Q3 results fail to soothe market

If investors were hoping that corporate earnings would offer some support to equity markets, they are in for a disappointment.

- Harsha Jethmalani

After a stellar FY24-largely buoyed by favourable input costsIndia Inc.'s profit growth has tapered.

For BSE500 companies (excluding oil retailers), year-on-year profit growth slowed to 8% in the December quarter (Q3FY25), aligning with muted top-line growth, according to a Nuvama Research analysis. Most sectors outside banking, financial services, and insurance saw an earnings slowdown. Revenue growth at 8% marked the seventh straight quarter of sub-10% expansion.

In short, despite modest expectations, the Q3 earnings season was underwhelming, hurt by weak urban consumption and fading benefits from lower input costs. As a result, earnings downgrades continued.

"Contrary to our expectations, earnings forecasts did not hold up well during the quarter," said an Emkay Global Financial Services' 16 February report. It highlighted that consensus Nifty earnings per share (EPS) estimates for FY26 were cut by 3.9% since 1 January.