Midcaps Steal the Show, Beating Large-Cap Peers on Q4 Profit Growth

After a rocky start to 2025, the Nifty Midcap 150 is on the verge of wiping out its year-to-date losses, riding high on the Q4 earnings season where these mid cap companies outshone their large cap peers in profit performance.

These mid-sized firms stole the spotlight this season with a robust 21% growth in aggregate profit for the March quarter, according to a report by Elara Capital based on the earnings of 73 out of 150 mid cap companies. But this earnings season has come with a rude shock for those who were hoping for a stronger performance by the large-caps, as 33 of the 50 blue-chip stocks reported a mere 4% on-year increase in profit for the quarter under review.

While they disappointed on the net profit metric, their quarterly sales growth do provide a glimmer of hope. These top 33 companies have booked a 7.6% on year increase in their revenues for the quarter, higher than the 7% growth recorded by the 73 companies in the Nifty Midcap 150 index.

In addition to racing ahead, the mid-cap segment is also steadily expanding its footprint in the overall profit pool. This is “a structurally positive signal if breadth sustains into FY26,” the brokerage firm said in its report.

Interestingly, this earnings season told a tale of contrasts, where sectors that boosted large-cap results were the same ones pulling mid caps in the opposite direction.

Hero In One Universe Turns Zero In Another

Despite their heavyweight presence, banks contributed only 6% to Nifty 50's profit uptick—yet in the mid cap universe, they were the primary engine, powering 55% of the gains. Mid cap banking firms posted a 40% on-year growth in profit for the period, significantly higher than what blue-chip banks have recorded. For banks, the net interest margin was seen under pressure due to fall in interest rates and credit growth from its peak 12 months ago.

In the information technology space too, mid caps outmanoeuvred their large cap peers with a 47% growth on a year-on-year basis, compared to a mere 1% for large cap IT bellwethers. This suggested superior execution agility in Tier II companies, the brokerage firm said.

While the financial sector, excluding banks, led the overall growth for the Nifty 50 earnings, they pulled down the growth in the mid cap space. Profit for large cap financial firms, excluding banks, grew over 13% during the March quarter, whereas for the mid cap financial stocks the earnings fell 12% on year. Excluding financial firms, the aggregate profit of mid cap companies grew 19.5% on year.

Large cap financial firms benefited from operating leverage and better-than-expected asset quality trends in select NBFC and diversified financials, Elara said.

Companies in the industrials sector were the top performers among the Nifty 50 companies as their aggregate profit went up by 22% on year, mainly on the back of resumed government capex cycle, robust orderbook conversion, and margin stability. However, mid cap industrials also did a better job with nearly 18% on-year rise in March-quarter profit.

Key earnings winners for the mid caps space were UPL, Union Bank of India, Bank of India, Hindustan Zinc, BSE, and Waaree Energies. BSE’s profit rose nearly five times on-year, whereas UPL’s consolidated net profit for the quarter under review zoomed more than 22 times on year on the back of a fall in expenses for the period.