India Inc. concluded the March quarter earnings season on a healthy note, with corporate results exceeding Street expectations and marking a turnaround after three consecutive quarters of subdued growth. The improvement was largely driven by lower input costs and easing inflation, which supported operational profitability across sectors.
Large-cap companies led the earnings recovery, outperforming their mid- and small-cap counterparts. According to a recent analytical report by brokerage firm Equirus Securities, the overall EBITDA and earnings for the March quarter surpassed expectations by 4% and 5%, respectively. This translated into year-on-year (YoY) growth of 6% in EBITDA and 4% in earnings, while revenue remained largely in line with a 5% YoY increase.
A breakdown by market capitalization revealed a clear divergence in performance. Within the Equirus universe of 270 companies, large caps (54 companies) posted a healthy 6% YoY earnings growth. Mid-cap companies (68) showed a modest 2% increase, while small caps (148) witnessed a sharp 16% YoY decline in earnings. This disparity highlights a flight to quality and a consolidation trend favoring larger, more resilient businesses in a challenging macroeconomic environment.
Excluding Oil Marketing Companies (OMCs), the Equirus universe reported EBITDA and earnings growth of 5% and 3% YoY, respectively. Notably, the ex-BFSI (Banking, Financial Services, and Insurance) group delivered stronger growth of 7% and 6% YoY in EBITDA and earnings. Sectors such as retail, pharmaceuticals, capital goods, and consumer durables demonstrated strong operating profit growth. In contrast, FMCG, infrastructure, IT, and auto sectors registered muted performance.
Approximately 28% of the companies saw upgrades in earnings per share (EPS) estimates for FY26, led by robust results in capital markets, chemicals, defense, metals, and textiles. Meanwhile, consumer durables, FMCG, and building materials sectors experienced EPS downgrades, signaling potential challenges ahead for these industries.
Muted demand, rising costs could test select sectors
Looking ahead, Equirus Securities offers a cautiously optimistic outlook, as it believes some sectors may continue to face challenges from pricing pressures, input costs, and demand volatility.
Strategic initiatives like cost savings, new product introductions, and market expansion efforts are expected to support overall profitability and growth. The performance of large caps reinforces their resilience in a dynamic market, suggesting continued stability in the near term, it added.
Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.
