Overall Results Trend and Market Sentiment

The proportion of companies reporting positive quarterly results has shown a gradual uptick over the past year, rising from 41.0% in June 2025 to 46.0% in December 2025. This incremental improvement suggests a tentative recovery in corporate earnings momentum, although the gains remain unevenly distributed. The March 2025 quarter had seen a slightly higher positivity rate of 47.0%, indicating some volatility in quarterly performance.

Market participants have noted that the earnings season is reflecting a cautious optimism, with companies navigating inflationary pressures, input cost volatility, and fluctuating demand conditions. The mixed results across market capitalisation tiers highlight the differentiated impact of these factors on various segments of the economy.

Market Capitalisation Breakdown: Mid Caps Outperform

Mid-cap companies have emerged as the standout performers this quarter, with 53.0% reporting positive results, a significant lead over large caps at 43.0% and small caps at 45.0%. This outperformance is indicative of mid-sized firms’ agility in adapting to market conditions and capitalising on niche growth opportunities.

Large caps, despite their scale and resource advantages, have faced headwinds from subdued demand in certain sectors and margin pressures. Small caps, while showing some resilience, continue to grapple with volatility and sector-specific challenges.

Sectoral Highlights and Top Performers

Among large caps, Muthoot Finance in the Non-Banking Financial Company (NBFC) sector delivered robust results, bolstering investor confidence in the financial services space. The company’s ability to sustain asset quality and expand its loan book amid tightening credit conditions was a key driver of its positive earnings surprise.

In the mid-cap universe, FSN E-Commerce stood out in the E-Retail sector, reporting strong revenue growth and margin expansion. The company’s strategic investments in technology and logistics have begun to yield tangible benefits, positioning it well for the evolving digital consumption landscape.

Among small caps, Ashiana Housing in the Realty sector posted encouraging numbers, reflecting a gradual revival in real estate demand and improved sales velocity. This trend is supported by easing interest rates and government incentives aimed at boosting housing affordability.

Micro Cap and Small Cap Leaders

The micro-cap segment witnessed notable performances from Jindal Poly Inve (NBFC sector) and Trescon (Realty sector), both delivering strong earnings growth and operational improvements. These companies have demonstrated resilience despite their smaller scale, benefiting from focused business models and cost efficiencies.

Additionally, Indo Thai Securities in the Capital Markets sector emerged as a top small-cap performer, reflecting increased market activity and improved brokerage revenues during the quarter.

Case Study: Schaeffler India Ltd’s Dec-2025 Quarter

Among recent declarations, Schaeffler India Ltd, a key player in Auto Components & Equipment, reported its highest-ever quarterly figures for December 2025. Net sales surged to ₹2,724.20 crores, while PBDIT reached ₹484.12 crores, marking a significant improvement over prior quarters.

The company’s profit before tax (excluding other income) stood at ₹390.49 crores, with net profit after tax rising 21.0% to ₹322.36 crores. Earnings per share (EPS) also hit a record ₹20.62, underscoring strong operational execution and demand recovery in the automotive sector.

Schaeffler India’s financial score improved markedly from 9 to 18 over the past three months, signalling enhanced market confidence and a positive outlook for the coming quarters.

Upcoming Earnings to Watch

Investors will closely monitor results from companies such as John Cockerill India Ltd and Vesuvius India Ltd on 26 February 2026, followed by Rain Industries Ltd on 27 February 2026. These announcements are expected to provide further clarity on sectoral trends and corporate earnings trajectories heading into the new fiscal year.

Sectoral Earnings Patterns and Outlook

The NBFC sector continues to show pockets of strength, with asset quality improvements and cautious credit growth supporting earnings stability. Meanwhile, the realty sector’s gradual recovery is gaining traction, aided by favourable policy measures and improving consumer sentiment.

Conversely, sectors such as auto components are benefiting from a rebound in vehicle production and exports, as evidenced by Schaeffler India’s performance. However, inflationary pressures and supply chain disruptions remain risks that could temper future earnings growth.

Overall, the earnings season reflects a landscape of selective opportunities, where companies with strong balance sheets, operational efficiencies, and market leadership are better positioned to capitalise on the evolving economic environment.

Investor Takeaways

For investors, the current earnings season underscores the importance of discerning stock selection based on market cap, sectoral dynamics, and company-specific fundamentals. Mid-cap stocks appear to offer attractive growth potential, while large caps provide relative stability amid volatility.

Monitoring upcoming results and sectoral updates will be crucial to refining portfolio strategies as the market navigates the interplay of macroeconomic factors and corporate performance in 2026.

Conclusion

The December 2025 quarter earnings season has delivered a mixed but cautiously optimistic picture across Indian equities. While mid-cap companies have outperformed with a higher proportion of positive results, large caps and small caps have shown more varied outcomes. Sectoral leaders in NBFC, e-commerce, and realty have driven much of the positive momentum, supported by improving demand and operational efficiencies.

As the market looks ahead, the ability of companies to manage cost pressures and capitalise on growth opportunities will be key determinants of sustained earnings improvement and investor confidence.

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