orders. A lot of the 2024 froth is also going out.
It has been an interesting month for sectoral plays. While healthcare, metals, and defence were expected to be at the top; IPOs seems to be the surprise candidate.
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