Quarterly Earnings Overview and Positive Result Trends

The latest quarter saw 54.0% of companies reporting positive results, marking a significant rise compared to the preceding quarters—42.0% in September 2025, 40.0% in June 2025, and 44.0% in March 2025. This upward trajectory suggests an improving earnings environment as the economy navigates ongoing macroeconomic challenges. The December quarter’s improvement is particularly encouraging given the subdued sentiment in earlier quarters.

However, this aggregate figure masks considerable divergence when analysed by market capitalisation. Large-cap stocks reported only 29.0% positive results, a subdued figure that highlights persistent headwinds for the biggest companies. In contrast, mid-cap stocks delivered a robust 67.0% positive result rate, while small caps also outperformed large caps with 55.0% positive outcomes. This pattern underscores a rotation in earnings leadership towards smaller and mid-sized firms, which may be benefiting from niche market opportunities and more agile business models.

Sectoral and Company-Specific Highlights

Among large caps, Tech Mahindra stood out in the Computers - Software & Consulting sector, delivering strong earnings that contributed positively to the sector’s overall performance. The technology sector’s resilience amid global uncertainties continues to be a key theme, with Tech Mahindra’s results reflecting solid order inflows and margin expansion.

Mid-cap companies also showcased impressive results, with Bank of Maharashtra leading the pack in the Public Sector Bank segment. The bank’s earnings beat expectations, driven by improved asset quality and higher net interest margins. This performance is a bright spot in the banking sector, which has been grappling with credit cost pressures and cautious lending environments.

Small-cap stocks also delivered noteworthy performances, with Indo Thai Securities in the Capital Markets sector, Poonawalla Finance in the Non-Banking Financial Company (NBFC) space, and Waaree Renewable Energy in the Power sector emerging as top performers. These companies demonstrated strong profit growth and operational improvements, reflecting the dynamism and growth potential inherent in smaller market capitalisation firms.

Bharat Heavy Electricals Ltd: A Case Study in Earnings Upside

Among the latest results declared in the last 24 hours, Bharat Heavy Electricals Ltd (BHEL), a heavyweight in the Heavy Electrical Equipment industry with a market cap of ₹91,700.14 crores, reported a markedly positive quarter. The company’s financial score improved significantly from 5 to 14 over the past three months, signalling a turnaround in performance.

BHEL’s Profit Before Tax (PBT) excluding other income surged by 325.01% to ₹301.08 crores, while Profit After Tax (PAT) grew by 189.8% to ₹390.40 crores. Additionally, the company’s cash and cash equivalents reached a record high of ₹8,154.13 crores at half-year, underscoring a strong liquidity position. These metrics have shifted BHEL’s market sentiment from bullish to mildly bullish as of 8 January 2026, reflecting cautious optimism among investors.

Aggregate Profit Growth and Market Implications

The aggregate profit growth for the quarter is driven largely by mid and small caps, which have outpaced large caps in earnings momentum. This trend suggests that investors may need to recalibrate their portfolios to capture growth opportunities beyond the traditional large-cap stalwarts. The mid-cap segment’s 67.0% positive result rate is particularly compelling, indicating that these companies are better positioned to capitalise on economic recovery and sectoral tailwinds.

Conversely, the large-cap segment’s subdued 29.0% positive result rate highlights ongoing challenges such as margin pressures, global supply chain disruptions, and cautious capital expenditure. Investors should remain selective within this segment, focusing on companies with resilient business models and strong balance sheets.

Upcoming Earnings to Watch

Looking ahead, several key companies are scheduled to announce their results on 20 January 2026. These include United Spirits Ltd, Gujarat Gas Ltd, and Persistent Systems Ltd. Their earnings will be closely monitored for indications of sectoral trends and broader market sentiment as the earnings season progresses.

Conclusion: Navigating a Mixed Earnings Landscape

The December 2025 quarter earnings season paints a picture of a market in transition. While large caps continue to face headwinds, mid and small caps are driving profit growth and delivering encouraging results. Investors should consider this evolving landscape when constructing portfolios, balancing exposure across market capitalisation segments and sectors to optimise returns.

With 54.0% of companies reporting positive results, the quarter marks a step forward in earnings recovery. However, the divergence between market cap segments and sectors calls for a discerning approach to stock selection, favouring companies with strong fundamentals and growth prospects.

MarketsMOJO Analysis: The mid-cap segment’s outperformance aligns with our thematic focus on agile companies benefiting from structural growth trends. Large caps require selective scrutiny given the mixed earnings outcomes. Our proprietary scoring models continue to favour mid and small caps with robust earnings momentum and improving financial health.

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