Quarterly Earnings Trend: A Gradual Improvement

The proportion of companies reporting positive results has steadily increased over the last four quarters, signalling a tentative recovery in corporate earnings. For the March 2026 quarter, 58.0% of companies posted positive results, up significantly from 46.0% in December 2025, 44.0% in September 2025, and 41.0% in June 2025. This upward trajectory suggests improving business conditions and better cost management across sectors, although the pace remains uneven.

Sectoral and market cap-wise analysis reveals that mid-cap companies are spearheading this recovery, with 80.0% delivering positive results in the latest quarter. Small caps also showed resilience with 54.0% positive outcomes, while large caps lagged behind at 43.0%. This divergence underscores the relative agility of mid and small cap firms in adapting to market dynamics compared to their larger counterparts.

Large Cap Performance: FMCG Shines Amidst Challenges

Among large caps, Nestle India emerged as a standout performer in the FMCG sector, maintaining steady growth despite inflationary pressures and input cost volatility. The company’s ability to sustain margins and volume growth has helped it buck the broader trend of subdued large-cap earnings. However, the overall large-cap segment remains cautious, reflecting ongoing concerns about global economic uncertainties and tightening monetary policies.

Mid Cap Momentum: Banking Sector Leads

The mid-cap space was dominated by Bank of Maharashtra, a public sector bank that reported robust quarterly numbers. The bank’s strong credit growth, improved asset quality, and controlled provisioning contributed to its positive earnings surprise. This performance highlights the improving health of the banking sector, particularly among mid-sized lenders, which are benefiting from a pick-up in economic activity and better risk management.

Small Cap Highlights: Transport and Renewables Lead Gains

Small cap companies delivered mixed but encouraging results, with Navkar Corporation from the transport services sector leading the pack. Navkar’s strong operational performance and improved freight volumes contributed to its top ranking among small caps. Waaree Renewable Energy and SG Finserve, representing the power and NBFC sectors respectively, also posted impressive earnings, reflecting sectoral tailwinds and effective cost controls.

Spotlight on Sangam (India) Ltd: Garments & Apparels Sector

Among recent declarations, Sangam (India) Ltd stood out with a very positive financial performance for the March 2026 quarter. The company’s Profit Before Tax (PBT) excluding other income surged by 217.5% compared to the previous four-quarter average, reaching ₹50.36 crores. Net Profit After Tax (PAT) also doubled, growing 112.0% to ₹34.08 crores. Sangam’s operating profit to interest ratio hit a high of 3.78 times, while net sales climbed to ₹883.92 crores, marking the highest quarterly sales in its history.

Other key metrics for Sangam included a PBDIT of ₹101.78 crores and an operating profit to net sales ratio of 11.51%, both at record levels. The company’s earnings per share (EPS) rose to ₹6.54, and cash and cash equivalents stood at ₹65.80 crores at half-year end, underscoring a strong liquidity position. These figures reflect Sangam’s robust operational execution and favourable market conditions in the garments and apparels sector.

Aggregate Profit Growth and Sectoral Patterns

The aggregate profit growth across the 113 companies declaring results indicates a cautious but improving earnings environment. Mid caps have clearly outperformed, driven by banking and financial services, while small caps have benefited from niche sectors such as transport and renewable energy. Large caps, despite some bright spots like FMCG, continue to face margin pressures and slower growth.

This pattern suggests investors may find more attractive opportunities in mid and small cap stocks in the near term, especially those with strong fundamentals and sector tailwinds. However, large caps remain critical for portfolio stability, particularly those with resilient business models and pricing power.

Upcoming Results to Watch

Market participants will closely monitor the earnings announcements of heavyweight companies such as Hindustan Zinc Ltd, Reliance Industries Ltd, and Shriram Finance Ltd, all scheduled to declare results on 24 April 2026. These results are expected to provide further clarity on sectoral momentum and broader market direction heading into the new fiscal year.

Conclusion: Earnings Season Reflects a Market in Transition

The March 2026 quarterly earnings season paints a picture of a market in transition, with mid caps leading the charge on profitability and small caps showing pockets of strength. Large caps remain challenged but not without bright spots, particularly in defensive sectors like FMCG. Investors should continue to analyse earnings quality and sectoral dynamics carefully, balancing growth prospects with risk management as the economic landscape evolves.

Overall, the improving trend in positive results and profit growth offers cautious optimism for the equity markets, signalling that corporate India is gradually adapting to the changing macroeconomic environment and positioning for sustainable growth.

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