Overall Results Trend and Market Cap Analysis

The latest quarter saw 600 companies declare their results, with the proportion of positive earnings surprises climbing to 52.0%, up from 43.0% in September 2025 and 40.0% in June 2025. This upward trajectory suggests improving corporate earnings momentum as businesses adapt to evolving market dynamics and cost pressures.

Breaking down by market capitalisation, mid-cap and small-cap stocks outperformed their large-cap counterparts in terms of positive results. Mid-cap companies posted a 55.0% positive result ratio, while small caps closely followed at 54.0%. Large caps lagged behind with only 37.0% reporting positive earnings surprises. This divergence highlights the resilience and growth potential in the mid and small-cap segments, often driven by niche sectors and domestic demand.

Sectoral Highlights and Top Performers

Among large caps, TVS Motor Company stood out in the automobile sector, delivering robust earnings that surpassed expectations. The company’s ability to navigate supply chain constraints and rising input costs while maintaining volume growth was a key factor in its strong performance.

In the mid-cap space, GE Vernova T&D from the heavy electrical equipment sector impressed investors with solid order inflows and margin expansion, reflecting the ongoing infrastructure push and electrification trends in India.

Small caps also showcased notable performers such as Indo Thai Securities in the capital markets sector, which benefited from increased market activity and improved brokerage revenues during the quarter.

Exceptional Micro and Small Cap Performances

Micro-cap stocks delivered some of the most remarkable results this quarter. String Metaverse, operating in the paper, forest and jute products sector, emerged as the top overall performer, showcasing strong revenue growth and margin improvement. Similarly, STEL Holdings, a non-banking financial company (NBFC), demonstrated outstanding financial metrics, with net sales surging by 203.0% compared to the previous four-quarter average.

STEL Holdings reported its highest-ever quarterly figures with net sales at ₹17.20 crores, profit before tax (excluding other income) at ₹17.05 crores, and profit after tax at ₹12.58 crores. Earnings per share (EPS) also reached a peak of ₹6.81, reflecting a near tripling of profitability over recent quarters. This performance has propelled STEL Holdings’ score from 13 to 36 in the last three months, signalling a significant turnaround and strong operational execution.

Profit Growth and Earnings Quality

Aggregate profit growth across the 600 companies showed a positive trend, with many sectors reporting margin expansion despite inflationary pressures and rising interest rates. The financial services and capital markets sectors were particularly buoyant, supported by increased market volumes and credit demand. Conversely, certain commodity-linked sectors faced headwinds from input cost volatility and subdued global demand.

Quality of earnings also improved, with a majority of companies reporting higher operating profits and better cash flow generation. This suggests that the earnings growth is underpinned by sustainable business fundamentals rather than one-off gains or accounting adjustments.

Upcoming Results to Watch

Market participants are now turning their attention to key upcoming results scheduled for 30 January 2026, including heavyweight names such as Jindal Steel Ltd., Nestle India Ltd., and NTPC Ltd.. These companies are expected to provide further clarity on sectoral trends and corporate earnings momentum heading into the new fiscal year.

Market Implications and Investor Takeaways

The improving trend in quarterly earnings, particularly among mid and small caps, offers a cautiously optimistic outlook for investors. While large caps remain challenged by global uncertainties and margin pressures, the broader market’s earnings recovery is encouraging for portfolio diversification and risk-adjusted returns.

Investors should continue to monitor sectoral developments closely, favouring companies with strong balance sheets, pricing power, and growth visibility. The standout performers in the automobile, heavy electrical equipment, and capital markets sectors exemplify the types of businesses that are currently navigating the economic environment effectively.

Conclusion

The December 2025 quarter results season has underscored a gradual but meaningful improvement in corporate earnings across India’s equity markets. With over half of the companies reporting positive results and several mid and small caps delivering exceptional growth, the earnings landscape is becoming more favourable. However, selective stock picking remains essential as sectoral disparities persist and macroeconomic uncertainties linger.

Investors are advised to stay informed on upcoming earnings releases and maintain a balanced approach, leveraging insights from detailed financial analyses to capitalise on emerging opportunities.

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