Quarterly Earnings Overview and Trends

The latest results season saw 650 companies announce their December 2025 quarter earnings, marking a significant milestone in the ongoing financial year. The proportion of companies reporting positive results has improved to 50.0%, up from 43.0% in the September 2025 quarter and 44.0% in March 2025, indicating a gradual recovery in corporate profitability. This quarter’s positive result ratio also surpasses the 40.0% recorded in June 2025, reflecting a stabilising earnings environment.

However, the distribution of positive results varies markedly by market capitalisation. Large-cap companies reported a relatively subdued positive result rate of 37.0%, while mid-cap and small-cap firms both posted stronger performances with 52.0% positive results each. This divergence suggests that smaller companies are currently benefiting from more favourable operating conditions or are better positioned to capitalise on emerging market opportunities.

Sectoral and Market Cap Leaders

Among large caps, TVS Motor Co. stood out as a top performer in the automobile sector, demonstrating resilience amid challenging macroeconomic conditions. The company’s ability to sustain demand and manage costs effectively has contributed to its standout quarterly performance.

In the mid-cap space, GE Vernova T&D from the heavy electrical equipment sector delivered robust results, reflecting strong order inflows and execution capabilities. This performance underscores the ongoing infrastructure push and electrification trends supporting the sector.

Small caps also showcased notable performers, with Indo Thai Securities in the capital markets sector leading the pack. The company’s earnings growth highlights the buoyancy in financial services and increased market participation.

Micro-Cap Stars and Exceptional Performers

The micro-cap segment has produced some of the most impressive results this quarter. String Metaverse, operating in the paper, forest and jute products sector, emerged as the top overall result, signalling strong niche demand and operational efficiencies. Additionally, STEL Holdings, a non-banking financial company (NBFC), and Indo Thai Securities from the capital markets sector, also posted exceptional numbers, highlighting the potential for outsized returns in smaller, focused businesses.

STEL Holdings, in particular, has demonstrated outstanding financial performance for the December 2025 quarter. The company’s net sales surged to ₹17.20 crores, representing a remarkable 203.0% growth compared to its previous four-quarter average. Profit before tax (excluding other income) rose by 199.8% to ₹17.05 crores, while profit after tax increased by 194.8% to ₹12.58 crores. These figures are the highest recorded by the company in recent quarters, with earnings per share reaching ₹6.81. This strong performance has shifted STEL Holdings’ market stance from sideways to mildly bullish as of 29 January 2026, reflecting renewed investor confidence.

Aggregate Profit Growth and Market Implications

While individual company performances vary, the aggregate earnings landscape suggests a cautious optimism. The improvement in the proportion of positive results from 40-44% in previous quarters to 50% in December 2025 indicates a tentative recovery in corporate profitability. However, the relatively lower positive result rate among large caps at 37.0% points to ongoing challenges for established market leaders, possibly due to margin pressures, input cost inflation, or subdued demand in certain sectors.

Conversely, the stronger showing by mid and small caps may reflect their agility and exposure to high-growth segments. Investors may find opportunities in these segments, particularly in companies demonstrating consistent earnings upgrades and improving fundamentals.

Upcoming Earnings to Watch

Market participants will closely monitor the results of several heavyweight companies scheduled to announce their earnings imminently. These include Jindal Steel Ltd., Nestle India Ltd., and NTPC Ltd. on 30 January 2026. Their results will provide further clarity on sectoral trends and broader economic momentum heading into the new fiscal year.

Conclusion: Navigating a Mixed Earnings Landscape

The December 2025 quarter earnings season underscores a market in transition. While the overall improvement in positive results is encouraging, the disparity between large caps and smaller companies suggests selective opportunities rather than broad-based strength. Investors should focus on companies with demonstrable earnings growth, strong balance sheets, and sectoral tailwinds. Micro and small caps with niche leadership, such as STEL Holdings and Indo Thai Securities, offer compelling cases for further analysis and potential portfolio inclusion.

As the market awaits the upcoming results from major corporates, the current earnings season provides valuable insights into the evolving corporate earnings cycle and the sectors poised for growth in 2026.

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