Current market trends clearly indicate that large-cap companies continue to demonstrate robust profits and performance.
New Delhi: The fourth quarter of 2025 in the Indian stock market proved exceptionally interesting in terms of corporate earnings. While mid-cap and small-cap companies faced significant challenges, large-cap companies attracted attention with their outstanding performance. Data suggests that large-cap companies not only demonstrated stability in revenue and profits but also recorded strength despite global volatility.
Significant Surge in Large-Cap Company Earnings
According to a report by Equirus Securities, large-cap companies recorded a year-on-year increase of approximately 6% in revenue during the fourth quarter ending March 2025. This conclusion was drawn based on the financial results of 270 companies, indicating that the performance of large-cap companies exceeded analysts' expectations.
The report reveals that the observed companies experienced a 6% and 4% increase in EBITDA and net income, respectively. Significantly, these figures surpassed analyst estimates by 4 to 5 percentage points. This clearly indicates that these companies demonstrated strength on both revenue and profit fronts despite adverse conditions.
Weak Performance of Mid-cap and Small-cap Companies
Conversely, mid-cap companies witnessed only a 2% increase in revenue during the fourth quarter of fiscal year 25. Small-cap companies, however, experienced a year-on-year decline of approximately 16% in revenue. These figures indicate that small and medium-sized companies were unable to overcome challenges such as market volatility and reduced demand.
Experts believe that limited resource availability, rising costs, and intense competition hampered the performance of mid-cap and small-cap companies. In contrast, large-cap companies possess ber balance sheets and better strategies and resources to navigate challenging circumstances.
Sectors Driving Large-Cap Growth
The report highlights that sectors such as retail, pharma, capital goods, and consumer durables performed well during this quarter. These sectors maintained stable demand, and companies increased their market share through new product launches. Conversely, the FMCG, IT, auto, and infrastructure sectors did not show the expected growth, putting pressure on large-cap companies in these areas.
Excluding oil marketing companies from the overall analysis reveals a 5% increase in EBITDA and a 3% increase in revenue for the remaining companies. Similarly, excluding banking, financial services, and insurance companies, other sectors demonstrated a 7% EBITDA growth and a 6% revenue increase.
Positive Outlook for the Next Quarter
Further strengthening of corporate earnings is anticipated for the current fiscal year, fiscal year 2026. The Equirus report has revised upwards the earnings per share (EPS) estimates for approximately 28% of the companies included. These companies primarily belong to the capital markets, chemicals, defense, metals, and textiles sectors.
Experts believe that government policies, export demand, and increased domestic consumption in these sectors will lead to better performance in the coming months. Government incentives and investments, particularly in the defense and chemical sectors, could further accelerate revenue growth for these companies.
Market Implications of These Results
The fourth-quarter results clearly indicate that market stability is increasingly dependent on a select few b companies and sectors. The performance of large-cap companies suggests that investors should focus on companies with b fundamentals, especially during times of global uncertainty.
Furthermore, it is crucial for mid-cap and small-cap companies to strengthen their cost strategies and improve operational efficiency to remain competitive.
