Quarterly Earnings Overview and Trends

The latest quarter saw 46.0% of companies reporting positive results, a slight uptick from 44.0% in September 2025 and 42.0% in June 2025, though still below the 47.0% recorded in March 2025. This incremental improvement suggests a tentative recovery in corporate earnings after a challenging year marked by inflationary pressures and global uncertainties.

Large-cap companies, often viewed as market bellwethers, posted a 43.0% positive result ratio, indicating that less than half of these heavyweight firms surpassed expectations or delivered growth. In contrast, mid-cap firms demonstrated resilience with 52.0% positive results, signalling stronger earnings momentum in this segment. Small caps recorded a 45.0% positive ratio, reflecting a mixed but slightly optimistic outlook among smaller enterprises.

Sectoral Highlights and Top Performers

Among large caps, Muthoot Finance stood out in the Non-Banking Financial Company (NBFC) sector, delivering robust earnings growth and reaffirming its position as a sector leader. The company’s performance was bolstered by sustained loan book expansion and controlled asset quality metrics, which helped it navigate the tightening interest rate environment effectively.

Mid-cap stocks witnessed notable strength from FSN E-Commerce, a key player in the E-Retail sector. The company reported strong revenue growth driven by increased consumer spending and improved logistics efficiencies, which translated into better-than-expected profitability. This performance underscores the ongoing digital transformation and rising penetration of e-commerce in India’s consumption landscape.

In the small-cap space, Cupid from the FMCG sector delivered impressive results, benefiting from strong volume growth and premiumisation trends. The company’s ability to maintain margin expansion despite input cost pressures highlights operational agility and brand strength.

Micro-Cap Stars and Recent Movers

Micro-cap stocks continue to surprise with standout performances. Jindal Poly Inve and Unifinz Capital, both NBFCs, alongside Trescon from the Realty sector, topped the charts with exceptional quarterly results. These companies demonstrated strong profit growth, driven by niche market positioning and effective cost management.

In the last 24 hours, Shraddha Prime Projects Ltd, a realty company with a market cap of ₹695.3 crores, reported an outstanding quarter. Its net sales surged by 81.1% compared to the previous four-quarter average, reaching ₹129.01 crores. Profit before tax (excluding other income) grew by 94.4% to ₹20.24 crores, while profit after tax rose 63.7% to ₹13.70 crores. The company also posted its highest-ever PBDIT and EPS at ₹20.17 crores and ₹3.39 respectively, reflecting strong operational execution and improving market conditions.

Aggregate Profit Growth and Earnings Quality

Across the board, aggregate profit growth has shown signs of improvement, albeit unevenly distributed. The mid-cap segment’s outperformance is largely attributable to sectors such as e-commerce, FMCG, and select NBFCs, which have capitalised on favourable demand dynamics and operational efficiencies. Large caps, while posting moderate growth, continue to face headwinds from cyclical sectors and global macroeconomic uncertainties.

Quality of earnings remains a key focus area. Companies like Shraddha Prime Projects Ltd have demonstrated not only top-line growth but also margin expansion and improved return ratios, signalling sustainable profitability. Conversely, some large-cap firms have reported earnings misses or flat growth, reflecting ongoing challenges in sectors such as commodities and industrials.

Upcoming Earnings to Watch

Investors should keep an eye on upcoming results from notable companies including ABB India Ltd and CIE Automotive India Ltd, both scheduled to report on 19 February 2026, as well as PVP Ventures Ltd on 23 February 2026. These companies operate in capital goods and automotive components sectors, which are sensitive to economic cycles and could provide further clarity on industrial demand trends.

Outlook and Market Implications

The December quarter earnings season suggests a cautiously optimistic outlook for Indian equities. The gradual improvement in positive result ratios and strong mid-cap earnings momentum provide a constructive backdrop for selective stock picking. However, the subdued performance among large caps and persistent sectoral headwinds warrant a discerning approach.

Investors may benefit from focusing on companies with robust earnings quality, sustainable growth drivers, and resilient balance sheets. The divergence in performance across market caps and sectors highlights the importance of granular analysis rather than broad market extrapolations.

Summary

In summary, the Dec-2025 quarterly results reflect a market in transition, with mid-caps leading the recovery while large caps face mixed fortunes. Sectoral leaders in NBFCs, e-commerce, and FMCG continue to drive earnings growth, supported by operational improvements and favourable demand conditions. Upcoming earnings releases will be critical in confirming the sustainability of these trends as investors navigate a complex macroeconomic environment.

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