Auto, Banks & NBFCs, Client Durables, FMCG, EMS, and IT lead earnings upgrades
Mumbai, February 23, 2026 — India Inc.’s earnings momentum remained resilient within the third quarter of FY25-26, with small-cap firms rising because the strongest contributors to earnings progress, in accordance to a report analysing the third quarter efficiency of listed firms by Mid-market specialist monetary providers group Equirus. Within the report Equirus Securities one of many prime institutional fairness brokerages in India highlights broad-based earnings upgrades, regular operational efficiency, and enhancing sectoral outlooks throughout key segments of the financial system.
The 3QFY26 Earnings Evaluation, reveals that the Equirus Universe of over 250 shares delivered a 3rd consecutive quarter of double-digit earnings progress. Small cap firms emerged because the standout performers, posting a sturdy 22% year-on-year (YoY) earnings surge — outpacing their mid-cap and large-cap counterparts and signalling a broadening of India’s company earnings restoration.
Sturdy Earnings Upgrades Drive Momentum
Roughly 36% of firms below protection witnessed earnings per share (EPS) upgrades throughout the quarter, reflecting enhancing enterprise fundamentals and demand resilience throughout a number of industries. Sectors driving these upgrades embrace Auto, Banks & NBFCs, Client Durables, FMCG, Digital Manufacturing Providers (EMS), and IT. Earnings downgrades have been concentrated in Constructing Supplies, Cement, Infrastructure, Chemical compounds, Realty, and Retail. The pattern signifies rising investor confidence and enhancing ahead earnings visibility throughout market capitalisation segments.
Small-cap firms led the earnings surge, benefiting from working leverage, increasing demand, and sector-specific tailwinds. The Equirus Securities report underscores that small caps proceed to outperform bigger friends in earnings progress phrases, supported by enhancing steadiness sheets and increasing market alternatives.
Throughout the Equirus protection universe of 262 firms, income grew 10% YoY, whereas EBITDA and PAT every rose even quicker at 14% and 15% respectively — each forward of market expectations. The quicker margin and income restoration signifies return of pricing energy and price efficiencies realised by India Inc, in a falling rate of interest setting.
Small Caps (142 firms) led with 22% YoY earnings progress, adopted by Mid-Caps (63 firms) at 15% YoY and Giant Caps (57 firms) at 14% YoY. Excluding BFSI, PAT grew 17% YoY, whereas on an ex-BFSI and ex-OMC foundation, Income, EBITDA, and PAT every grew 12%, 11%, and 11% YoY respectively.
“The outcomes illustrate a pattern now we have been observing throughout Bharat, of entrepreneurship booming exterior of the mega metros. Increasingly more companies from tier 2 and tier 3 cities have been tapping the capital markets, as founders look to develop and scale their companies. A broadening restoration throughout mid and small caps will assist increase employment and lays a robust basis on the march, to the Viksit Bharat of our goals,” stated Ajay Garg, Managing Director, Equirus group.
Sectoral Leaders: Consumption, Financials and Know-how
Auto, Banks & NBFCs, Client Durables, FMCG, EMS, and IT reported sturdy operational metrics, demand visibility, and margin stability.
Monetary providers firms demonstrated regular asset high quality developments and mortgage progress momentum, whereas consumption-linked sectors benefited from enhancing discretionary spending patterns.
EMS and IT firms noticed sustained deal momentum and execution power supporting earnings outlooks. EMS diversified export-led gamers outperformed on sturdy execution, localisation advantages, and wholesome order books. IT Providers posted modest fixed foreign money progress with margin enchancment from productiveness gains, whereas deal wins remained wholesome.
Auto OEMs benefited from GST cuts and festive season demand, with working leverage offsetting uncooked materials stress. Two-wheelers are anticipated to outperform passenger autos on the again of rural restoration and alternative demand by way of FY26–27.
Banks reported stabilised margins and moderating credit score prices, with stronger momentum in PSU and mid-sized banks, whereas asset high quality improved throughout the sector. NBFCs noticed sharp disbursement rebounds with enhancing asset high quality and optimistic legal responsibility repricing.
Client Durables noticed improved RAC demand pushed by stock normalisation and pre-buying forward of summer time. FMCG reported gradual demand stabilisation with enhancing volume-led progress and regular margins, with alcobev outperforming on premium-led progress.
Wires & Cables too remained strong on infrastructure tailwinds.
“The 3QFY26 outcomes reinforce a broadening earnings restoration throughout India’s company panorama. Small caps main the cost — with 22% YoY earnings progress — is a structurally optimistic sign. The mix of home consumption restoration, rural demand revival, and authorities capex helps our constructive view on Indian equities heading into FY27.”
— Maulik Patel, Director & Head of Analysis, Equirus Securities
Earnings Efficiency in Line with Expectations
Total earnings efficiency for the quarter remained largely consistent with expectations, signalling stability in company profitability regardless of international uncertainties. Margin developments have been supported by price efficiencies, pricing self-discipline, and operational optimisation throughout sectors.
The Equirus Securities report notes that earnings progress continues to be supported by structural drivers together with home demand resilience, capex momentum, and sector-specific progress catalysts.
Outlook: What to Watch in 4QFY26
“Wanting into 4QFY26, key monitorables embrace the tempo of NHAI order awards for building firms, the summer time season demand cycle for client durables, US market dynamics and gRevlimid contributions for healthcare names, and RBI fee choices that might affect BFSI NIM trajectories,” stated Patel. “Value hikes and demand momentum in Cement provide near-term help, although new capability additions might stress utilisation charges. Logistics stays supported by EXIM restoration and DFC connectivity enhancements,” he added.
Funding Outlook
With earnings upgrades outpacing downgrades and small caps main progress, the outlook for Indian equities stays constructive. The Equirus Securities report highlights that earnings visibility throughout key sectors, coupled with steady macroeconomic indicators, helps a optimistic medium-term progress trajectory for company India.
Traders might proceed to monitor sector-specific alternatives rising from consumption restoration, monetary sector enlargement, and technology-led transformation developments shaping India’s progress story.
About Equirus Group
Equirus Group is a number one full-service monetary providers agency specializing in funding banking, institutional securities, wealth and asset administration, HNI broking, and insurance coverage options. With a “consumer all the time first” method and a confirmed observe report of delivering worth creation, Equirus has constructed impeccable credentials throughout domains and sectors. Equirus has accomplished greater than 315+ transactions throughout M&A, PE, IPOs, QIPs, Rights Points, and Structured Finance, elevating USD 15 billion within the course of throughout sectors over the past 18 years, and has created a differentiation for itself by way of its capacity to construction and ship transactions consistent with the consumer’s necessities.
Equirus group based by veteran funding banker Ajay Garg is backed by marquee buyers together with the late Rakesh Jhunjhunwala, Amicus Capital and Federal Financial institution. As knowledgeable pushed meritocratic group, workers maintain a major chunk of the group’s fairness.
Disclosures:
Equirus Securities Non-public Restricted is a SEBI Registered Analysis Analyst (Reg. No. INH000001154). It is a transient be aware and never an funding recommendation. The Analysis Analyst and its associates haven’t any monetary curiosity, positions, or compensation preparations with the securities/sector coated, until acknowledged in any other case in detailed report. Investments are topic to market danger and previous efficiency just isn’t indicative of future outcomes. Detailed disclosures can be found within the sector protection report dated February 20, 2026.
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