Nifty 50 companies reported weak earnings for the fourth consecutive quarter, while mid and small-cap companies registered b growth. Sales for large companies have fallen to a 17-quarter low, and their share in corporate profits has shrunk to 50 percent.
Stock: Following weak results in the September 2025 quarter, the earnings growth rate of Nifty 50 companies lagged behind the combined performance of all other listed companies for the fourth consecutive quarter. In Q2 FY2026, the combined net profit of these companies grew by only 1.2 percent, the slowest growth in 12 quarters. In contrast, the combined net profit of all listed companies grew by 10.8 percent, which is the fastest pace in six quarters.
Sales Growth at 17-Quarter Low
The combined net sales of Nifty 50 companies also remained sluggish. In Q2 FY2026, sales growth was recorded at just 6.4 percent, the lowest growth in the last 17 quarters. In comparison, the combined sales of all listed companies grew by 7.2 percent, which is better than 6.64 percent in Q1 and higher than 7 percent in Q2 of the previous year.
Consistent Weakness in Earnings Growth
Since September 2025, Nifty 50 companies have consistently lagged behind the combined earnings of all other companies for four consecutive quarters. Starting from June 2023, Nifty 50's performance has been weak in 8 out of the last 10 quarters. This is in direct contrast to the period between March 2022 and March 2023, when large companies performed better for five consecutive quarters.
Share in Total Corporate Profit Decreases
The contribution of Nifty 50 companies to the country's total corporate earnings has fallen sharply. In Q2 FY2026, their share dropped to 50 percent, the lowest level in the last five years, whereas three years ago, this share was approximately 60 percent. This clearly indicates that large companies are experiencing greater pressure in the current economic environment.
Quarter-on-Quarter Decline in Earnings
The combined net profit of Nifty 50 companies increased to ₹1.81 lakh crore in Q2 FY2026. This is slightly better than the ₹1.79 lakh crore recorded in Q2 of the previous year. However, compared to ₹2.02 lakh crore in Q1, earnings registered a decline of 10.4 percent, which is the lowest level in four quarters.
Strong Momentum for Mid-cap and Small-cap Companies
According to Business Standard, the combined profit of 2,647 listed companies increased to ₹3.62 lakh crore in Q2 FY2026. According to analysts, the primary reason for the weak earnings of Nifty 50 is the b performance of mid-cap and small-cap companies. Mid-cap 150 companies saw their earnings grow by 27 percent year-on-year, while Small-cap 250 companies registered a 37 percent increase. In comparison, Large-cap (Nifty 100) companies' earnings grew by only 10 percent.
Additional Pressure on Large Companies
Brokerages like Motilal Oswal and Elara Capital state that weak earnings from private sector banks and the auto sector have put additional pressure on Nifty 50 companies. Many large-cap companies are dependent on economic activities, and their earnings have been affected by the slow recovery. However, some analysts anticipate that the performance gap between large-cap and other companies will not persist for long.
