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Informist, Monday, Mar. 2, 2026

 

By Gopika Balasubramanium

 

MUMBAI - A strong showing by the bottom 300 companies in the Nifty 500 once again lifted the overall performance of the index's universe in the December quarter, helping it to outdo the Nifty 50 and Nifty 200 sets. Among these 300 companies, there were 144 whose net profit growth exceeded the aggregate profit growth of the Nifty 500 set. Likewise, the sales growth of 171 of the bottom 300 companies exceeded the combined revenue growth posted by the larger group.

 

The over 29% year-on-year rise in adjusted net profit of the bottom 300 companies drove the 18% growth in cumulative bottom line of the Nifty 500 companies. In contrast, the Nifty 200 set cumulatively reported year-on-year growth of 16% in net profit and the Nifty 50 group reported a 9% rise. As such, the bottom 300 companies outperformed the top 200. The 18% rise in net profit of the 500 companies was also better than the 14% growth they had cumulatively reported in the September quarter. In absolute terms, the adjusted cumulative net profit of the Nifty 500 companies was INR 4.25 trillion.

 

The aggregate top line of the 500 companies for the December quarter grew a little over 10% on year to around INR 36 trillion. This was largely driven by exponential growth in sales of energy companies, which accounted for 29% of the group's top line. The net sales growth was largely in line with the 10% growth posted by Nifty 200 companies and slightly better than the 9.3% cumulative growth posted by Nifty 50 companies. The 11% growth in net sales posted by the bottom 300 companies boosted the top line growth of the Nifty 500 group. 

 

Of the 500 companies, 239 reported a profit growth higher than the aggregate 18% growth reported by the whole set. On sales, 287 companies posted higher growth than the cumulative 10% growth posted by the 500 companies. During the December quarter, 76 of the 500 companies reported a decline in sales, down from 92 that had reported a fall a year ago. The adjusted net profit of 100 of the 500 companies declined during the quarter, significantly lower than 151 companies in the year-ago quarter. However, 25 companies reported a loss for the quarter, a shade more than 24 in the year-ago quarter.

 

Analysts' estimates were available for only 418 of the Nifty 500 companies. The cumulative net profit of those 418 companies for the December quarter rose around 18% on year, better than the 11.5% growth expected by the Street. Their cumulative net sales grew 10%, exceeding the expected growth of 8%. Of the 418 companies, 292 met estimates for their revenue and 276 met their net profit forecasts.

 

Most labour-intensive companies made higher provisions during the quarter on account of the new labour codes being implemented. According to these labour codes, which came into effect from November, basic pay, dearness allowance, and retaining allowance, if any, must together constitute at least 50% of an employee's total cost to company. The companies must now pay gratuity and provident fund even to contractual staff. Of the 500 companies, 352 recognised labour code costs in their profit and loss statement. Of these 352, only 225 reported the expenditure related to the labour codes as a one-time cost.

 

SHINING SECTORS

The sectors that outdid the aggregate performance of the Nifty 500 companies in the December quarter on both net profit and sales were basic industries, consumer goods, and services. These three sectors logged double-digit growth on year in adjusted net profit for the quarter as well as in net sales, which put the aggregate performance of the Nifty 200 and Nifty 50 sets on both metrics in the shade.

 

At 30%, the growth in cumulative net profit of the 108 basic industry companies in the Nifty 500 was the best among the sectors. The growth was way better than the 17% growth they had reported a year ago. In absolute terms, these companies together reported a net profit of INR 561 billion. These 108 basic sector companies, which include those from the defence, metal and mining, capital goods, construction, cement, and real estate sectors, posted sales growth of nearly 14%, a 13-quarter high.

 

The strong growth reported by the basic industry sector was led by 17 metal companies, which accounted for 52% of the top line and 49% of the bottom line of the sector. These 17 metal companies posted a 50% jump in their adjusted net profit and a rise of over 13% in sales. Excluding them, the remaining 86 basic industry companies posted a 14% rise in sales and a relatively modest 15% rise in cumulative net profit. 

 

The 49 consumer companies in the Nifty 500 also showcased impressive performance in the December quarter, despite lower-than-expected pick-up in demand after the goods and services tax was cut in September. Their adjusted cumulative net profit grew 19% on year, registering the fastest growth in 14 quarters. The sector includes fast-moving consumer goods, consumer durables, diversified companies, and jewellery companies and registered 14% year-on-year growth in sales. The overall performance of the sector was boosted by better earnings from two jewellers, Titan Co. Ltd. and Kalyan Jewellers Ltd., which together accounted for 16% of the top line and 10% of the bottom line of the consumer group. Without these two, the net sales of the consumer pack grew 10% and the adjusted net profit grew 15%.

 

ITC Ltd., which is a  consumer sector heavyweight in terms of both top line and bottom line, reported moderate earnings for the quarter with just 6% sales growth and less than 10% growth in adjusted net profit. Without ITC, the other 48 consumer companies saw their net profit rise 23% and net sales grow 15%, better than the numbers with the cigarette maker.

 

The 40 services sector companies reported near 27% growth in aggregate adjusted net profit, a seven-quarter high. The growth is a turnaround from the 14?cline reported in the September quarter as well as the marginal fall a year ago. As for net sales, these 40 services firms posted 28% growth, a 14-quarter high, same as in the trailing quarter and higher than the 15% rise in the year-ago quarter.

 

Eternal Ltd., Avenue Supermarts Ltd., and Redington Ltd. which are the sector heavyweights and make up 52% of the top line and 25% of the bottom line of the services group, skewed the sector's performance. Without the three heavyweights, the remaining 37 companies posted 30% growth in adjusted net profit. In contrast, the three companies gave a boost to the services companies' net sales growth. Without them, the remaining 37 reported just 20% growth in net sales.

 

THE UNDERPERFORMERS

Companies in the transport sector posted the weakest earnings for the December quarter. The 44 companies from this sector in the Nifty 500 saw their cumulative net profit rise just 4%. The poor show was largely due to the disappointing performance of Tata Motors Passenger Vehicles, which was yet to recover from the disruption at its Jaguar Land Rover unit. The 4% aggregate growth in net profit was a turnaround from the 19?cline in the trailing quarter but underwhelming when compared to the 21% growth posted by the group a year ago.

 

The net loss of INR 19 billion that Tata Motors Passenger Vehicles posted for the December quarter cast a shadow on the performance of the transport sector, which includes shipping, airport, automobile, port, and automobile ancillary companies. Without the carmaker, the transport group would have recorded a rise of over 29% in adjusted cumulative net profit. 

 

The 44 transport companies saw their cumulative revenue from operations rise 7% on year. The impact from Tata Motors Passenger Vehicles was felt here, too. The 26?cline in the company's top line was the biggest drag on the sector's sales performance. Excluding the Jaguar-maker, the remaining 43 companies posted a solid 19% growth in net sales.

 

Another sector that reported dismal performance in the December quarter was chemicals and pharmaceuticals. Among the 82 chemical and pharmaceutical companies that are part of the Nifty 500, the adjusted net profit of 24 declined on year while five companies together reported a net loss of INR 4 billion. The subdued performance of sector heavyweights Cipla Ltd., Grasim Industries Ltd., and UPL Ltd., which account for 14% of the group's top line, also dragged the group's performance down.

 

The cumulative net profit of the 82 companies grew 13% on year during the quarter under review, lower than the 18% growth posted by the Nifty 500 companies and the 16% growth by the Nifty 200 set. Leaving the three sector heavyweights aside, the remaining 79 companies posted 19% growth in the collective bottom line.

 

In net sales, too, 24 of the 82 companies put up a dismal show, dragging the on-year growth of the group as a whole down to 13%. Excluding them, the sales growth of the chemicals and pharmaceuticals group was 15% and the net profit growth was 29% on year.

 

The following table gives a snapshot of the sector-wise performance of the Nifty 500 companies for the December quarter:

 

Sector	Number of companies	Oct-Dec 2025		Oct-Dec 2025		Oct-Dec 2025
		Adjusted PAT		Net sales		Total expenses
		(% change)		(% change)		(% change)
		YoY	QoQ	YoY	QoQ	YoY	QoQ
Nifty 500	500	17.93	10.44	10.25	5.39	11.89	5.80
Nifty 200	200	16.31	11.30	10.07	5.87	11.51	6.16
IT, media, telecom	42	16.81	8.98	9.10	3.45	7.53	3.89
Basic industries	108	30.35	7.58	13.81	5.74	12.76	5.28
Financial services	95	15.48	10.05	12.91	4.20	24.42	8.04
Energy	40	22.47	7.15	5.15	6.74	3.90	6.28
Consumer	49	19.23	11.49	14.04	5.47	14.17	5.27
Transport	44	3.88	47.42	7.25	6.96	8.63	4.70
Services	40	26.70	142.57	28.25	11.13	28.69	8.91
Pharma & chemicals	82	12.71	-8.97	12.60	-0.83	12.93	0.79

 

 

Data compiled by Vinod Bhovad

Edited by Rajeev Pai

 

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