Quarterly Results Overview and Trends

As of 8 February 2026, a total of 1,744 companies have declared their results for the December 2025 quarter. The proportion of firms reporting positive earnings growth has improved slightly to 46.0%, up from 42.0% in the September 2025 quarter and 40.0% in June 2025. This marks a mild recovery from the subdued performance seen earlier in the year, though it remains below the 45.0% positive result rate recorded in March 2025.

This gradual improvement suggests that while headwinds persist, certain sectors and companies are beginning to adapt to the evolving market conditions, driving incremental profit growth and operational efficiencies.

Market Capitalisation Breakdown

Analysing results by market capitalisation reveals a divergence in performance. Mid-cap companies have led the charge with 52.0% reporting positive earnings, outperforming both small caps at 46.0% and large caps at 38.0%. This trend highlights the resilience and growth potential of mid-sized firms, which often benefit from greater agility and niche market positioning compared to their larger counterparts.

Large-cap companies, despite their scale and resources, have faced more pronounced challenges, with only 38.0% delivering positive results. This may reflect exposure to global supply chain disruptions, inflationary pressures, and cautious consumer demand impacting heavyweight sectors such as automobiles and pharmaceuticals.

Sectoral and Company Highlights

Among large caps, TVS Motor Co. stood out with robust earnings in the automobile sector, demonstrating resilience amid a challenging environment for vehicle manufacturers. The company’s ability to sustain sales growth and manage costs effectively contributed to its strong quarterly performance.

In the mid-cap space, FSN E-Commerce delivered impressive results within the e-retail sector, benefiting from sustained consumer demand and expanding digital penetration. The company’s strategic investments in logistics and technology have begun to yield tangible returns, underpinning its earnings growth.

Small caps also showcased notable performers, with Cupid in the FMCG sector reporting solid profit gains, driven by product innovation and expanding distribution networks. This highlights the continued appetite for consumer staples despite macroeconomic uncertainties.

Top Performers Across Market Caps

Micro-cap companies have been particularly noteworthy this quarter. String Metaverse, operating in the paper, forest, and jute products sector, and Trescon from the realty sector, both posted standout results, reflecting niche market opportunities and effective cost management. Cupid’s strong showing in the small-cap FMCG segment further underscores the diversity of growth pockets within the broader market.

Recent Results Spotlight: HBL Engineering Ltd.

Among the 82 companies reporting in the last 24 hours, HBL Engineering Ltd. has delivered an outstanding financial performance for the December 2025 quarter. The company, operating in the auto components and equipment industry, reported net sales of ₹874.04 crores, marking a 27.1% growth compared to its previous four-quarter average.

Profit before tax (excluding other income) surged by 36.1% to ₹287.52 crores, while profit after tax rose 33.9% to ₹221.31 crores. Despite a recent decline in its momentum score from 38 to 30 over the past three months, HBL Engineering’s operational metrics remain robust, reflecting strong demand and efficient cost controls.

Upcoming Earnings to Watch

Market participants will be closely monitoring the upcoming results from several heavyweight companies scheduled for 9 February 2026. These include Zydus Lifesciences Ltd, Linde India Ltd., and Aurobindo Pharma Ltd. Their performances will provide further clarity on sectoral trends, particularly in pharmaceuticals and industrial gases, which have been under pressure due to regulatory and input cost challenges.

Aggregate Profit Growth and Market Implications

The aggregate profit growth across the declared results indicates a cautiously optimistic outlook. While the overall positive result ratio remains below 50%, the steady improvement over the last four quarters suggests that companies are gradually navigating inflationary pressures, supply chain constraints, and fluctuating demand.

Investors should note the divergence between market caps and sectors, with mid-cap firms and select small caps offering pockets of growth potential. Large caps, while facing headwinds, continue to be critical bellwethers for the broader economy and may present value opportunities if they can stabilise earnings in coming quarters.

Sectoral analysis points to automobiles, e-commerce, and FMCG as key drivers of earnings momentum, supported by consumer resilience and technological adoption. Conversely, sectors such as realty and paper products have shown mixed results, with micro-cap companies in these areas demonstrating selective strength.

Strategic Takeaways for Investors

Given the mixed earnings landscape, investors are advised to adopt a selective approach, focusing on companies with strong fundamentals, clear growth trajectories, and demonstrated operational agility. Mid-cap stocks with improving momentum and niche market leadership appear particularly attractive in the current environment.

Monitoring upcoming earnings announcements will be crucial to gauge whether the positive trend sustains or if macroeconomic challenges intensify. Diversification across sectors and market caps remains a prudent strategy to balance risk and reward amid ongoing market volatility.

Conclusion

The December 2025 quarterly earnings season paints a complex but cautiously hopeful picture. While less than half of companies have reported positive results, the improving trend and standout performances in mid and small caps provide a foundation for optimism. Investors should remain vigilant, leveraging detailed financial analysis and market intelligence to navigate the evolving landscape effectively.

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