Mumbai: Early results from India Inc’s December quarter showed a muted earnings season as one‑time charges tied to the new labour code and other transitional costs weighed on profits, industry analysts said.
About 10 Nifty 50 firms have reported their results so far, mostly IT companies and few banks. Analysts said there were no upside surprises in the results, with most companies delivering mixed results or falling short of expectations.
A major drag on corporate earnings was the transition to the labour code, which took effect in November and introduced changes on wages, workplace safety and social security.
TCS, Infosys and HCL together incurred over Rs 4,373 crore in one‑time charges related to implementation of the new rules, contributing to double‑digit moderation in profit for the quarter.
Despite the short-term pressures on profitability, IT companies saw improving demand conditions, with artificial intelligence moving from experimentation to operational deployment and influencing deal pipelines and hiring.
Major IT companies have either revised or raised their revenue guidance for the year, while management commentary from other companies highlighted strong expectations around artificial intelligence-led growth.
In the banking space, the Reserve Bank of India’s intervention on priority sector lending and agriculture book adjustments weighed on earnings but analysts said these were short-term factors.
Non-banking financial companies, auto companies and non-ferrous metal companies’ could emerge as the standout performers during the earnings season, they added.
Tata Consultancy Services, Infosys, HCL Technologies, Tech Mahindra, Wipro, HDFC Bank and ICICI Bank have reported their quarterly earnings.
A “Goldilocks” year is in store for India in 2026 with double‑digit nominal growth, falling rates, stable currency, and easing global risks combining to create a fertile backdrop for equities, led by metals, BFSI, capital goods, and defence, a report said.
The report from HDFC Securities said that 2026 looks forecasted Nifty earnings growth of about 16 per cent for FY27, set a 2026 return expectation of around 11 per cent and put a year‑end Nifty target at 28,720.
(IANS)
