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As the Q3 results season begins next week, India Inc is poised to post its strongest earnings growth in the past two years
Q3 Earnings
As the Q3 results season begins next week, India Inc is poised to post its strongest earnings growth in the past two years, with Motilal Oswal projecting a 16% year-on-year profit increase for companies within its coverage universe. However, brokerages caution that a broad-based recovery may remain elusive for exporters and sectors such as chemicals, pharmaceuticals, IT, BFSI, FMCG and EMS.
A review of earnings estimates by Nuvama, Kotak Institutional Equities and Motilal Oswal indicates that at least nine companies are likely to report profit declines of 50% or more year-on-year in the October–December quarter of FY26.
IndusInd Bank is expected to record the sharpest fall, with core profit projected to plunge 92% year-on-year to Rs 113 crore from Rs 1,401 crore in the same quarter last year. The private lender continues to face pressure from asset quality issues and elevated provisions.
In the specialty chemicals segment, PI Industries is headed for a tough quarter, with profit expected to drop between 69% and 80% year-on-year. The agrochemicals major is grappling with weak pricing in key molecules, especially after profit warnings from its Japanese partner Kumiai Chemicals on Pyroxasulfone, one of its flagship products.
The textile sector is also under severe stress, with Welspun Living likely to slip into losses. The home textile exporter’s profit is expected to crash 99% year-on-year to just Rs 10 lakh from Rs 120.8 crore, hurt by tariff pressures and higher cost absorption amid a weak demand environment, according to Nuvama.
GAIL India, the country’s largest natural gas transmission company, is projected to see its core profit fall 55% year-on-year to Rs 1,742 crore from Rs 3,867 crore. Weakness in its LPG and petrochemical segments, driven by low regional LPG prices and continued losses in the petchem division, is expected to weigh on profitability.
In pharmaceuticals, NATCO Pharma is likely to report a 73% year-on-year decline in profit. While its domestic pharma and agrochem businesses are expected to post modest growth, the much lower contribution from gRevlimid compared with last year’s high base is set to hurt margins.
Orchid Pharma is also expected to see a 73% year-on-year fall in profit, impacted by slower exports and pricing pressure in key markets. Its EBITDA margin is likely to contract sharply to around 4.4%.
Bajaj Electricals, facing weak consumer demand and adverse operating leverage, is expected to report a 52% year-on-year drop in profit as competitive intensity continues to pressure margins.
Sapphire Foods India, which operates Pizza Hut and KFC outlets, is expected to see its net profit decline 62% year-on-year. The QSR operator is battling weak same-store sales growth, with KFC likely to post flattish SSSG and Pizza Hut expected to record an 11% decline.
KNR Construction is projected to report a 55.7% year-on-year fall in adjusted PAT to Rs 40 crore, according to Motilal Oswal. However, its operating margin is expected to improve by 160 basis points year-on-year on better execution after a weak Q2.
Overall, weak global growth, margin pressure from rising competition, and muted consumer demand in select segments are the key drivers of the earnings slowdown. While sectors such as industrials, domestic autos, metals and durables are expected to deliver strong growth, exporters in chemicals, auto and pharma are likely to continue facing significant headwinds.
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January 09, 2026, 13:50 IST
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