Quarterly Earnings Overview and Trends

The latest quarter saw 42.0% of companies delivering positive results, a slight uptick from 40.0% in June 2025 but a marginal dip compared to 44.0% in March 2025. This indicates a stabilising earnings environment after a period of volatility. The December 2025 quarter results are yet to be declared, leaving investors to anticipate whether this trend will sustain or shift.

Market capitalisation-wise, mid-cap companies led the pack with 50.0% reporting positive earnings, outperforming both large caps at 39.0% and small caps at 42.0%. This suggests that mid-sized firms are currently better positioned to capitalise on growth opportunities, possibly due to their agility and sectoral exposure.

Sectoral Highlights and Top Performers

Among large caps, Tata Steel emerged as a standout performer within the ferrous metals sector, benefiting from improved commodity prices and operational efficiencies. The company’s earnings beat consensus estimates, supported by higher realisations and cost optimisation measures.

In the mid-cap space, FSN E-Commerce demonstrated robust growth, reflecting the sustained expansion of India’s digital retail ecosystem. The company’s revenue and profitability metrics surpassed expectations, driven by increased consumer adoption and enhanced logistics capabilities.

Small caps also delivered notable performances, with Shaily Engineering from the industrial plastic products sector posting strong earnings growth. The company’s focus on niche product segments and export markets has underpinned its financial resilience.

Micro-cap stocks such as Shree Salasar (NBFC sector) and String Metaverse (paper, forest & jute products) also featured among the top results, highlighting pockets of strength in specialised industries.

Financial Metrics and Profit Growth Analysis

Aggregate profit growth across the board has been encouraging, with several companies reporting significant year-on-year improvements. For instance, G M Breweries Ltd, a mid-sized player in the beverages industry with a market cap of ₹2,727.92 crores, posted a remarkable 76.21% growth in PAT (Profit After Tax) for the half-year ended December 2025. Its PBT (Profit Before Tax) excluding other income surged by 59.0% compared to the previous four-quarter average, signalling operational strength.

Net sales for G M Breweries reached a record ₹202.14 crores in the quarter, accompanied by the highest-ever PBDIT (Profit Before Depreciation, Interest and Tax) of ₹52.58 crores. The operating profit margin to net sales ratio also improved to 26.01%, underscoring enhanced cost management and pricing power. Additionally, the company’s cash and cash equivalents rose to ₹108.40 crores, reflecting a robust liquidity position.

These metrics exemplify the broader earnings momentum seen in select sectors, particularly those benefiting from favourable demand dynamics and efficient cost structures.

Market Sentiment and Outlook

Despite pockets of strength, the overall market sentiment remains cautiously optimistic. The moderate proportion of positive earnings results indicates that many companies continue to face headwinds such as input cost pressures, supply chain disruptions, and geopolitical uncertainties. Large caps, while generally stable, have shown less pronounced earnings beats compared to mid and small caps, suggesting a more measured recovery trajectory.

Investors are advised to monitor upcoming results from key industrial players such as Transformers & Rectifiers India Ltd, Elecon Engineering Company Ltd, and Eimco Elecon (India) Ltd, all scheduled to report on 08 January 2026. These companies operate in capital goods and engineering sectors, which are often bellwethers for broader economic activity.

Sectoral Divergence and Investment Implications

The divergence in earnings performance across sectors and market capitalisation tiers highlights the importance of selective stock picking. Mid-cap firms, particularly in e-commerce and niche industrial segments, have demonstrated superior growth and profitability metrics, making them attractive candidates for investors seeking growth exposure.

Conversely, large caps in traditional sectors such as ferrous metals continue to deliver steady but less spectacular results, reflecting mature business models and cyclical influences. Small and micro caps offer opportunities in specialised industries but carry higher volatility and risk.

Overall, the earnings season reinforces the need for a balanced portfolio approach that combines stable large caps with high-potential mid and small caps, aligned with individual risk tolerance and investment horizon.

Conclusion

The September 2025 quarterly earnings season paints a complex yet promising picture of India’s corporate landscape. With 42.0% of companies reporting positive results, the market is navigating a phase of cautious recovery amid sectoral disparities. Strong performances from mid-cap and select small-cap companies provide bright spots, while large caps maintain steady progress. Investors should remain vigilant, focusing on companies with robust fundamentals, clear growth drivers, and sound financial health as the market moves into the new calendar year.

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