Quarterly Results Overview and Trends

Out of the 72 stocks that declared results for the December 2025 quarter, 67.0% posted positive outcomes, marking a substantial improvement compared to the preceding three quarters where positive results hovered between 40.0% and 44.0%. This quarter’s surge in positive earnings surprises reflects a broad-based recovery and operational resilience across various sectors.

Breaking down the results by market capitalisation reveals a stark contrast. Large-cap companies recorded a modest 40.0% positive result rate, indicating some challenges in sustaining growth momentum. Conversely, mid-cap stocks delivered a robust 72.0% positivity rate, while small caps led the pack with an impressive 77.0% of companies beating expectations. This divergence highlights the growing strength and agility of smaller companies in navigating the current economic environment.

Sectoral and Company Highlights

Among large caps, Union Bank of India emerged as a standout performer within the public sector banking space, demonstrating improved asset quality and stable net interest margins that helped it surpass earnings estimates. The bank’s cautious approach to provisioning and cost control measures contributed to its positive results, though the overall large-cap banking sector remains under pressure from macroeconomic headwinds.

Mid-cap results were led by Bank of Maharashtra, another public sector bank that showed marked improvement in credit growth and reduction in non-performing assets. The bank’s strategic focus on retail and MSME segments has started to pay dividends, reflected in a 15.2% quarter-on-quarter increase in net profit and a 10.8% rise in net interest income.

Small-cap companies delivered the most compelling results, with Indo Thai Securities Ltd. leading the charge in the capital markets sector. The company reported net sales of ₹27.71 crores for the quarter, a staggering 125.6% growth compared to its previous four-quarter average. Profit before tax (excluding other income) surged by 224.8% to ₹22.49 crores, while net profit after tax soared 218.4% to ₹17.00 crores. These figures represent the highest quarterly performance in the company’s history, with earnings per share reaching ₹13.98 and cash and cash equivalents peaking at ₹140.83 crores as of the half-year mark.

Other notable small-cap performers include Navkar Corporation in the transport services sector and Krishana Phosphates in fertilisers, both of which reported strong revenue growth and margin expansion, underscoring the resilience of niche sectors amid broader market volatility.

Aggregate Profit Growth and Market Implications

The aggregate profit growth across the 72 companies reflects a positive earnings environment, particularly driven by mid and small caps. The improvement from 40-44% positive results in earlier quarters to 67% in December 2025 signals a potential inflection point for corporate earnings. However, the subdued performance of large caps suggests caution, as these companies often have greater exposure to global economic uncertainties and regulatory challenges.

Investors may find opportunities in mid and small caps that are demonstrating operational leverage and sector-specific tailwinds. The public sector banking segment, while showing signs of recovery, remains a mixed bag with pockets of strength such as Union Bank and Bank of Maharashtra. Capital markets and transport services sectors are emerging as bright spots, supported by robust demand and improving balance sheets.

Upcoming Earnings to Watch

Market participants will closely monitor the results of key upcoming companies such as Jio Financial Services Ltd, HDFC Life Insurance Company Ltd, and 360 ONE WAM Ltd scheduled to report on 15 January 2026. These companies operate in sectors critical to the broader economy and their earnings will provide further clarity on sectoral trends and investor sentiment heading into the new calendar year.

Outlook and Strategic Considerations

Given the current earnings landscape, a selective approach focusing on mid and small caps with strong fundamentals and sector tailwinds appears prudent. Large caps, while offering stability, may require more cautious positioning until clearer signs of sustained growth emerge. The public sector banking space, despite some bright spots, continues to face challenges that warrant close monitoring of asset quality and credit growth metrics.

Investors should also consider the evolving macroeconomic backdrop, including inflationary pressures and global trade dynamics, which could influence corporate earnings trajectories in the coming quarters. The strong performance of companies like Indo Thai Securities highlights the potential rewards of identifying high-quality growth stories within the smaller market capitalisation segments.

Conclusion

The December 2025 quarterly results season has underscored a bifurcated market environment. While large caps have delivered mixed outcomes, mid and small caps have demonstrated robust earnings growth and operational strength. This divergence offers investors a nuanced landscape to navigate, with opportunities concentrated in agile, well-managed companies across select sectors. As the market awaits the next wave of earnings from major players, the current data suggests a cautiously optimistic outlook for corporate India heading into 2026.

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