The Indian stock market benchmark indices, Sensex and Nifty 50, have maintained a healthy upside as the corporate earnings of the second quarter of FY26 surprised on the upside and demonstrated strong resilience.
According to Nithin Kamath, Founder & CEO of Zerodha, better-than-expected Q2 results are likely a key reason why domestic equities are holding up far better than most market bears had anticipated.
In a post on X, Kamath highlighted that over 3,500 companies have declared results so far, with data indicating a broad-based recovery across sectors.
Aggregate revenues for these companies have grown 8.2% year-on-year (YoY), while EBITDA and profit after tax (PAT) are up 14.1% and 16.0%, respectively. Excluding financial services, profit growth accelerates to 22.5%, driven largely by margin expansion rather than pure volume growth, according to IndiaDataHub.
“Perhaps this explains why indices are holding up much better than most bears had expected. Hoping this earnings strength sustains,” Kamath said.
Broad-based sectoral recovery
Commodities: Commodities delivered one of the strongest performances, with sector profits rising 44.1% and revenue up 13.4%. Metals and mining companies drove much of the surge as Tata Steel, Lloyds Metals and Jindal Stainless benefited from better realisations, volume growth and product mix improvements. Fertilisers posted a mixed earnings, data from IndiaDataHub showed.
Energy: Energy remained a major driver of profitability, with PAT growing nearly 52%. Gandhar Oil posted one of the cleanest improvements this season, ONGC also delivered a strong profit jump despite flat revenue, while Gujarat Gas and Indraprastha Gas (IGL) had a tougher quarter.
Healthcare: Healthcare sustained its multi-week outperformance, with profits up 16% and revenue up 13%. Select pharma companies delivered margin improvement through better global product sales and more efficient APIs.
Industrials: Industrials posted another balanced week with profits rising 18.7%. Defense and engineering drove the upside. Bharat Dynamics’ revenue more than doubled, while KEC International reported nearly twice the profit. Syrma SGS Technology showed strength and traditional EPC names like Afcons and Cochin Shipyard saw margins squeezed. Hindustan Aeronautics and Ashok Leyland delivered steady but slightly softer prints on mix and cost pressure, DataHub data showed.
Consumer Discretionary: Consumer Discretionary profits rose 17.5%, though performance within the segment was uneven. Hero MotoCorp and PN Gadgil benefitted from festive demand and better margins, while Asian Paints turned modest revenue growth into strong profit gains. In contrast, Voltas was hit by a weak summer and higher costs, and Welspun Living faced the impact of US tariffs and soft global demand.
FMCG: FMCG revenues have risen by 10%, but profit growth has stayed muted at 1.7%. Margin pressure persisted even among companies that delivered strong top-line prints.
Financial Services: Financial Services have posted a 6.2% profit growth, consistent with the season’s stable tone.
Telecommunication: Telecommunication delivered the biggest statistical jump of the week, with profit up 143%, though most of the improvement came from lower finance costs and a stabilising operational base, the data showed.
Services: Services grew revenue by 14%, but PAT remained almost flat due to freight softness and integration-related pressures. Utilities saw profits fall 17%, reflecting cost pressures and last year’s high base.
Overall, the earnings season underscores a clear theme: profitability is being driven more by margin gains, cost control and mix upgrades than by headline revenue growth. Even in segments where demand has been patchy, disciplined execution has helped keep India’s earnings cycle on a solid footing.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
