Mint Explainer | What India Inc’s Q1 results mean for market investors
Mint It takes a look at the winners and losers of the quarter result season and important inferences for investors.
How did Indian Inc perform in the first quarter of the 26 financial year?
It was a beginning of the financial year. BSE500 companies (except oil marketing companies) noted a 7% upper line and snow growth. This single -digit growth tendency was also common in FY25. Nuvama Corporate Stocks, “BSE500 profits now agreed with the weak upper line. Moderation in profit is now seen throughout the board of directors.”
After an increase in the previous quarter, the profit growth of small and middle caps slowed down. Frontsine companies were marginalized. The NIFTY50 provided 8% net profit growth compared to 3% in the previous quarter. However, the analysts in Motilal Oswal pointed out that Nifty has reported one -digit gain growth for the fifth quarter since the pandemi of Nifty (June 2020).
“Five stylish company – Bhatik Airtel, Reliance Industries, SBI, HDFC Bank and Icıcı Bank – contributed to 77% of increasing yoy accumulation in earnings. On the contrary, coal India, Tata Motors, Indusind Bank, Ongc, HCL technologies, Kotak Mahindra Mahindra Bank, Axis Bank, Winning, Winning, Winning.
Interestingly, several companies reported other revenues higher than expected, which increases 31% for Nifty50 companies in the first quarter.
How does the banking sector charge in this quarter?
Banks witnessed more weaknesses in credit growth, inspection of net interest margins (NIMS) and stress of asset quality in several departments such as microfinans.
Credit growth, the first quarter seasonality, care in the unsecured segment and retail credit growth were affected by stable moderation (+12% yoy), while the industry was suppressed.
Kotak Corporate Stocks, “Housing loan and vehicle loan growth is more softened by 10% and 6%, such as credit cards, such as credit cards unsecured credit growth of 1QFY26’da 30% to 7% to 7% moderate.”
While most industrial sectors continue to witness the silent loan demands, NBFCs have been further inspected between 1ÇK26 and 3%.
Real estate loans (+15% YOY) and trade loans (+11% yoy) are among a few pockets seeing strong bank loans in non -withdrawal segments.
However, most banks have reported good deposit growth that private banks have left behind public sector peers. However, banks received inanimate growth in low -cost CASA beds added to margins.
“NIM COMPRESSION WAS Imminent Duration The Quarter, with Repo Rate Actions Reflecting on Yields. Howver, Larger Private Banks (Ex-Kotak) BPS) on the other Hand, Most Mid-Small Banks and SFBS (40-60 BPS) Reported Sharp Margin Contraction, Further Aggravated by Higher Ilizers.
What tendencies were seen in the field of consumption?
FMCG players, both income and volumes had a good show by recording healthy gains. Green exiles in urban consumption, RBI’s ratio deductions, the income tax reduction of the budget and the lowest level of retail, which is the lowest level of eight years, are caused by higher optional income.
Rural growth continued its stable momentum. However, the early start of the monso, ventilated beverages, fruit juices and sun/skin care products affected demand in categories. Biscuits, noodles, kitchen foods, edible oil, tea and coffee and solid demand was seen.
Companies also hopes for a fixed raw material environment in 26 financial years by preparing the ground for margin improvement from the second quarter. However, EBITDA performance in the first quarter is restricted by high raw material inventory costs and price fluctuations.
However, forgetting consumer durable categories such as air conditioners and coolers, which were exposed to a 30% decrease due to the early onset of the monsoon, has written. Fans and refrigerators also witnessed contraction. Cables and cables segment, high infra demand and increased copper prices through trade through upstreaming via double -digit volume growth.
Premiumization has been an increasing tendency among the categories that maintain margins. For cars, the increase in income was supported by solid demands and higher priced offers for SUVs, while the general EBITDA performance became silent due to repressed volumes and cost prints.
What was the report card of the IT sector like?
In one word, overwhelming. Four of the five largest five CT companies have made a sequential decrease in income on a fixed money basis. Even the middle -layer companies that have performed better than larger peers recently, the increase in income in 26 quarters compared to the last few quarters is slowing down.
The best three players also reported contraction in EBIT margins compared to the previous year, which reflects the wide -based prints on profitability. For the last few years, companies have managed to maintain margins during demand rationalization, operational efficiency and wage corrections.
However, after about three years of silent growth, he said that these arms were largely exhausted.
In addition, Genai is Geneni, which raises traditional personnel models and shakes the foundations of CT Services pricing.
“In 35-45% of the industrial revenues due to AdM (application development and maintenance services), even partial automation creates a significant head wind. 10-15% of the existing revenues started to get more for less for the lesser, we have predicted that productivity can make productivity structural difficulties.” He said.
“The old business deflation of the Indian CT sector is not something new: biting is the lack of a new technology cycle to replace the ancients. During previous transitions (for example, from the IMS cloud or from the old application developing), sellers quickly scaled new offers that compensate for more than the decline in old business fields,” he added.
How did other major sectors perform in the first quarter?
Capital goods companies reported some moderation in their local revenues, but the powerful electric equipment players, better pricing power and solid execution directed by a positive product mixture, high order books of all times and multi -year high working margin levels continued to enjoy.
“Order flow for the capital goods sector was better than our expectations. Especially with the ruling T&D and the ongoing momentum in the renewable area. The entrances of EPC companies increased by 28%.
While cement companies witnessed high single -digit volume growth behind advanced government expenditures in highway and highway projects, price increases helped the facts. However, power and fuel costs increased in the quarter.
Larger pharmaceutical companies followed a good demonstration, even if exports saw a weak growth. Companies are concerned about the US policy changes about tariffs.
Despite the decrease in global crude oil rates, OMCS reported the growth of powerful EBITDA and PAT as marketing margins increase, since the retail prices have not changed. However, City Gas Distribution (CGD) has recorded weak gains due to the decrease in gas allocation and more powerful LNG prices that damage its margins.
Real Estate players, both volume and value on the basis of the housing demand continued to accelerate. Pre -selling strong growth was directed by companies such as DLF, Prestige and Sobha, which removes footprints from their markets.
“However, we noted that six major subway cities have seen a moderate in the last few months and that sales volumes have been weakened in total in the last few months. As a result, inventory levels have increased in recent months.”
With the execution of a strong order book, the total income increased by 66%and reported another star quarter with the execution of a strong order book.
What does the quarter numbers mean to investors?
In general, the quarter result season was a reminder that reminds us that corporate India faces more winds than tail winds at this point. The highest -level growth of the BSE500 remained single -digit for the ninth quarter in a row. Even the income increase for nuclear companies (old commodity and BFSI) was suppressed in the second quarter.
After the acceptance, profit recovery was largely directed by a lower interest expense and margin expansion behind the better pricing power. However, for many sectors close to decadal summits, margins look cloudy for profitability.
“However, we think that it may be difficult to achieve unless the consensus foresees more margin expansion for most sectors-unless it heals or a supply side of oil prices,” Nuvama said.
Small and middle cover companies also face difficulties on the margin front and can see more disadvantages than large cover peers.
“For FY26, consensus foresees a significant leap compared to large covers in the profitability of SMDs. Growth, we think they can be disappointed even with some local indicators, we think they can be disappointed evenly with some local indicators,” he added, “he added.”
If the profits of small and middle cover companies continue to disappoint compared to large covers, this reveals risks for high valuation premiums.
However, some analysts believe that the worst is left behind, even if the seriousness of gains continues to this quarter, even if the tendency to decline in the first quarter is controlled in the first quarter.
“Nifty-50 EPS growth is expected to rise to ~ 9% in MY26 (against anemic against 25%)-a possible healing due to stimulating financial and monetary measures in the macro environment, the Indian Self -ware Market believes that it should have changed in a small way for the last two months.
India Inc is likely to increase this festival season.
In addition to other reforms, the government is trying to scrape 12% and 28% GST signs.
“Rationalization of GST rates should increase optional consumption by significantly reducing prices for end consumers. Significantly, decreases in GST rates and indirect tax structures can help reduce the maximum burden in nature.” F2025.
“It is also possible that a healing tendency in total demand will increase the sense of work and ultimately support higher capacity use rates to be well increased for the labor market appearance and private Capex activity,” he adds.
