Quarterly Earnings Trends and Market Cap Analysis

The latest quarter saw a marginal improvement in the proportion of companies reporting positive results compared to the previous quarter’s 40.0%, though it remains below the 44.0% recorded in March 2025. This suggests a persistent environment of earnings pressure amid macroeconomic uncertainties and sector-specific headwinds.

Breaking down by market capitalisation, mid-cap companies have demonstrated resilience, with half of them reporting positive earnings. This contrasts with large caps, where only 39.0% of firms beat or met expectations, and small caps at 42.0%. The mid-cap segment’s outperformance is indicative of nimble business models and sectoral tailwinds in select industries such as e-commerce and specialised manufacturing.

Sectoral Highlights and Top Performers

Among large caps, Tata Steel stood out as a top performer within the ferrous metals sector, benefiting from improved global steel demand and better realisations. The company’s earnings growth was a key contributor to the large-cap segment’s modest positive results.

In the mid-cap space, FSN E-Commerce emerged as a leader, capitalising on the sustained growth in digital retail and consumer adoption trends. Its strong revenue growth and margin expansion underpinned the sector’s positive earnings momentum.

Small caps saw Shaily Engineering from the plastic products industrial sector deliver impressive results, reflecting operational efficiencies and increased order inflows. Meanwhile, micro-cap stocks such as Shree Salasar (NBFC sector) and String Metaverse (paper, forest & jute products) also posted notable earnings, highlighting pockets of strength in niche segments.

Maxgrow India Ltd: A Case Study in Earnings Upside

Among the recent declarations, Maxgrow India Ltd reported a markedly positive quarter for September 2025. The company’s net sales surged to ₹5,304.87 crore, representing a staggering 236.4% growth compared to its previous four-quarter average. Profit before tax (excluding other income) rose by 217.7% to ₹94.53 crore, while net profit after tax matched this growth rate, also reaching ₹94.53 crore – the highest recorded in its history.

Maxgrow’s earnings per share (EPS) for the quarter stood at ₹23.67, signalling strong profitability and operational leverage. This performance has shifted the company’s market sentiment from bullish to mildly bullish as of 30 December 2025, reflecting investor confidence in its growth trajectory.

Aggregate Profit Growth and Earnings Quality

Despite the mixed results, aggregate profit growth across the board has shown pockets of strength, particularly in mid-cap and select small-cap companies. The overall earnings quality remains varied, with some sectors facing margin pressures due to rising input costs and inflationary trends, while others benefit from demand recovery and operational efficiencies.

Large caps continue to grapple with cyclical challenges, especially in commodity-linked sectors and capital-intensive industries. However, companies like Tata Steel have managed to improve profitability through cost optimisation and better pricing power.

Mid caps, buoyed by sectors such as e-commerce, specialised manufacturing, and financial services, have demonstrated improved earnings sustainability. This is reflected in the higher proportion of positive results and upward revisions in earnings estimates for several mid-cap stocks.

Upcoming Earnings to Watch

Investors should keep an eye on upcoming quarterly results from companies such as Jindal Poly Films Ltd, scheduled for 31 December 2025, Corona Remedies Ltd on 2 January 2026, and G M Breweries Ltd on 6 January 2026. These results will provide further clarity on sectoral trends and earnings momentum heading into the new calendar year.

Outlook and Investor Takeaways

The Q2 FY2026 earnings season underscores a cautious but selective optimism in the Indian equity markets. While the overall proportion of positive results remains below 50%, the mid-cap segment’s outperformance offers attractive opportunities for investors seeking growth amid volatility.

Large-cap investors should remain discerning, focusing on companies with strong balance sheets and pricing power to navigate inflationary pressures. Small and micro-cap investors may find compelling value in turnaround stories and niche sectors demonstrating sustainable profitability.

Market participants are advised to monitor earnings revisions closely and factor in sectoral dynamics when constructing portfolios. The evolving macroeconomic backdrop, including interest rate trends and global demand conditions, will continue to influence corporate earnings trajectories in the near term.

Summary

In summary, the September 2025 quarter earnings season presents a mixed but insightful landscape. Mid caps lead with a 50.0% positive result rate, while large caps and small caps trail at 39.0% and 42.0%, respectively. Noteworthy performers such as Tata Steel, FSN E-Commerce, and Shaily Engineering highlight sectoral strengths, while Maxgrow India’s exceptional quarter exemplifies the potential for significant earnings growth in select companies. Investors should adopt a balanced approach, leveraging detailed earnings analysis to capitalise on emerging opportunities.

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