Quarterly Earnings Trends Show Gradual Improvement

The proportion of companies reporting positive results has steadily improved over the last four quarters, rising from 42.0% in June 2025 to 50.0% in March 2026. This incremental uptick suggests a cautious but tangible recovery in corporate profitability, despite ongoing macroeconomic challenges. The December 2025 quarter saw 46.0% positive results, while September 2025 was at 44.0%, indicating a slow but consistent improvement trajectory.

However, the distribution of positive results across market capitalisation segments reveals a stark contrast. Small caps have demonstrated robust earnings momentum with 63.0% reporting positive results, significantly outpacing mid caps at 34.0% and large caps at a modest 20.0%. This divergence highlights the resilience of smaller companies, often more agile and niche-focused, compared to their larger counterparts facing broader economic headwinds.

Sectoral Highlights and Standout Performers

Among large caps, ICICI Asset Management Company (AMC) emerged as a top performer within the capital markets sector, showcasing strong earnings resilience. Mid caps were led by HDB Financial Services, a non-banking financial company (NBFC), which delivered solid results reflecting steady credit demand and operational efficiency.

Small caps stole the spotlight with SG Finserve and Waaree Renewable Energy topping the charts. Both companies belong to the NBFC and power sectors respectively, underscoring the growth potential in financial services and renewable energy domains. SG Finserve, in particular, has demonstrated an outstanding financial performance for the quarter ended March 2026, with net sales surging by 94.88% to ₹105.41 crores and profit before tax (excluding other income) rising 80.11% to ₹55.96 crores.

SG Finserve’s Exceptional Quarterly Performance

SG Finserve’s March 2026 quarter results stand out for multiple record highs. Net sales reached ₹105.41 crores, marking a 94.88% year-on-year increase. Operating profit to net sales ratio hit an impressive 93.99%, reflecting operational leverage and cost control. Profit before tax (excluding other income) rose 80.11% to ₹55.96 crores, while profit after tax surged 77.7% to ₹42.27 crores, both highest ever recorded by the company.

Additionally, earnings per share (EPS) climbed to ₹6.48, and cash and cash equivalents at half-year stood at ₹204.11 crores, underscoring strong liquidity. The company’s mojo score improved from 29 to 32 over the past three months, signalling growing investor confidence. SG Finserve’s upgrade from mildly bullish to bullish on 10 April 2026 at ₹460 per share further reflects positive market sentiment.

Sectoral Patterns Reflect Varied Growth Dynamics

The NBFC sector continues to be a key driver of earnings growth, with both mid and small cap companies delivering strong results. HDB Financial Services’ performance in the mid cap space and SG Finserve’s in small caps highlight sustained credit demand and improving asset quality. Meanwhile, the power sector’s Waaree Renewable Energy also posted top results, benefiting from increased renewable energy adoption and government incentives.

Conversely, large caps have faced more muted earnings growth, with only 20.0% reporting positive results. This may be attributed to their exposure to cyclical sectors and global economic uncertainties. Investors are advised to monitor upcoming results from heavyweight banks such as ICICI Bank, HDFC Bank, and Yes Bank, all scheduled to report on 18 April 2026, which could provide further clarity on financial sector trends.

Aggregate Profit Growth and Market Implications

Overall, the aggregate profit growth for the quarter remains modest but encouraging. The 50.0% positivity rate among 42 companies indicates a stabilising earnings environment. Small caps’ outperformance suggests that investors seeking growth opportunities may find value in this segment, albeit with higher volatility. Mid caps offer a balanced risk-reward profile, while large caps require selective stock picking given their subdued earnings momentum.

Market participants should also consider the improving quality of earnings, as reflected in operational profit margins and cash flow metrics, particularly among NBFCs and renewable energy firms. The gradual improvement in mojo scores and bullish upgrades in select small caps signal pockets of strength that could drive sectoral rotations in the near term.

Looking Ahead: Key Results to Watch

The focus now shifts to the upcoming earnings announcements from major banks on 18 April 2026. These results will be critical in assessing the health of the financial sector and the broader economy. Given the mixed trends observed so far, investors should adopt a cautious but opportunistic stance, favouring companies with strong fundamentals, improving profitability, and robust cash flows.

In summary, the March 2026 quarter earnings season paints a nuanced picture of India’s corporate landscape. While challenges remain, especially for large caps, the resilience of small and mid caps, particularly in NBFC and renewable energy sectors, offers promising avenues for investors seeking growth amid evolving market conditions.

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