Large & mid-cap companies impress, small-caps struggle in September quarter

MUMBAI: Large and mid-cap companies have performed better than small-cap companies during the July-Sept quarter of the current fiscal (Q2FY26), an analysis of the quarterly results of some of the leading companies showed. Among 27 of the 50 constituent companies of the Nifty index that have announced their results, the aggregate profit after tax (PAT) had grown 5%; while for a larger group of 151 companies, the corresponding growth rate was 14%, a report by Motilal Oswal Financial Services (MOFSL) said.The overall earnings growth for these 151 companies was led by the ones from sectors like oil & gas, tech, cement, capital goods and metals sectors. “These five sectors contributed 86% of the incremental YoY accretion in earnings so far,” the report said. The results of the 151 companies that were analysed, constituted 42% of India’s market capitalisation and the 27 Nifty constituents had a combined weight of 69% in the index. Earnings of the 27 Nifty companies that have declared results so far have grown 5% on an annual basis (YoY) against an estimated growth of 6% by the analysts at MOFSL. The earnings growth was driven by HDFC Bank, Reliance Industries, TCS, JSW Steel and Infosys. “These five companies contributed 122% to the incremental YoY accretion in earnings. (In contrast), Coal India, Axis Bank, Eternal, HUL and Kotak Mahindra Bank dragged Nifty earnings lower,” the report said.

“Seven companies within the Nifty reported lower-than-expected profits, while five recorded a beat, and fifteen registered in-line results.”Within the larger group of 151 companies that MOFSL tracks, large-caps and mid-caps had delivered better than estimated results, while small-caps’ results were in line, the report noted. Within this group, 49 large-cap companies posted earnings growth of 13% YoY, similar to the overall universe. 47 mid-cap companies continued their robust showing, a trend seen for the last one year. These companies together delivered an earnings growth at 26% YoY, against an estimated 19% growth.“Multiple mid-cap sectors clocked impressive growth, including technology, cement, metals, PSU banks, real estate, and NBFC – non-lending. In contrast, 55 small-cap companies continued to experience weakness in many sectors, with private banks, NBFC – non-lending, technology, retail, and media posting a YoY earnings decline,” the report noted. These small-cap companies together reported a 3% earnings growth on the year, against an estimated figure of 4%, the report by MOFSL noted.It also noted that while 69% of the small-cap companies either exceeded or met analysts’ estimates, within the large-cap and mid-cap companies under coverage, respectively, 84% and 77% of the companies either exceeded or met the estimates.