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Corporate Earnings Q4FY26: Large-caps in line; Mid & Small caps continue to outshine

ICICIdirect Research 15 May 2026 DISCLAIMER

25 Nifty companies (i.e. half the index constituents count of 50) have come out with their Q4FY26 results till date.
At the index level, performance is broadly in line with street expectation of lower double digit topline growth and single digit PAT growth.
Topline growth for the quarter till date is pegged at 13.2% YoY while Adjusted PAT growth is pegged at 5.7% YoY.
This is encouraging amidst fluid global macro-economics and geo-political tensions.
At the index level, financials have led the growth charge with 9.2% adjusted bottom-line growth while non-financials posted a tepid show with 3.1% adjusted PAT growth
For the non-financials operating margins improved 20 bps QoQ at 18.6% with operating leverage (gains of 200 bps) mitigating the raw material hit (up 180 bps QoQ)
Notably broader markets reported much better numbers till date.
Midcaps reported an earnings growth of 11% YoY while the same for small cap domain stood at 35% YoY (ex- CPCL; it is still healthy at 28% YoY)
All listed companies put together reported a PAT growth of 13% YoY, interestingly however, excluding Nifty 50 the same stood at healthy 28% YoY
This is third consequent quarter of double-digit earnings growth for the listed space which in Q2FY26 stood at 12%, Q3FY26 stood at 18% and Q4FY26 (till date) stood at 13%

As on date, we stick to our Nifty target of 29,500 over next 12 months, valuing the index at 21x PE on FY28E EPS of ₹ 1,415
We shall revisit aggregate Nifty EPS and Nifty target as the result season concludes.
Most of the companies in the manufacturing set up reported in-line performance in Q4FY26. They remain upbeat on demand prospects with limited impact seen from ongoing geo-political issues. On the margins front, they did indicate about rise in RM costs primarily on account of rise in crude derivatives and INR depreciation, however remained confident of price hike transmission to mitigate large part of RM rise impact
Nifty 50 trades at ~17x P/E on forward basis vs. earnings CAGR of ~16% (PEG:1.1x); while Nifty Mid-Cap trades at ~22x P/E on forward basis vs. earnings CAGR of ~15% (PEG: 1.4x).
Nifty Small Cap index trades at ~17x P/E on 2-yr forward basis vs. earnings CAGR of ~23%; i.e. attractive (0.8x PEG) vs. its peers. This space looks most attractive to us

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