Quarterly Earnings Trends and Positive Result Proportions

The December quarter marked a notable improvement in the share of companies reporting positive results, rising to 53.0% from 42.0% in September 2025 and 40.0% in June 2025. This upward trajectory suggests a gradual recovery in corporate profitability after a challenging first half of the fiscal year. The March 2025 quarter had seen 44.0% positive results, indicating that the latest quarter has surpassed recent trends.

However, this aggregate figure masks significant variation when analysed by market capitalisation. Mid-cap stocks led the charge with 60.0% delivering positive results, followed by small caps at 54.0%. Large caps lagged considerably, with only 35.0% reporting positive earnings surprises. This divergence highlights the relative resilience and growth potential of mid and small caps amid a complex macroeconomic environment.

Sectoral and Stock-Specific Highlights

Among large caps, Hindustan Zinc from the Non-Ferrous Metals sector stood out with robust earnings, benefiting from sustained commodity price support and operational efficiencies. The company’s performance underscores the ongoing strength in select metal producers despite global uncertainties.

In the mid-cap space, Persistent Systems, a key player in Computers - Software & Consulting, delivered strong results driven by steady revenue growth and margin expansion. This reflects the continued demand for IT services and digital transformation projects, which remain a bright spot in the economy.

Small caps also showcased impressive performers, with Indo Thai Securities in the Capital Markets sector emerging as a top result. The company’s earnings growth was supported by increased market activity and improved asset quality. Additionally, micro-cap Sera Investments and small-cap Poonawalla Finance, both in the Non-Banking Financial Company (NBFC) sector, reported strong profitability, highlighting the sector’s recovery and credit demand revival.

Outstanding Quarterly Performers: A Closer Look at Tatva Chintan Pharma Chem Ltd.

Among the 55 companies that declared results in the last 24 hours, Tatva Chintan Pharma Chem Ltd., a Specialty Chemicals company with a market cap of ₹3,047.98 crores, delivered an exceptional quarter. The company’s financial performance for December 2025 was marked by significant growth across key metrics:

• Profit Before Tax Less Other Income (PBT LESS OI) surged by 194.7% compared to the previous four-quarter average, reaching ₹15.93 crores.


• Profit After Tax (PAT) grew by an impressive 242.1%, hitting ₹15.17 crores, the highest in recent quarters.


• Net sales climbed 21.0% to ₹131.33 crores, also a record high for the company.


• Profit Before Depreciation, Interest and Taxes (PBDIT) reached ₹25.48 crores, the highest quarterly figure to date.


• The operating profit margin improved to 19.40%, reflecting efficient cost management and pricing power.


• Earnings per share (EPS) stood at ₹6.49, the highest quarterly EPS recorded by the company.

These results have prompted a mild bullish revision in the company’s outlook, with its score improving from 28 to 32 over the past three months. Tatva Chintan’s performance exemplifies the potential for specialty chemical firms to capitalise on demand recovery and operational leverage.

Market Capitalisation and Earnings Quality

The disparity in positive result proportions across market cap segments warrants further analysis. Large caps, despite their size and market influence, have struggled to deliver consistent earnings beats this quarter. This may be attributed to their exposure to cyclical sectors and global headwinds such as inflationary pressures and supply chain disruptions.

Conversely, mid caps have demonstrated robust earnings momentum, supported by sectors like IT, pharmaceuticals, and financial services. Their agility and growth orientation have allowed them to navigate challenges more effectively, resulting in a higher proportion of positive surprises.

Small caps, while more volatile, have also shown resilience with 54.0% positive results. The standout performers in this segment, particularly in NBFCs and capital markets, suggest a revival in credit demand and market activity, which bodes well for broader economic recovery.

Upcoming Earnings to Watch

Investors should keep an eye on key upcoming results scheduled for 23 January 2026, including Shriram Finance Ltd, Piramal Finance Ltd, and Bharat Petroleum Corporation Ltd. These companies represent critical sectors such as finance and energy, and their earnings will provide further clarity on sectoral trends and market sentiment heading into the new calendar year.

Implications for Investors and Market Outlook

The December quarter earnings season underscores a market in transition. While aggregate earnings growth is encouraging, the uneven distribution of positive results across market caps and sectors suggests selective stock picking remains essential. Mid-cap and small-cap stocks appear better positioned for near-term growth, supported by favourable sectoral dynamics and improving fundamentals.

Large caps, particularly those in commodity-linked sectors, may face continued volatility, necessitating cautious evaluation of earnings quality and forward guidance. The strong performance of specialty chemicals and NBFCs highlights pockets of opportunity for investors seeking growth and value.

Overall, the earnings season reinforces the importance of a diversified portfolio approach, balancing exposure across market capitalisation tiers and sectors to optimise risk-adjusted returns in 2026.

Summary

The December 2025 quarter results reveal a cautiously optimistic earnings environment with a 53.0% positive result ratio, led by mid-cap companies at 60.0%. Large caps lag at 35.0%, reflecting sectoral headwinds. Notable performers include Hindustan Zinc, Persistent Systems, and Indo Thai Securities, while Tatva Chintan Pharma Chem Ltd. delivered outstanding specialty chemicals sector results. Upcoming earnings from major finance and energy companies will be critical to watch. Investors should focus on selective opportunities amid a mixed but improving earnings landscape.

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