Corporate Developments and Earnings - Newspaper Summary

 The sources provide significant details regarding Corporate Developments & Earnings within the context of the challenging yet optimistic outlook for the Indian market and the tradition of Festive Investing (Samvat 2082). This information shapes the overall investment landscape, influencing sectoral performance and broad market expectations.

1. Corporate Earnings Performance (Q2 FY26)

Recent corporate earnings, particularly for Q2 FY26, offer mixed but generally positive indicators, contributing to the cautious optimism for Samvat 2082:

• Banking Sector Stability and Growth:
  • HDFC Bank reported an 11% year-on-year (y-o-y) rise in net profit for Q2 FY26, totaling ₹18,640 crore, driven by stable increases in net interest income (NII) and other incomes. NII grew 5% y-o-y, and other income rose 25%. The bank is accelerating loan growth, expecting this to sustain. Asset quality remained stable, with the gross non-performing asset (GNPA) ratio falling to 1.24% from 1.40% sequentially.
  • ICICI Bank reported a modest 5% y-o-y growth in standalone net profit (₹12,359 crore), benefiting from lower provisions and improved asset quality. NII was up 7% y-o-y, and other income rose about 6%. The bank remains positive on overall loan growth going forward, expecting the second half to be better due to policy measures. Its GNPA improved to 1.58% (from 1.97% y-o-y).
  • Punjab National Bank (PNB) reported a 14% increase in net profit for Q2 FY26, attributing this to steady business growth, improved asset quality (GNPA ratio declined to 3.45%), and robust digital adoption.
  • IndusInd Bank, however, slipped into a net loss of ₹445 crore in Q2 FY26, compared to a net profit in the year-ago quarter. This loss was primarily due to writing off ₹1,579 crore of microfinance loans and increased provisioning for residual microfinance NPAs.
• Overall Corporate Earnings Outlook: Corporate earnings are reported to be "picking up steam this quarter". Based on bottom-up analysis, earnings growth is expected to recover to double digits, closer to around 11–12%, in the second half of the year, which should lend stability to the equity markets.

2. Major Corporate Developments

The sources detail several significant corporate developments, affecting specific sectors and investor sentiment:

• Mergers, Acquisitions, and Fund Raises:

  • Emirates NBD (ENBD) is set to acquire a 60% stake in RBL Bank for ₹26,850 crore, marking the largest ever foreign direct investment (FDI) in India’s financial services sector and the largest ever equity fund-raise in the banking sector. ENBD will also make a mandatory open offer for an additional 26% stake.
  • Tata Motors Demerger: The company's Commercial Vehicle (CV) business was spun off, separating it from the Jaguar Land Rover (JLR) and domestic Passenger Vehicle (PV) businesses. The market priced the CV business at about ₹265 per share following the adjustment. The remaining entity faces challenges, including tariff impacts on JLR and volume/margin decline in the PV segment, leading analysts to advise holding existing positions but avoiding new ones.
  • UltraTech Cement Capex: UltraTech Cement announced a fresh capital expenditure of ₹10,255 crore to expand its cement production capacity by 22.8 million tons per annum (mtpa), reflecting confidence in the Indian economy and its infrastructure ambitions.

• Manufacturing and Defence:

  • The establishment of the first batch of BrahMos missiles manufactured at the UP Defence Industrial Corridor was flagged off, highlighting India's growing defence manufacturing capabilities (Aatmanirbharta). Defence Minister Rajnath Singh noted contracts worth ₹4,000 crore signed with two countries in the last month.
  • A Titanium and Superalloy Materials Plant was dedicated to the nation at PTC Industries, marking one of the first private sector manufacturing units to make strategic materials.
  • Foreign Corporation Views on India (Global Boardroom Chatter): Quarterly earnings calls reveal multinational companies see India as a key growth engine. BlackRock Inc. views its JioBlackRock venture as vital for expanding access to local investing, noting India is still largely a country of savers. Spirits-maker Brown-Forman (Jack Daniel’s) sees India as a major long-term growth market driven by premiumization. Firan Technology Group is setting up a new manufacturing facility to tap India’s cost advantages and the 'Make in India' policy.

3. Corporate Developments in the Context of Market Outlook & Festive Investing (Samvat 2082)

The corporate data underpins the market narrative for the coming Samvat:

• Justifying the Bullish Outlook: Brokerage forecasts for the Nifty (targeting 27,500–28,000) rely heavily on India remaining one of the fastest-growing large economies and improving corporate earnings. The optimism is fueled by government measures (GST rationalization, rate cuts) aimed at stimulating economic activity. The strong credit growth and stable asset quality shown by major private banks (HDFC, ICICI) reinforces the domestic financial stability argument.
• Sectoral Opportunities:
  • Automobiles: Auto stocks, particularly Maruti Suzuki and PNB, benefited from GST rationalization and festival demand. Maruti Suzuki expected record deliveries of 51,000 units this Dhanteras. Hyundai also saw strong demand.
  • Domestic Consumption: Sectors oriented towards domestic consumption are expected to benefit from policy/fiscal measures (GST rate cuts, income tax reductions) and improving economic activity. The government affirmed that companies, including in FMCG and kitchenware sectors, are passing on GST rate cut benefits, boosting consumer sentiment.
  • Capital Goods/Infrastructure: Heavy investment plans by private sector giants like UltraTech Cement signal a strong growth pipeline for the infrastructure ecosystem. The strong performance seen in sectors like Power, Realty, and Infrastructure historically (despite a sharp decline in IT, Power, Realty, and FMCG during the challenging Samvat 2081) suggests these areas are key areas of focus going forward, especially as the Realty Index recently outperformed.
• Valuation Context: While large-cap indices like the Nifty 100 TRI trade at a Price-to-Earnings (PE) multiple of 21.57, mid-cap (32.84x) and small-cap (29.96x) indices remain at a stiff premium. This reality, coupled with the stability and earnings predictability of large-caps during global uncertainty, favors investing in the "cream of India Inc" (large-caps).
• Learning from Samvat 2081: The flat performance of the market in Samvat 2081, with the Sensex gaining only 5.3% and many stocks down significantly, underscores the risks even amidst strong DII flows. This history necessitates that investors approaching Festive Investing for Samvat 2082 temper the current optimism (brokerage targets up to 28,000) with skepticism, focusing on companies with solid fundamentals and reasonable valuations.