Quarterly Earnings Overview and Trends

The December quarter saw a marked improvement in the proportion of companies reporting positive results, rising to 54.0% from 42.0% in the previous quarter and 40.0% in June 2025. This upward trajectory suggests that corporate earnings are stabilising after a period of subdued performance earlier in the year. The March 2025 quarter had a 44.0% positivity rate, indicating that the December quarter represents the strongest earnings season in the last four quarters.

Sectoral and market capitalisation analysis reveals a divergence in performance. Large-cap stocks lagged with only 35.0% reporting positive results, reflecting ongoing headwinds in heavyweight sectors. Conversely, mid-cap companies led the charge with 66.0% positive results, while small caps also showed resilience with 56.0% positivity. This pattern underscores a rotation of investor interest and earnings momentum towards mid-sized firms, which are often more agile and able to capitalise on niche growth opportunities.

Top Performers Across Market Caps

Among large caps, Hindustan Zinc stood out in the non-ferrous metals sector, delivering robust earnings that surpassed expectations. The company benefited from favourable commodity prices and operational efficiencies, which helped offset inflationary pressures. Its performance has been a bright spot in an otherwise cautious large-cap environment.

In the mid-cap segment, Bank of Maharashtra emerged as a top performer within the public sector banking space. The bank reported improved asset quality and higher net interest margins, contributing to a strong profit growth trajectory. This performance is particularly noteworthy given the sector’s ongoing challenges with credit costs and regulatory scrutiny.

Small-cap stocks also delivered standout results, with Indo Thai Securities in the capital markets sector leading the pack. Alongside Indo Thai Securities, Poonawalla Finance (NBFC sector) and Waaree Renewable Energy (power sector) posted impressive earnings growth, reflecting strong demand and operational leverage in their respective industries.

Detailed Case Study: Aurum Proptech Ltd’s Dec-2025 Performance

Aurum Proptech Ltd, a small-cap player in the software and consulting industry, declared its December quarter results with a notably positive financial performance. The company’s PAT surged by 137.5% compared to its previous four-quarter average, reaching ₹2.74 crores. Net sales rose sharply by 60.6% to ₹114.82 crores, marking the highest quarterly sales in its recent history.

Operating profit to interest coverage ratio improved to 3.50 times, the highest recorded, signalling enhanced operational efficiency and reduced financial risk. The company’s PBDIT also peaked at ₹28.04 crores, while EPS climbed to ₹0.43, the highest in the last four quarters. Aurum Proptech’s debt-equity ratio stood at a low 0.58 times, reflecting prudent capital management and a strong balance sheet.

This performance upgrade has shifted Aurum Proptech’s market stance from sideways to mildly bullish as of 16 January 2026, with its financial score improving from 9 to 17 over the past three months. Such a turnaround highlights the company’s ability to leverage growth opportunities in the software consulting space amid evolving market conditions.

Sectoral Insights and Earnings Quality

The earnings season also revealed sector-specific nuances. The non-banking financial companies (NBFCs) and capital markets sectors showed robust earnings growth, driven by increased credit demand and market activity. Power sector companies like Waaree Renewable Energy benefited from rising renewable energy adoption and government incentives, translating into strong profitability.

Public sector banks, while still facing asset quality challenges, showed signs of recovery with improved net interest margins and controlled provisioning. This was exemplified by Bank of Maharashtra’s strong quarterly results, which contributed to the mid-cap segment’s overall outperformance.

Large-cap companies, particularly in commodity-linked sectors, faced mixed outcomes. While Hindustan Zinc delivered solid results, other large-cap firms struggled with margin pressures and subdued demand, resulting in a lower proportion of positive earnings in this category.

Upcoming Earnings to Watch

Investors should keep an eye on the upcoming results from key companies such as Eternal Ltd, Dr Reddy’s Laboratories Ltd, and KEI Industries Ltd, all scheduled to announce on 21 January 2026. These companies operate in diverse sectors including pharmaceuticals and industrial manufacturing, and their earnings will provide further clarity on sectoral momentum heading into 2026.

Aggregate Profit Growth and Market Implications

The aggregate profit growth for the December quarter reflects a cautious but improving corporate earnings environment. The rise in positive results to 54.0% indicates that more companies are navigating inflationary pressures, supply chain disruptions, and geopolitical uncertainties with greater resilience. Mid-cap companies’ strong showing suggests that investors may find attractive opportunities in this segment, which combines growth potential with improving fundamentals.

However, the subdued performance among large caps signals that broader market leadership remains tentative, with heavyweight sectors yet to fully regain momentum. This mixed earnings landscape calls for selective stock picking and a focus on quality earnings growth, especially in sectors demonstrating structural tailwinds.

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