Q4 FY25 wrap: Large caps post 6% earnings growth, small caps fall 16%, says report

Large-cap companies delivered stronger earnings in Q4 FY24–25 compared to mid- and small-cap firms, according to an earnings review by Equirus Securities. The report, which analyzed a universe of 270 companies, revealed that overall EBITDA and earnings surpassed expectations, growing 6% and 4% year-on-year (YoY) respectively, while revenues rose 5%, in line with estimates.

The divergence was most visible across market cap segments. Large caps (54 companies) posted a healthy 6% YoY earnings growth. Mid caps (68 companies) recorded a modest 2% rise, while small caps (148 companies) saw a sharp 16% decline. The data signals a continued flight to quality, with investors leaning toward larger, more resilient companies amid macro uncertainty.

Excluding Oil Marketing Companies (OMCs), EBITDA and earnings rose by 5% and 3% YoY respectively. Sectors excluding BFSI fared better, with 7% EBITDA and 6% earnings growth. Strong performers included Consumer Durables (19% revenue growth, 31% PAT), Healthcare (12%, 13%), Internet (48%, 37%), and Chemicals (10%, 46%).

Lagging sectors included Consumer Staples (6% revenue, -7% PAT), Building Materials (6%, -18%), and Industrials (6%, 2%), showing the uneven nature of the recovery. FMCG, Auto, and Infrastructure sectors also posted relatively weaker growth figures.

EPS upgrades were recorded for approximately 28% of the companies in the Equirus universe, driven by strong performance in Chemicals, Defence, Metals, Textiles, and Capital Markets. However, sectors like Consumer Durables, FMCG, and Building Materials witnessed downward EPS revisions, indicating caution in future earnings outlook.

Equirus noted that the popular discourse around broad-based earnings cuts may be overstated. “Contrary to sentiment, earnings and EBITDA outperformed expectations, led by resilience in large-cap companies and sector-specific standouts,” the brokerage said.

The firm also offered a cautiously optimistic outlook for FY26. While risks remain from pricing pressure, demand volatility, and input cost fluctuations, several companies are focused on strategic cost-saving initiatives, product innovation, and market expansion to preserve margins and drive growth.

Overall, the report highlighted that large caps continue to offer relative stability and earnings resilience, and are likely to remain a preferred bet in an environment marked by mixed sectoral tailwinds and structural uncertainty.