Are Large-Caps Surpassing Small-Caps in Q4 FY25 as Investors Seek Stability?
Click to start listening
Synopsis
In an intriguing turn of events, a recent report reveals that large-cap companies have outperformed their mid and small-cap counterparts in Q4 FY24-25. This shift towards stability indicates a broader trend among investors seeking safer bets amidst market uncertainty. Discover the implications of this trend on various sectors and the outlook for the next fiscal year.
Key Takeaways
- Large-cap companies show 6% YoY growth in earnings.
- Mid-cap firms have a modest 2% increase.
- Small-cap companies face a 16% decline in earnings.
- Strong performances noted in retail, pharma, and consumer durables.
- 28% of companies forecast EPS upgrades for FY26.
Mumbai, June 14 (NationPress) Large-cap firms have outperformed their mid and small-cap counterparts in terms of earnings growth during the fourth quarter of FY24-25, according to a recent report released on Saturday.
The analysis conducted by Equirus Securities covered 270 prominent listed companies and revealed that large-cap stocks demonstrated remarkable resilience within a mixed market landscape, achieving earnings and profits that exceeded expectations.
This performance resulted in a consolidated year-on-year (YoY) growth of 6 percent in EBITDA and 4 percent in earnings, while revenues aligned with estimates, increasing by 5 percent compared to the same quarter last year.
When examining market segments, the disparity became evident. Large-cap companies achieved a robust 6 percent growth in earnings year-on-year.
In contrast, mid-cap firms recorded a modest 2 percent increase, while small-cap companies experienced a significant 16 percent decline in earnings YoY.
This pattern indicates that investors are progressively gravitating towards well-established, stable companies amid uncertain market conditions.
The report also highlighted sector-specific variances. Excluding oil marketing companies (OMCs), EBITDA and earnings for the remaining sectors still experienced growth of 5 percent and 3 percent respectively.
Growth figures were even more robust when excluding banking, financial services, and insurance (BFSI) firms, with EBITDA and earnings climbing by 7 percent and 6 percent YoY in that category.
Noteworthy performances were recorded in sectors such as retail, pharmaceuticals, capital goods, and consumer durables.
In contrast, the FMCG, infrastructure, IT, and automotive sectors faced slower growth during this quarter.
Looking ahead to the next fiscal year (FY26), approximately 28 percent of the companies analyzed received upgrades in their Earnings Per Share (EPS) projections.
Sectors such as capital markets, chemicals, defense, metals, and textiles were at the forefront of these upgrades, according to the report.
Point of View
I believe this report underscores a significant market shift. The resilient performance of large-cap companies amidst uncertainty highlights the importance of stability for investors. It reflects a cautious approach, where established firms are favored. This trend warrants close attention as it shapes the investment landscape moving forward.
NationPress
15/06/2025
Frequently Asked Questions
Why are large-cap companies performing better?
Large-cap companies have demonstrated greater resilience and stability in uncertain market conditions, resulting in stronger earnings growth compared to mid and small-cap firms.
What sectors are driving growth?
Sectors such as retail, pharmaceuticals, capital goods, and consumer durables have shown robust growth, while FMCG, infrastructure, IT, and auto sectors have experienced slower growth.
