Overall Earnings Landscape and Trends

The latest quarter saw 47.0% of companies reporting positive results, up from 44.0% in September 2025 and 42.0% in June 2025, indicating a gradual recovery in earnings momentum. This marks a return to the same level of positive results as the March 2025 quarter, suggesting some stabilisation after a period of earnings pressure. The aggregate trend points to cautious optimism among corporates, with pockets of strong performance offset by ongoing challenges in certain sectors.

Market capitalisation-wise, mid caps led the pack with 53.0% positive results, outperforming both small caps at 47.0% and large caps at 42.0%. This outperformance by mid caps may reflect their greater agility and exposure to growth segments, while large caps continue to face headwinds from global macroeconomic uncertainties and sector-specific slowdowns.

Large Cap Highlights: Automobiles Lead with TVS Motor

Among large caps, the standout performer was TVS Motor Company in the automobile sector. The company delivered robust earnings growth, benefiting from strong domestic demand and improved operational efficiencies. Despite a challenging environment for the auto industry globally, TVS Motor’s ability to sustain margin expansion and volume growth has been a key positive.

However, the overall large cap segment showed a more cautious tone, with only 42.0% of companies reporting positive results. This reflects the mixed impact of inflationary pressures, supply chain disruptions and subdued export demand on heavyweight constituents.

Mid Cap Momentum: FSN E-Commerce Shines

Mid caps continued to impress with a 53.0% positive result ratio, led by FSN E-Commerce in the e-retail sector. FSN’s earnings beat expectations, driven by expanding market share, higher gross merchandise value (GMV) and improved cost controls. The company’s strategic investments in technology and logistics have started to pay off, positioning it well for sustained growth.

This sectoral strength in e-commerce contrasts with more muted performances in traditional retail and discretionary segments, highlighting the ongoing structural shift in consumer behaviour.

Small and Micro Cap Performers: Realty and NBFCs in Focus

Small caps reported 47.0% positive results, with Mahindra Life in realty emerging as a top performer. The company posted strong revenue growth and margin improvement, supported by healthy demand in residential projects and favourable pricing trends. Similarly, micro caps such as Trescon (realty), Indo Thai Securities (capital markets) and Unifinz Capital (NBFC) delivered standout results, underscoring pockets of resilience in niche sectors.

These smaller companies often benefit from focused business models and local market expertise, enabling them to capitalise on sectoral upswings more rapidly than larger peers.

Notable Quarterly Performances: Ashiana Housing’s Exceptional Growth

Among recent declarations, Ashiana Housing Ltd, a mid-sized player in the realty sector with a market cap of ₹3,472.63 crores, reported an outstanding quarter ending December 2025. The company’s net sales surged by 171.7% to ₹361.86 crores, while profit before tax excluding other income (PBT less OI) soared by 389.0% to ₹64.55 crores. Net profit (PAT) also expanded impressively by 289.9% to ₹56.65 crores.

These figures represent the highest quarterly levels recorded by Ashiana Housing, with operating profit margins reaching a peak of 18.88%. Earnings per share (EPS) stood at ₹5.64, marking a significant improvement over prior quarters. Despite a slight downgrade in its sentiment score from 38 to 37 over the past three months, the company’s financial performance remains robust and indicative of strong operational execution.

Sectoral Patterns and Earnings Quality

The realty sector continues to show pockets of strength, particularly among mid and small caps, as evidenced by Ashiana Housing and Mahindra Life. This is supported by improving demand fundamentals and easing input cost pressures. Conversely, capital markets and NBFC sectors have delivered mixed results, with some micro caps like Indo Thai Securities and Unifinz Capital outperforming due to niche positioning and prudent risk management.

Meanwhile, the automobile sector’s recovery is uneven, with companies like TVS Motor leading the charge while others grapple with supply chain constraints and subdued export orders. The e-commerce sector remains a bright spot, with FSN E-Commerce’s strong showing highlighting the ongoing digital transformation in retail.

Upcoming Earnings to Watch

Investors will be closely monitoring results from heavyweight companies scheduled to report shortly, including Hindustan Unilever Ltd, Indian Hotels Co Ltd, and Oil & Natural Gas Corporation Ltd on 12 February 2026. These results will provide further clarity on consumer demand, hospitality recovery and energy sector dynamics amid evolving macroeconomic conditions.

Implications for Investors

The December quarter earnings season underscores the importance of selective stock picking, with mid caps offering relatively better earnings visibility and growth prospects. Large caps remain vulnerable to external headwinds, while small and micro caps present opportunities in specialised sectors such as realty and NBFCs.

Investors should weigh the improving earnings trend against persistent risks including inflationary pressures, geopolitical uncertainties and sector-specific challenges. Companies demonstrating strong margin expansion, revenue growth and operational resilience are likely to outperform in the near term.

Conclusion

The Dec-2025 quarterly results reveal a cautiously optimistic earnings environment with a gradual uptick in positive outcomes across market caps. Mid caps continue to lead on profitability, supported by structural growth sectors like e-commerce and realty. Large caps face a mixed outlook, while small and micro caps offer pockets of compelling performance. As the earnings season progresses, discerning investors will benefit from focusing on quality companies with sustainable growth and margin improvement.

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