Large-caps outshine small-caps in Q4 FY25 as investors shift to stability: Report

Mumbai, June 15
Large-cap companies have delivered stronger earnings growth than mid and small-cap firms in the fourth quarter of FY24-25, a new report said on Saturday.

According to a report by brokerage firm Equirus Securities, which analysed 270 major listed companies, found that large caps showed resilience in a mixed market environment, with their earnings and profits performing better than expected.

The report highlights that EBITDA and earnings for the entire group of companies tracked by Equirus surpassed analyst estimates by 4 per cent and 5 per cent, respectively.



This translated to a year-on-year (YoY) growth of 6 per cent in EBITDA and 4 per cent in earnings, while revenues were in line with expectations, rising 5 per cent from the same quarter last year.



When broken down by market size, the divergence was clear. Large-cap companies recorded a healthy 6 per cent growth in earnings compared to last year.



Mid-cap firms posted a modest 2 per cent increase, while small-cap companies saw their earnings fall sharply by 16 per cent year-on-year (YoY).



This trend, according to the report, suggests that investors are increasingly favouring established, stable companies in uncertain market conditions.



The report also noted sector-specific differences. If oil marketing companies (OMCs) are excluded, EBITDA and earnings for the rest of the companies still grew by 5 per cent and 3 per cent respectively.



The growth was even stronger when excluding banking, financial services, and insurance (BFSI) companies -- EBITDA and earnings grew by 7 per cent and 6 per cent YoY in that group.



Strong performances were reported in the retail, pharma, capital goods, and consumer durables sectors.



Meanwhile, FMCG, infrastructure, IT, and auto sectors saw slower growth during the quarter.



In terms of outlook for the next fiscal year (FY26), about 28 per cent of companies in the report received upgrades in their Earnings Per Share (EPS) forecasts.



Sectors like capital markets, chemicals, defence, metals, and textiles led the upgrades, as per the report.