Quarterly Earnings Trend: A Clear Upward Trajectory

The latest quarter saw a substantial rise in the proportion of companies reporting positive results, climbing to 63.0% from 46.0% in December 2025, 44.0% in September 2025, and 42.0% in June 2025. This steady improvement over the last four quarters highlights a strengthening earnings environment, reflecting both operational resilience and improving demand conditions across sectors.

Such a trend is encouraging for investors seeking evidence of sustainable growth, especially after a period of subdued earnings momentum. The data suggests that companies are increasingly able to navigate cost pressures and supply chain challenges, translating into healthier bottom lines.

Market Capitalisation Segmentation: Mid and Small Caps Lead the Charge

Breaking down the results by market capitalisation reveals a striking divergence in performance. Mid cap companies delivered the strongest showing, with 75.0% reporting positive earnings, followed by small caps at 65.0%. In contrast, only half of the large cap companies (50.0%) managed to post positive results this quarter.

This disparity underscores the ongoing rotation favouring mid and small cap stocks, which appear to be benefiting from niche market opportunities and more agile business models. Large caps, while still dominant in market influence, are facing headwinds from global macroeconomic uncertainties and sector-specific challenges.

Sectoral Highlights: Standout Performers Across Market Caps

Among large caps, Hindustan Zinc emerged as a top performer within the Non-Ferrous Metals sector, demonstrating robust operational metrics and margin expansion. The company’s ability to capitalise on commodity price stability and efficient cost management has bolstered its earnings profile.

In the mid cap space, Bank of Maharashtra distinguished itself in the Public Sector Bank sector, reporting improved asset quality and higher net interest margins. This performance reflects a gradual recovery in credit demand and prudent risk management, which has helped the bank upgrade its earnings outlook.

Small caps showcased impressive results with Navkar Corporation in Transport Services leading the pack. The company’s strong volume growth and operational leverage contributed to a significant earnings beat. Other notable small cap performers include Waaree Renewable Energy in the Power sector and SG Finserve in the Non-Banking Financial Company (NBFC) segment, both of which reported solid top-line growth and margin improvements.

Automotive Stampings & Assemblies Ltd: A Case Study in Earnings Excellence

Among the 13 companies that declared results in the last 24 hours, Automotive Stampings & Assemblies Ltd stood out with an outstanding financial performance for the March 2026 quarter. The company’s score improved markedly from 17 to 30 over the past three months, reflecting a shift from a bearish to a mildly bearish outlook as of 10 April 2026, with the stock priced at Rs 456.40.

Key financial highlights include a 123.96% growth in Profit Before Tax less Other Income (PBT LESS OI) to Rs 10.19 crores and a remarkable 168.8% increase in Profit After Tax (PAT) to Rs 13.28 crores. Net sales surged 35.88% to Rs 255.55 crores, the highest recorded for the company, while PBDIT reached Rs 18.19 crores, also a record high.

The company’s operating profit to interest ratio hit an impressive 5.76 times, and operating profit to net sales ratio peaked at 7.12%, underscoring strong operational efficiency. Earnings per share (EPS) for the quarter stood at Rs 8.37, the highest in the company’s recent history. These metrics collectively indicate robust profitability and effective cost control, positioning Automotive Stampings & Assemblies Ltd favourably for future quarters.

Upcoming Earnings to Watch

Investors should keep an eye on several key results scheduled for 27 April 2026, including Varun Beverages Ltd, Coal India Ltd, and UltraTech Cement Ltd. These companies represent significant sectors such as beverages, mining, and cement, and their earnings will provide further insight into the broader economic recovery and sectoral health.

Implications for Investors and Market Outlook

The March 2026 earnings season reflects a market environment where mid and small cap companies are driving growth and delivering superior earnings outcomes relative to their large cap counterparts. This trend suggests that investors seeking alpha may find better opportunities in these segments, particularly in sectors demonstrating operational leverage and demand resilience.

Large caps, while more stable, are currently facing a mixed earnings landscape, necessitating a more selective approach. Companies like Hindustan Zinc and Bank of Maharashtra exemplify the potential for strong performance within their respective sectors, but broader macroeconomic factors continue to weigh on the large cap universe.

Overall, the improving earnings trend and sectoral leadership from mid and small caps provide a constructive backdrop for equity markets. However, investors should remain vigilant to evolving economic conditions and company-specific fundamentals to navigate the market effectively.

Summary

The March 2026 quarter has delivered a clear message: earnings momentum is gaining traction, especially among mid and small cap stocks. With 63.0% of companies reporting positive results, up from just 42.0% six months ago, the market is witnessing a broad-based recovery. Sectoral leaders across metals, banking, transport, power, and NBFCs are driving this growth, while select large caps continue to demonstrate resilience amid challenges. This earnings season reinforces the importance of a diversified portfolio approach, with a focus on quality mid and small cap opportunities.

Get Started for only Rs. 16,999 - Get MojoOne for 2 Years + 1 Year Absolutely FREE! (72% Off) Start Today