Quarterly Earnings Trend Analysis

The latest results season reflects a clear upward trajectory in earnings momentum. The proportion of companies reporting positive results has surged to 70.0% in Dec-2025, compared to 42.0% in Sep-2025, 40.0% in Jun-2025, and 44.0% in Mar-2025. This improvement underscores a stabilising economic environment and better operational execution across industries.

However, this positive trend is not uniform across market capitalisation segments. Large-cap companies have shown a more cautious performance, with only 34.0% delivering positive results. In contrast, mid-cap and small-cap stocks have each recorded a robust 75.0% positive result ratio, highlighting the growing investor confidence in smaller, more agile companies.

Sectoral and Market Cap Highlights

Among large caps, HCL Technologies (Computers - Software & Consulting) stood out with strong earnings growth, benefiting from sustained demand in digital transformation and IT services. The company’s results reflect improved margins and steady revenue growth, reinforcing its position as a sector leader.

In the mid-cap space, Bank of Maharashtra (Public Sector Bank) delivered a commendable quarter, supported by improved asset quality and higher net interest margins. The bank’s prudent risk management and focus on retail lending have contributed to its earnings upgrade, signalling a turnaround in the public banking sector.

Small caps have been the star performers this quarter. Indo Thai Securities Ltd. (Capital Markets) reported outstanding financials, with net sales soaring to ₹27.71 crores, a 125.6% increase compared to the previous four-quarter average. Profit before tax (excluding other income) surged by 224.8% to ₹22.49 crores, while net profit after tax rose 218.4% to ₹17.00 crores, all marking record highs for the company. Its earnings per share (EPS) reached ₹13.98, and cash and cash equivalents stood at an impressive ₹140.83 crores at half-year end, underscoring strong liquidity and operational efficiency.

Top Performers and Earnings Quality

Besides Indo Thai Securities, other small-cap companies such as Navkar Corporation (Transport Services) and Krishna Phosphates (Fertilizers) have also posted impressive results, contributing to the sector’s overall positive sentiment. These companies have demonstrated strong revenue growth, margin expansion, and improved return ratios, reflecting operational resilience amid challenging macroeconomic conditions.

Indo Thai Securities’ recent mild bullish technical shift on 12 Jan 2026 at ₹253.10 further validates the market’s recognition of its strong fundamentals and growth prospects. The company’s MarketsMOJO score improved from 36 to 38 over the last three months, indicating enhanced financial health and investor confidence.

Sectoral Patterns and Market Implications

The capital markets sector, represented by Indo Thai Securities, has benefited from increased market activity and higher brokerage income, while the transport and fertiliser sectors have gained from improving demand and favourable commodity prices. The public sector banking segment’s recovery, exemplified by Bank of Maharashtra, suggests a gradual normalisation of credit cycles and asset quality.

Conversely, the relatively muted performance of large caps may reflect ongoing global uncertainties and cautious corporate spending. Investors may need to balance exposure between stable large-cap names and high-growth mid and small caps to optimise portfolio returns in the near term.

Upcoming Earnings to Watch

Market participants will closely monitor the results of key companies scheduled to report shortly, including Jio Financial Services Ltd, HDFC Life Insurance Company Ltd, and 360 ONE WAM Ltd on 15 Jan 2026. These companies operate in sectors critical to economic growth and financial services, and their performance will provide further clarity on sectoral trends and earnings sustainability.

Aggregate Profit Growth and Outlook

The aggregate profit growth for the quarter is notably buoyed by the small and mid-cap segments, which have outpaced large caps in both revenue and earnings expansion. This divergence highlights the evolving market dynamics where nimble companies with focused business models are capitalising on emerging opportunities more effectively.

Investors should consider the quality of earnings, balance sheet strength, and sectoral tailwinds when evaluating stocks in this environment. The current earnings season suggests a cautiously optimistic outlook, with pockets of strong growth balanced by ongoing macroeconomic challenges.

Conclusion

The December 2025 quarterly results season has reinforced the narrative of a broad-based recovery led by mid and small-cap companies. While large caps remain selective in their earnings beats, the overall improvement in positive result ratios to 70.0% signals strengthening corporate fundamentals. Key performers such as Indo Thai Securities, Bank of Maharashtra, and HCL Technologies exemplify the diverse drivers of growth across sectors. As the market awaits upcoming results from major financial services players, investors are advised to maintain a balanced approach, leveraging the growth potential in smaller companies while monitoring risks in larger, more cyclical names.

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