Quarterly Earnings Trend: A Clear Upward Trajectory

The latest results show a significant jump in the proportion of companies reporting positive earnings, rising to 67.0% in June 2026 from 53.0% in March 2026, 46.0% in December 2025, and 44.0% in September 2025. This steady improvement over the last four quarters highlights a broad-based recovery in corporate earnings, driven by improving demand conditions and operational efficiencies.

Large-cap companies led the charge with 74.0% delivering positive results, followed by small caps at 66.0% and mid caps at 62.0%. The dominance of large caps in positive earnings underscores the resilience of established market leaders amid ongoing macroeconomic challenges.

Sectoral Highlights: NBFCs Shine Across Market Caps

The Non-Banking Financial Company (NBFC) sector emerged as a standout performer across all market capitalisation categories. Jio Financial topped the large-cap segment with impressive earnings growth, while Poonawalla Fin led the mid-cap pack. SG Finserve distinguished itself among small caps, delivering strong profitability and operational metrics. Notably, F Mec International Finance, a micro-cap NBFC, recorded the best overall results, underscoring the sector’s broad strength and improving asset quality.

This sectoral outperformance reflects sustained credit demand and improving asset quality, which have bolstered profitability and investor confidence. The NBFC sector’s ability to navigate regulatory challenges and maintain healthy margins has been a key factor in its earnings resilience.

Large Cap Leaders: Jio Financial’s Robust Performance

Jio Financial, a key player in the NBFC space, delivered a strong quarter with significant profit growth, driven by expanding loan book and improving net interest margins. The company’s disciplined risk management and cost control measures contributed to a healthy rise in net profit, reinforcing its leadership position in the large-cap NBFC segment.

Mid and Small Cap Movers: Poonawalla Fin and SG Finserve

Poonawalla Fin’s mid-cap performance was characterised by a sharp increase in net profit and asset quality improvement, reflecting strong operational execution. Similarly, SG Finserve posted its highest quarterly profits, supported by a rise in operating profit to net sales ratio, signalling enhanced efficiency and margin expansion.

Micro Cap Spotlight: F Mec International Finance

Among micro caps, F Mec International Finance stood out with the top overall results, showcasing the potential for smaller NBFCs to deliver outsized earnings growth amid improving credit conditions. This performance highlights the opportunities in niche financial services companies that are capitalising on market gaps.

Garments & Apparels Sector: Sangam India’s Bullish Turn

Sangam (India) Ltd, a mid-sized player in the garments and apparels industry, reported a very positive quarter with a 92.9% growth in PAT at ₹42.25 crores, the highest in recent quarters. The company also recorded its highest PBDIT at ₹105.37 crores and an operating profit to net sales ratio of 12.25%, reflecting strong operational leverage. EPS surged to ₹8.16, while cash and cash equivalents rose to ₹65.80 crores, signalling robust liquidity. Despite a slight decline in its financial score from 28 to 24 over three months, Sangam India’s earnings trajectory remains bullish, supported by improving demand and cost efficiencies.

Upcoming Earnings to Watch

Investors will closely monitor the results of key companies scheduled to report on 20 July 2026, including UltraTech Cement Ltd, Authum Investment & Infrastructure Ltd, and Indian Overseas Bank. These results are expected to provide further clarity on sectoral trends and macroeconomic impact on corporate earnings.

Aggregate Profit Growth and Market Implications

The aggregate earnings growth reflected in this quarter’s results signals a broad-based recovery across sectors and market capitalisations. The improving trend in positive results from 44.0% in September 2025 to 67.0% in June 2026 indicates strengthening corporate fundamentals and a more favourable business environment. Large caps continue to lead, but mid and small caps are also showing encouraging signs of earnings acceleration.

Sectoral leadership by NBFCs suggests that financial services remain a key driver of market performance, supported by credit growth and improving asset quality. Meanwhile, select industrial and consumer sectors, exemplified by Sangam India in garments and apparels, are benefiting from demand revival and operational efficiencies.

For investors, these earnings trends highlight the importance of sectoral and market cap differentiation in portfolio construction. Large-cap NBFCs offer stability and steady growth, while mid and small caps present opportunities for higher earnings expansion, albeit with greater volatility.

Outlook and Strategic Considerations

As the earnings season progresses, market participants should focus on companies demonstrating consistent profit growth, margin expansion, and strong cash flow generation. The improving earnings backdrop supports a cautiously optimistic outlook for equity markets, with selective stock picking likely to yield superior returns.

Investors are advised to monitor upcoming results closely, particularly from sectors sensitive to economic cycles and interest rate movements. The resilience of NBFCs and pockets of strength in consumer discretionary sectors provide a balanced view of opportunities and risks in the current market environment.

Conclusion

The June 2026 quarterly earnings season has underscored a meaningful recovery in corporate profitability across market capitalisations and sectors. With 67.0% of companies reporting positive results, led by strong performances in the NBFC sector and select industrial players, the earnings momentum is gaining traction. This trend bodes well for market sentiment and offers investors a range of opportunities to capitalise on improving fundamentals and sectoral leadership.

Only Rs. 9,999 - Get MojoOne + Stock of the Week for 1 Year Start at 33% Off →