Quarterly Earnings Trends and Aggregate Profit Growth

The latest quarter saw 46.0% of companies reporting positive results, a modest improvement from 44.0% in September 2025 and 42.0% in June 2025, though slightly below the 47.0% recorded in March 2025. This oscillation suggests a cautious recovery trajectory amid persistent macroeconomic headwinds and sector-specific challenges.

Aggregate profit growth remains uneven, with many companies delivering flat or marginally improved earnings compared to the previous quarter. The overall market environment continues to reflect a balance between cost pressures, demand fluctuations, and evolving consumer behaviour.

Market Capitalisation Breakdown: Mid Caps Lead Positive Surprises

Analysing results by market capitalisation reveals that mid-cap stocks outperformed their large- and small-cap counterparts in terms of positive earnings outcomes. Mid caps posted a 52.0% positive result ratio, significantly higher than large caps at 43.0% and small caps at 45.0%. This suggests that mid-sized companies are currently better positioned to capitalise on growth opportunities and operational efficiencies.

Large caps, often seen as market bellwethers, showed a more cautious earnings environment, with many reporting flat or slightly deteriorated financials. Small caps, while showing pockets of strength, remain vulnerable to volatility and sectoral headwinds.

Sectoral Highlights: NBFCs and E-Commerce Shine

Among the top performers, Non-Banking Financial Companies (NBFCs) stood out prominently. Muthoot Finance, a large-cap NBFC, delivered one of the strongest results in its sector, reflecting robust loan growth and stable asset quality. Similarly, Jindal Poly Inve, a micro-cap NBFC, topped the overall results chart, underscoring the resilience of select financial services players despite broader economic uncertainties.

The e-commerce sector also demonstrated notable strength, with FSN E-Commerce, a mid-cap player, reporting impressive growth metrics driven by expanding consumer adoption and improved logistics efficiencies. This sector’s performance highlights the ongoing digital transformation and shifting retail paradigms in India.

Small Cap and Micro Cap Movers

Within the small-cap universe, Cupid from the FMCG sector emerged as a top result, benefiting from steady demand in consumer staples and effective cost management. Micro-cap companies such as Trescon in realty and Indo Thai Securities in capital markets also posted strong earnings, reflecting niche market leadership and strategic positioning.

Recent Large Cap Result: ABB India Ltd

Among the latest large-cap results, ABB India Ltd, a heavyweight in the heavy electrical equipment industry with a market cap of ₹1,21,119.41 crores, reported a flat financial performance for the December 2025 quarter. The company’s net sales reached a quarterly high of ₹3,557.01 crores, yet the overall score deteriorated slightly from -2 to -3 over the past three months, signalling mild bearish sentiment. ABB’s share price moved to ₹5,715.65 on 19 February 2026, reflecting cautious investor outlook amid stagnant earnings growth.

Upcoming Earnings to Watch

Investors should keep an eye on the forthcoming results from RRP Defense Ltd, scheduled for 20 February 2026, followed by BF Utilities Ltd and PVP Ventures Ltd, both expected to report on 23 February 2026. These companies operate in sectors that have shown mixed earnings momentum, and their results could provide further clarity on sectoral trends heading into the new fiscal year.

Sectoral Divergence and Investor Implications

The December quarter earnings season underscores a clear divergence across sectors and market capitalisations. While mid caps and select NBFCs and e-commerce companies are demonstrating growth and operational resilience, large caps and certain small caps face headwinds from subdued demand and margin pressures.

For investors, this environment calls for a discerning approach, favouring companies with strong balance sheets, sustainable growth drivers, and sectoral tailwinds. The mixed earnings landscape also emphasises the importance of diversification and active portfolio management to navigate volatility and capitalise on emerging opportunities.

Outlook and Strategic Considerations

Looking ahead, the earnings trajectory will likely be influenced by macroeconomic factors such as inflation trends, interest rate movements, and global trade dynamics. Companies that can innovate, control costs, and adapt to changing consumer preferences are expected to outperform.

Investors should monitor quarterly updates closely, particularly in sectors like financial services, technology, and consumer goods, where earnings momentum is building. Meanwhile, caution is warranted in capital-intensive and cyclical industries until clearer signs of recovery emerge.

Summary

The December 2025 quarter results season paints a picture of cautious optimism. With 46.0% of companies reporting positive earnings, a slight improvement over recent quarters, the market is gradually stabilising. Mid caps lead the charge with a 52.0% positive result ratio, while large caps and small caps lag behind. Sectoral leaders include NBFCs, e-commerce, and select FMCG and realty players, highlighting pockets of strength amid broader challenges.

Investors are advised to focus on quality companies with clear growth trajectories and robust financials, while remaining vigilant to evolving market conditions and sector-specific risks.

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