Overall Earnings Trend and Market Cap Analysis

The December 2025 quarter saw 4,079 stocks declare results, marking a slight improvement in positive earnings outcomes compared to the previous three quarters. The proportion of companies reporting positive results rose to 46.0%, up from 44.0% in September 2025 and 42.0% in June 2025, though still marginally below the 47.0% recorded in March 2025. This suggests a modest recovery in corporate profitability after a period of subdued performance.

Breaking down by market capitalisation, mid-cap companies led the pack with 52.0% reporting positive results, a notable outperformance relative to large caps at 43.0% and small caps at 45.0%. This trend underscores the resilience and growth potential of mid-sized firms amid ongoing macroeconomic uncertainties. Large caps, often seen as market bellwethers, continue to face headwinds, while small caps remain volatile but show pockets of strength.

Sectoral Highlights and Top Performers

Among large caps, Muthoot Finance stood out in the Non-Banking Financial Company (NBFC) sector, delivering robust results that contributed positively to the sector’s overall performance. The company’s steady growth in loan disbursements and asset quality improvements helped it maintain investor confidence despite broader economic challenges.

In the mid-cap segment, FSN E-Commerce emerged as a top performer within the E-Retail/E-Commerce sector. The company’s ability to scale operations and improve margins amid competitive pressures was a key driver behind its positive earnings surprise. This reflects the growing consumer adoption of digital platforms and the sector’s expanding market share.

Small caps also produced notable winners, with Cupid in the FMCG sector delivering encouraging results. The company’s focus on product innovation and distribution expansion helped it navigate inflationary pressures and maintain volume growth.

Micro Cap and Other Noteworthy Results

Micro cap stocks showcased some of the most impressive earnings performances. Jindal Poly Inve, another NBFC, and Trescon from the Realty sector, both reported strong profit growth, signalling pockets of opportunity in smaller, more agile companies. Additionally, Indo Thai Securities in the Capital Markets sector was among the top small-cap performers, benefiting from increased market activity and improved brokerage revenues.

Recent Developments: CIE Automotive India Ltd

In the last 24 hours, CIE Automotive India Ltd, a key player in the Auto Components & Equipment industry, declared its December 2025 quarter results. The company’s financial performance was largely flat, with net sales reaching a quarterly high of ₹2,393 crores. However, the company’s momentum score declined from 4 to 1 over the past three months, reflecting a mild shift in market sentiment from sideways to mildly bullish as of 18 February 2026 at ₹459.15. This suggests cautious optimism among investors, awaiting clearer directional cues in upcoming quarters.

Quarterly Earnings Quality and Outlook

While the aggregate data points to a gradual improvement in earnings quality, the overall picture remains mixed. The slight uptick in positive results is tempered by ongoing challenges such as inflationary pressures, supply chain disruptions, and geopolitical uncertainties. Large caps, despite their scale and resources, continue to face margin pressures and cautious demand outlooks, which is reflected in their lower proportion of positive results.

Mid caps, benefiting from nimble operations and sectoral tailwinds in technology, consumer discretionary, and financial services, have demonstrated stronger profit growth and earnings resilience. Small caps, though more volatile, have shown selective strength in consumer goods and capital markets, suggesting opportunities for investors with a higher risk appetite.

Upcoming Earnings to Watch

Investors should keep an eye on the upcoming results from companies such as BF Utilities Ltd and PVP Ventures Ltd scheduled for 23 February 2026, followed by Schaeffler India Ltd on 24 February 2026. These companies operate in sectors that have shown mixed performance recently, and their results could provide further clarity on sectoral momentum heading into the new fiscal year.

Implications for Investors

The current earnings season underscores the importance of selective stock picking and sectoral focus. Mid-cap stocks appear to offer better growth prospects and earnings stability, making them attractive for investors seeking capital appreciation. However, large caps with strong balance sheets and niche leadership, such as Muthoot Finance, remain critical for portfolio stability.

Meanwhile, micro and small caps continue to present opportunities for alpha generation but require careful due diligence given their higher volatility and sensitivity to market cycles. The mixed earnings environment calls for a balanced approach, combining quality large caps with growth-oriented mid and small caps to optimise risk-adjusted returns.

Conclusion

The December 2025 quarter earnings season paints a picture of cautious optimism amid ongoing economic headwinds. With 46.0% of companies reporting positive results, the market is gradually regaining confidence, led by mid-cap firms that have demonstrated superior earnings growth. Investors should remain vigilant, focusing on companies with strong fundamentals and sectoral tailwinds as the market navigates through a complex macroeconomic landscape.

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