Quarterly Results Overview and Positive Trends

Of the 1,468 stocks that declared results for the December 2025 quarter, 47.0% reported positive earnings surprises, marking an improvement from 42.0% in September 2025 and 40.0% in June 2025. This uptick suggests a gradual recovery in corporate earnings momentum after a subdued first half of the fiscal year. The March 2025 quarter had seen 45.0% positive results, indicating that the latest quarter has marginally surpassed that benchmark.

Market capitalisation-wise, mid-cap stocks led the charge with 54.0% delivering positive results, outperforming both small caps at 47.0% and large caps at 37.0%. This divergence underscores the growing strength and resilience of mid-sized companies amid ongoing economic uncertainties and sectoral shifts.

Large Cap Performance: Select Winners Amidst Caution

Within the large-cap universe, the automobile sector stood out, with TVS Motor Company delivering one of the top results. Despite a cautious environment for large caps overall, TVS Motor Co. demonstrated robust operational metrics, reflecting sustained demand and efficient cost management. However, the broader large-cap segment lagged behind mid and small caps in terms of positive earnings beats, with only 37.0% of companies surpassing expectations.

This relative underperformance may be attributed to the scale and complexity of large-cap businesses, which often face greater exposure to global supply chain disruptions and inflationary pressures. Investors remain watchful for upcoming results from heavyweight names such as State Bank of India and General Insurance Corporation of India, scheduled for 07 Feb 2026, which could influence large-cap sentiment further.

Mid Cap Stocks: The Earnings Powerhouse

Mid-cap companies have emerged as the standout performers this quarter, with 54.0% reporting positive earnings surprises. FSN E-Commerce Ventures Ltd., a key player in the e-retail sector, exemplifies this trend with an outstanding financial performance for December 2025. The company’s operating profit to interest ratio reached a peak of 7.88 times, while profit before tax (PBT) excluding other income soared by 214.2% compared to the previous four-quarter average.

FSN E-Commerce’s net sales hit a record ₹2,873.26 crores, growing 30.2% over the prior four-quarter average, supported by a robust operating profit margin of 8.00%. The company’s profit after tax (PAT) also surged 180.3% to ₹73.42 crores, with earnings per share (EPS) reaching a high of ₹0.22. These metrics underscore the company’s operational efficiency and strong market positioning in a competitive e-commerce landscape.

Other mid-cap names have similarly benefited from sectoral tailwinds, particularly in technology, consumer discretionary, and specialised manufacturing, driving aggregate profit growth and investor interest.

Small and Micro Caps: Mixed Outcomes with Bright Spots

Small-cap stocks reported a 47.0% positive result rate, aligning with the overall market average. Cupid, operating in the FMCG sector, was among the top performers in this category, showcasing resilience in consumer demand and effective cost control. Meanwhile, micro-cap stocks delivered some of the most remarkable individual results, with Trescon in realty and String Metaverse in paper, forest, and jute products sectors posting exceptional earnings growth.

These micro-cap successes highlight pockets of opportunity in niche sectors, although investors should remain cautious given the higher volatility and risk associated with smaller companies.

Sectoral Patterns and Profit Growth Analysis

The December quarter results reveal distinct sectoral patterns. Consumer-facing sectors such as FMCG and e-commerce have demonstrated robust growth, driven by sustained consumer spending and digital adoption. The automobile sector, despite global supply chain challenges, showed pockets of strength, particularly among companies with diversified product portfolios and export capabilities.

Conversely, capital-intensive sectors and those exposed to commodity price fluctuations faced margin pressures, tempering overall earnings growth. The aggregate profit growth across the 1,468 companies suggests a cautious but improving corporate earnings environment, with mid caps spearheading the recovery.

Outlook and Upcoming Results

As the earnings season progresses, market participants will closely monitor results from major financial institutions such as State Bank of India and General Insurance Corporation of India, both scheduled to report on 07 Feb 2026. Their performance will be critical in shaping large-cap sentiment and broader market direction.

Investors are advised to focus on companies demonstrating consistent operational improvements, strong cash flow generation, and sectoral tailwinds. The evolving earnings landscape suggests selective opportunities, particularly in mid-cap and niche sectors, while caution remains warranted in large-cap and commodity-exposed segments.

Summary

The December 2025 quarterly earnings season paints a picture of gradual recovery and selective strength. With 47.0% of companies beating expectations, up from 42.0% in the previous quarter, and mid caps leading with a 54.0% positive result rate, the market is witnessing a shift towards more balanced growth. Sectoral leaders such as FSN E-Commerce and TVS Motor Co. exemplify the potential for earnings expansion amid ongoing economic challenges. Investors should remain vigilant, leveraging detailed financial analysis to navigate the mixed but improving earnings environment.