India Inc's Q2 Profit Soars 16%! Refineries, Cement Lead the Charge – See Which Sectors Are Lagging!

Author

Akshat Lakshkar | Whalesbook News Team

Detailed Coverage:

India Inc. posted strong financial results for the second quarter of fiscal year 2026 (Q2FY26), with overall revenue growth of 9% and earnings growth of 16% year-on-year, based on reports from over 2,400 companies. Excluding the banking and financial services sector, the growth figures were even more impressive, showing 9% revenue growth and a significant 22% surge in earnings. This strong performance is attributed partly to a favourable base effect, as earnings had declined by around 18% in the same quarter last year.

The refining sector was a major contributor, driven by a rebound in Gross Refining Margins (GRM) and lower crude oil prices, which boosted both revenue and profit margins for these companies. The cement and steel industries also showed substantial growth, fueled by strong demand, volume rebounds, and improving prices. The automotive sector experienced a boost from robust exports, festival season demand, and the impact of GST 2.0, with premium models and electric vehicles (EVs) expected to sustain demand, though supply chain issues for rare-earth minerals are a watch point.

Pharmaceutical companies delivered solid growth, but those with significant exposure to the United States are preparing for the end of exclusivity periods for key drugs like Revlimid. The contract manufacturing segment continues to see steady interest and revenue generation. While banks are projected for a weaker FY26, the sector outlook remains positive long-term, with net interest margins stabilizing and credit growth expected to accelerate.

Conversely, the Fast-Moving Consumer Goods (FMCG) sector reported weak results, with limited impact from recent GST cuts and pressure on margins due to high competition and ongoing reorganizations. The Information Technology (IT) sector continues to face a challenging outlook, impacted by tariff uncertainties, shifting client spending, and AI-led disruptions, although sequential revenue growth is improving modestly with the weaker rupee.

Impact This news has a significant impact on the Indian stock market and Indian businesses, providing a vital pulse check on the economy's health and sector-specific performance. Investors can use this information to assess sector attractiveness and individual company prospects. The overall economic outlook is positive, supported by government fiscal measures and interest rate trends, despite persistent challenges in some consumer-facing and technology segments. Rating: 8/10

Difficult terms and their meanings: - FY26: Fiscal Year 2026 (covering April 2025 to March 2026). - YoY: Year-on-Year, comparing a period to the same period in the previous year. - GRM (Gross Refining Margin): The profit a refinery makes from processing crude oil into products like gasoline and diesel, calculated as the difference between the selling price of the refined products and the cost of crude oil. - GST: Goods and Services Tax, a unified indirect tax system in India. - EV (Electric Vehicle): A vehicle that is powered entirely or primarily by electricity. - NIM (Net Interest Margin): A profitability measure for financial institutions, representing the difference between interest income from loans and interest paid on deposits. - FMCG (Fast-Moving Consumer Goods): Products that are sold quickly and at a relatively low cost, such as packaged foods, beverages, toiletries, and over-the-counter drugs. - AI (Artificial Intelligence): The simulation of human intelligence in machines that are programmed to think and learn like humans.