Q2FY26 Earnings Analysis Till Now: Balancing Resilience and Reality

Q2FY26 earnings paint a picture of resilience amid restraint. Exporters thrived on currency tailwinds, while consumer and auto demand softened. Cost control, margin discipline, and healthcare strength defined the quarter, setting the stage for a cautiously optimistic second half [EasyDNNnews:PaidContentStart]

A Quarter of Contrasts
The second quarter of FY26 opened with optimism as Tata Consultancy Services unveiled its numbers on October 9, setting the tone for the earnings season. Yet, as October wound down, a pattern emerged, one that mirrored the complexity of India’s economy. Export-oriented sectors showed resilience, while domestically driven businesses encountered a moderation in demand. 

The overall market narrative remains one of cautious optimism. Corporate India continues to manage a fine balance between margin preservation and growth amid global uncertainty. While the rupee’s depreciation lent support to exporters, consumption-facing sectors such as FMCG and autos witnessed the lingering effects of sluggish rural spending and uneven recovery in discretionary demand. 

By October 26, around 40 per cent of Nifty and Sensex companies had released their results. The numbers so far suggest a steady, if not spectacular, quarter, one where cost efficiency and pricing discipline played a larger role in sustaining profits than volume expansion. 

Among the 19 Nifty 50 companies that have reported so far, profits are split almost evenly between gainers and laggards, with nearly a third maintaining stable numbers. Revenue and operating profit growth show moderate traction, enough to reassure investors that corporate fundamentals remain sound despite patchy demand. 

Across the broader Nifty 500, just over half of the reporting companies recorded profit expansion, a reflection of the divergent realities across sectors. 

Technology and IT

The IT sector, which has been under the scanner for several quarters, showed early signs of stabilisation. The narrative this quarter was less about headwinds and more about steady recovery. Deal momentum held firm, while management commentaries across the top players suggested improving client confidence. 

While demand visibility into the next calendar year remains limited, there are encouraging signs of Order Book strength and operational control. Margins stayed within guided ranges, and hiring picked up modestly after several quarters of contraction. 

Infosys: Infosys reported 2.2 per cent sequential revenue growth in constant currency and 8 per cent year-on-year EBIT growth, broadly aligning with market expectations. The company nudged the lower end of its FY26 revenue guidance from 1–3 per cent to 2–3 per cent, reflecting confidence in its large deal wins. Headcount increased by 2.5 per cent, signalling preparation for upcoming deal ramp-ups. Margins held at 21 per cent, aided by efficiency programmes and currency gains. 

Wipro: Wipro’s results were in line with expectations on revenue, up 0.3 per cent sequentially, though EBIT remained flat year-on-year. Management maintained a cautious tone, guiding for modest revenue movement in the coming quarter as large deals gradually transition into execution. Margins at 16.4 per cent were stable after adjusting for a one-off client Bankruptcy. 

LTIMindtree: LTIMindtree stood out among peers with 2.4 per cent quarter-on-quarter revenue growth and a 13 per cent rise in EBIT, driven by a 160 basis-point margin expansion. The company’s clear commentary on sustained demand and improved utilisation bolstered investor confidence. It expects growth momentum to continue into the next quarter, backed by a strong pipeline and disciplined cost management. 

Overall, the IT pack navigated the quarter with stability. While not a breakout season, it marks a turn towards normalisation — a welcome shift after the turbulence of the past year. 

Banking and Financial Services 

The financial sector delivered stable yet measured performance in Q2FY26. Lending growth remained healthy across private and mid-tier banks, though margins were marginally pressured by rising funding costs. Asset quality held firm, aided by robust provisioning and prudent credit assesSMEnt. 

Larger private lenders demonstrated balance-sheet discipline, while mid-sized banks stood out for operational efficiency. On the non-bank side, asset managers continued to benefit from buoyant inflows into equity-oriented products, underscoring sustained retail investor participation. 

Karur Vysya Bank: Karur Vysya Bank’s Q2 performance was a standout among mid-tier lenders. The bank achieved an annualised Return on Assets (ROA) of 1.81 per cent, surpassing its full-year guidance, with net profit up 21.2 per cent YoY to ₹57,396 lakh. 

Net Interest Income (NII) rose 18.7 per cent YoY, driven by strong deposit mobilisation and disciplined cost management. The cost-to-income ratio improved to 42.6 per cent, well below guidance, while asset quality remained exemplary, Net NPA at 0.19 per cent and provision coverage at 96.7 per cent. 

HDFC Bank vs ICICI Bank: As the September quarter unfolded, India’s two largest private sector lenders — HDFC Bank and ICICI Bank — painted contrasting pictures of strength. Both reported steady performances, but their trajectories diverged across profitability, margins, and deposit dynamics. 

On the growth side, ICICI Bank outpaced HDFC in loan expansion, 10.6 per cent vs. HDFC’s 9.9 per cent, even as HDFC Bank recorded higher deposit growth at 12 per cent, compared to ICICI’s 9 per cent. 

The loan-to-deposit ratio (LDR) revealed the sharpest contrast. ICICI’s LDR stood at a comfortable 87 per cent, while HDFC’s was higher at 98 per cent, an improvement from the postmerger level of 110 per cent but still up from 96 per cent in Q1FY26. A rising LDR signals tighter liquidity and could constrain HDFC’s loan growth in the near term, forcing it to intensify deposit mobilisation efforts. 

On margins, HDFC Bank’s core Net Interest Margin (NIM) fell 8 basis points sequentially to 3.49 per cent, with its CASA ratio holding in the mid-30s, indicative of moderate low-cost deposit traction. In contrast, ICICI Bank’s NIM remained stronger at 4.3 per cent, slipping only 4 bps sequentially, supported by a CASA base of 39.2 per cent that continues to underpin a healthier funding mix. 

Both lenders reported sound asset quality, though the drivers varied. HDFC Bank’s improvement was aided by a single large corporate upgrade, which, while positive, may not represent a broad-based trend. ICICI Bank’s asset-quality gains, by contrast, appeared more organic and diversified, reflecting continued strength in its retail and SME portfolios. 

In essence, HDFC Bank showcased scale and stability, but faces near-term deposit and margin challenges. ICICI Bank, meanwhile, delivered a cleaner operational profile, supported by stronger liability management and consistent execution. 

HDFC AMC: HDFC Asset Management Company reported revenue of `1,026 crore, up 1.9 per cent from expectations, with Profit After Tax at `720 crore, 12.7 per cent above estimates. The share of equity in assets under management rose to 61 per cent, supported by strong market inflows. Operating expenses were slightly higher due to promotional activities, but profitability remained strong thanks to favourable tax adjustments that lowered the effective rate to 18 per cent. 

The financial sector’s tone remains measured, growth is present, but tempered. With borrowing costs likely to ease in the second half, a gradual acceleration in retail lending and fee-based income could emerge as the next tailwind. 

Healthcare and Diagnostics

Healthcare stocks outshone most others this quarter. Strong execution, cost discipline, and strategic diversification helped the sector maintain double-digit revenue expansion. Diagnostic companies, in particular, benefited from operating leverage and high-margin service mixes, while pharma manufacturers capitalised on export opportunities and niche product launches. 

Thyrocare Technologies: Thyrocare delivered a stellar quarter, comfortably exceeding its own guidance. Consolidated revenue grew 22.1 per cent year-on-year, while EBITDA margin expanded 630 basis points to 34.4 per cent. This resulted in a 79.9 per cent surge in PAT. Imaging services turned profitable, with earnings of ₹1.8 crore compared to a loss in the prior period. Operating cash flow climbed 42.7 per cent to ₹127.1 crore, underscoring efficiency. Management declared a 2:1 bonus issue and an interim dividend of ₹7 per share, reaffirming confidence in future growth. 

Laurus Labs: Laurus Labs recorded a strong rebound with revenue up 35.1 per cent year-on-year to `1,650 crore. Adjusted PAT rose 38 per cent, supported by a better mix in formulations and contract research segments. The formulations segment surged 58 per cent YoY, while the CDMO business matched that growth. Margins expanded nearly 1,000 basis points to 24.4 per cent, reflecting operational efficiency and cost optimisation. 

Cipla: Cipla announced a marketing and distribution partnership with Eli Lilly for Yurpeak — a brand of Tirzepatide — marking its entry into the obesity management segment. While financial details for the quarter were not emphasised, the move adds a new dimension to its domestic business, widening therapeutic coverage and revenue streams. 

Healthcare, once again, demonstrated that resilience and innovation can coexist. It continues to lead corporate India’s earnings recovery both in growth quality and cash generation. 

Industrials and Materials

The industrial and materials complex exhibited mixed momentum. Metals companies benefited from cost control and currency trends, while cement producers grappled with seasonal weakness and soft demand from the Real Estate sector. Despite challenges, the broader industrial ecosystem maintained stability through balance sheet improvements and operational discipline. 

Jayaswal Neco Industries: Jayaswal Neco made notable progress on debt reduction, repaying ₹400 crore during the first half of FY26. The move strengthens its financial footing in a capital-intensive industry and signals a shift towards sustainable growth. While detailed quarterly figures are awaited, the deleveraging initiative is a positive structural signal. 

Hindustan Zinc: Hindustan Zinc’s Q2FY26 earnings were broadly in line with expectations. Revenue stood at ₹8,550 crore, while EBITDA was ₹4,450 crore. The EBITDA margin expanded by over two percentage points sequentially, reaching 52 per cent, aided by a 7.2 per cent decline in cost of production and an increased share of renewable power. Silver prices rose sharply during the quarter, boosting realisations, while zinc volumes remained stable. The company’s focus on cost management and portfolio optimisation continues to support profitability. 

While near-term demand remains uneven, the sector’s underlying fundamentals — especially in metals — appear intact, supported by infrastructure activity and export resilience 

Energy and Conglomerates

Conglomerates with diversified earnings streams provided the market with muchneeded stability this season. Strong refining margins, retail growth, and expanding digital services offset volatility in upstream businesses. 

Reliance Industries: Reliance Industries reported consolidated EBITDA that was 4 per cent above forecasts, with year-on-year growth of 17 per cent. 

▪️Digital Services (Jio): Revenue and EBITDA were marginally ahead of estimates. Average Revenue Per User (ARPU) improved to ₹211.4, supported by steady subscriber additions that took the total to 506 million. Half of Jio’s wireless data traffic now comes from 5G users. 

▪️Retail: Performance was buoyant, with both revenue and EBITDA growing in the high-teens range. Segments like grocery, fashion, and electronics showed double-digit growth, while the quick-commerce vertical expanded 42 per cent sequentially. 

▪️Oil-to-Chemicals (O2C): EBITDA increased 21 per cent year-on-year, supported by higher fuel cracks and maximised crude throughput. 

▪️Upstream: A minor lag was seen due to lower gas output from the KG-D6 fields 

▪️New Energy: The Solar cell gigafactory project moved into its initial commissioning phase, highlighting Reliance’s continued pivot towards green energy. 

Reliance once again underscored the advantage of diversification — delivering consistency across cycles and cushioning investors from sectoral volatility. 

Automobiles and Ancillaries 

The automobile sector remained largely subdued through most of the quarter, weighed down by uneven retail demand and elevated dealer inventory. The slowdown was largely attributed to the GST rate cut announcement on August 15, which prompted consumers to defer purchases until its implementation on September 22, 2025. However, momentum began to return towards the end of September and through October as festive-season buying, combined with GST benefits, lifted sales — a trend likely to reflect more clearly in the next quarter’s earnings. Ancillary players outperformed OEMs, supported by export recovery, product innovation, and cost discipline. 

Ceat : Ceat delivered a strong quarter with consolidated revenue rising 14 per cent year-on-year to ₹3,772 crore and net profit surging 52 per cent to ₹185 crore, beating estimates. EBITDA jumped 39 per cent to ₹506 crore, and margins expanded 240 basis points to 13.4 per cent, driven by robust OEM and international business performance. 

Shanthi Gears : Shanthi Gears posted a net profit of ₹21.5 crore, down 16 per cent year-on-year, as revenue slipped 15 per cent to ₹132 crore. Despite softer earnings, the company reported a 7 per cent rise in new orders to ₹138 crore, maintained a 46 per cent ROIC, and generated healthy free cash flow of ₹12.7 crore, underscoring operational strength. 

Swaraj Engines : Swaraj recorded a net profit of ₹50 crore, up 11 per cent year-on-year, on revenue of ₹504 crore. The company sold 51,164 engines in Q2 and achieved its highest-ever halfyearly sales of 1,00,204 units, reflecting consistent demand from the tractor segment and solid manufacturing efficiency. 

Overall, while demand remains patchy, steady execution and festive tailwinds suggest the automobile sector could be approaching an inflection point heading into the second half of FY26. 

FMCG 

The fast-moving consumer goods sector experienced a challenging quarter marked by muted volume growth and pricing pressure. Companies continued to rely on premium product mixes and cost optimisation to protect margins. 

Colgate-Palmolive (India): Colgate reported revenue of ₹1,507 crore, down 6.3 per cent year-on-year, and Profit After Tax at ₹328 crore, a 17 per cent decline. Weak urban demand and transitory disruptions from GST rate changes weighed on performance. The management highlighted strong traction in its premium oral care range, particularly Colgate Visible White Purple. A recent GST reduction on oral care products, from 18 per cent to 5 per cent, is expected to improve affordability and support gradual recovery in the second half. 

Hindustan Unilever (HUL) : HUL reported a 3.6 per cent rise in consolidated net profit at ₹2,685 crore for the quarter ended September 30, 2025, compared with ₹2,591 crore a year earlier. Revenue from operations grew 2.1 per cent to ₹16,034 crore, up from ₹15,703 crore in Q2 FY25. Operating performance, however, remained under pressure. EBITDA declined 1.3 per cent to ₹3,522 crore, while margins contracted to 21.97 per cent, compared with 22.73 per cent in the same period last year. Management commentary indicated subdued urban demand and cautious rural recovery, though expectations remain positive for the festive season and improved consumption in H2FY26. 

Across the FMCG board, companies are navigating through a transitional phase — managing cost structures effectively while waiting for a broader demand pickup, especially in rural markets. 

The Road Ahead : The first half of FY26 has underscored the adaptability of Indian corporates. Even in a phase of uneven growth, most large enterprises have demonstrated cost discipline and strategic agility. Exporters have provided stability, technology is regaining rhythm, and healthcare continues to shine. As more companies unveil their results, the market’s focus will shift from quarterly numbers to forward guidance. With monetary easing in progress and festival-driven consumption expected to lift sentiment, the stage appears set for a stronger finish to FY26. Investors would do well to watch for sectors combining pricing power with balance sheet strength — the traits that have defined this quarter’s quiet winners. 

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