Did Q2 earnings rise 14% driven by midcaps and oil & gas companies?
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Synopsis
In Q2 FY26, India's corporate earnings surged by 14%, largely propelled by the oil and gas sector, technology, and mid-cap companies. The report highlights strong growth trends and a positive outlook for the Indian markets moving forward.
Key Takeaways
- Q2 FY26 earnings up 14% YoY.
- Mid-caps lead growth with 26%.
- Oil and gas sector shows 79% YoY growth.
- Overall earnings growth driven by five key sectors.
- Nifty EPS estimates adjusted upwards for FY26.
New Delhi, Nov 19 (NationPress) The earnings reported by Indian corporations that have published their quarterly results so far showed a growth of approximately 14 percent year-on-year in Q2 FY26, primarily fueled by sectors such as oil and gas, technology, cement, capital goods, and metals, according to a report released on Wednesday.
The analysis from Motilal Oswal Financial Services Limited indicated that when categorized by market capitalization, mid-caps led the way with a remarkable 26 percent growth, while large-caps saw a 13 percent increase. On the other hand, small-caps struggled, primarily affected by declines in private banks, non-lending NBFCs, technology, retail, and media sectors.
In the universe of 151 companies assessed by MOFSL, excluding global commodity movers, earnings exhibited a growth of 6 percent, surpassing the initial estimate of 2 percent, while earnings excluding financials soared 25 percent.
The report noted that five sectors contributed to 86 percent of the incremental year-on-year earnings increase. Furthermore, the earnings of the 27 Nifty companies that have disclosed results thus far have experienced a growth of 5 percent.
Mid-caps continue their impressive three-quarter performance streak, with significant advancements in technology, cement, metals, PSU banks, real estate, and non-lending NBFCs.
A closer look at sectoral performance revealed that overall earnings growth was significantly bolstered by Oil and Gas, which witnessed a 79 percent YoY increase, cement climbing 147 percent, and technology rising 8 percent.
"Despite the Indian equity markets experiencing somewhat muted performance over the previous year, we maintain that the current state of Indian markets is considerably more robust compared to last year," the brokerage emphasized.
"The earnings cycle appears to be reaching its nadir, with expectations for growth to accelerate into double digits. Valuations remain reasonable, with the Nifty trading at 21.4x, close to its long-term average of 20.8x. Any indicators of accelerating earnings growth are likely to support a rise in valuations," they added.
MOFSL also mentioned that Nifty EPS estimates were slightly adjusted upward for FY26 to Rs 1,101 from Rs 1,096 and for FY27 to Rs 1,278 from Rs 1,274, as highlighted in the report.
Point of View
I find it crucial to highlight the resilience of the Indian markets. Despite previous challenges, the upward trajectory of earnings signifies a strong recovery. This growth is a testimony to the potential and strength of our economy, reinforcing our commitment to report on the evolving financial landscape.
NationPress
19/11/2025
Frequently Asked Questions
What are the primary sectors driving earnings growth?
The main sectors contributing to earnings growth include oil and gas, technology, cement, capital goods, and metals.
How have mid-caps performed in Q2 FY26?
Mid-caps have led the growth with a remarkable 26% increase compared to other market capitalizations.
What is the expected growth in the Indian markets?
The earnings cycle is expected to accelerate into double digits, indicating a healthy outlook for the Indian markets.
