Quarterly Earnings Trends: A Gradual Upswing

The latest quarter saw 52.0% of companies reporting positive results, a significant increase from 42.0% in September 2025 and 40.0% in June 2025. This upward trajectory suggests that corporate India is gradually navigating through macroeconomic headwinds and operational challenges. The March 2025 quarter had a slightly higher positive result ratio at 44.0%, but the current quarter’s improvement is the most pronounced in the last year.

Profit growth has been uneven, with some sectors and market cap categories outperforming others. The aggregate profit growth is buoyed by strong performances in mid and small cap stocks, while large caps have shown more restrained earnings momentum.

Market Capitalisation Breakdown: Mid Caps Lead the Charge

Among the 359 stocks that declared results, mid cap companies stood out with a robust 62.0% positive result ratio, outperforming both small caps at 53.0% and large caps at 31.0%. This divergence highlights the resilience and growth potential of mid-sized firms, which often benefit from niche market positioning and operational agility.

Large caps, despite their size and market influence, lagged behind with only 31.0% reporting positive results. This may reflect the impact of global economic uncertainties and sector-specific challenges faced by heavyweight companies. Small caps, while better than large caps, showed a moderate 53.0% positive result ratio, indicating selective strength within this segment.

Sectoral Highlights: Metals, Gems, and Capital Markets Shine

Sectoral analysis reveals that certain industries have delivered standout performances. Hindustan Zinc, representing the non-ferrous metals sector, emerged as the top large cap performer, benefiting from favourable commodity prices and operational efficiencies. The gems, jewellery and watches sector was led by Bluestone Jewel, a mid cap stock that impressed with strong sales growth and margin expansion.

In the small cap space, Indo Thai Securities from the capital markets sector delivered exceptional results, reflecting increased market activity and improved brokerage revenues. Micro cap stocks also made headlines, with String Metaverse and Sera Investments posting remarkable earnings growth, underscoring the potential in niche and emerging sectors.

String Metaverse: A Micro Cap Star

Among the micro caps, String Metaverse Ltd. delivered an outstanding financial performance for the December 2025 quarter. The company reported net sales of ₹278.35 crores, reflecting a staggering 140.6% year-on-year growth. Profit before tax (excluding other income) surged by 184.16% to ₹27.45 crores, while net profit after tax rose 171.5% to ₹27.72 crores, both marking record highs for the company.

Operating profit margin also improved, with operating profit to net sales reaching 11.42%, the highest in the company’s history. Earnings per share (EPS) for the quarter stood at ₹2.38, underscoring strong profitability. Despite a slight downgrade in its mojo score from 40 to 39 over the past three months, String Metaverse’s financials remain robust, reflecting operational excellence in the paper, forest and jute products sector.

Top Performers Across Market Caps

In the large cap category, Hindustan Zinc continues to benefit from strong commodity cycles and cost optimisation, maintaining its position as a sectoral leader. Mid cap Bluestone Jewel’s performance was driven by sustained consumer demand and effective inventory management, while small cap Indo Thai Securities capitalised on heightened capital market activity to boost revenues and profitability.

Micro cap Sera Investments, operating in the non-banking financial company (NBFC) sector, also posted impressive results, reflecting improved asset quality and prudent risk management. These companies exemplify the pockets of strength within their respective segments, offering investors selective opportunities amid broader market volatility.

Upcoming Results to Watch

Investors will be closely monitoring the results of marquee companies scheduled to report shortly, including Kotak Mahindra Bank Ltd, UltraTech Cement Ltd, and JTL Industries Ltd, all slated for 24 January 2026. These results are expected to provide further clarity on sectoral trends and earnings momentum heading into the new fiscal year.

Sectoral and Market Implications

The December quarter results underscore a market environment where mid and small caps are driving earnings growth, while large caps face headwinds from global uncertainties and sector-specific pressures. The metals and capital markets sectors have emerged as bright spots, supported by favourable macroeconomic factors and operational improvements.

However, the relatively modest positive result ratio among large caps suggests caution for investors seeking stability and defensive plays. The divergence in earnings performance highlights the importance of selective stock picking and sectoral allocation in portfolios.

Conclusion: Earnings Season Reflects Gradual Recovery with Selective Strength

The December 2025 quarterly earnings season paints a picture of gradual recovery and selective strength across the Indian equity market. With over half of the companies reporting positive results, led by mid and small caps, the corporate sector appears to be regaining momentum after a challenging year.

Investors should remain vigilant, focusing on companies with strong fundamentals, sector tailwinds, and proven operational resilience. The upcoming results from key large caps will be critical in shaping market sentiment and guiding investment strategies for the months ahead.

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