India Corporate Brief: Q3 Earnings & Market Dynamics Corporate India has concluded its third-quarter earnings season for the 2025-26 fiscal year with a resilient topline, though rising operational costs have emerged as a primary theme. While revenue growth across key sectors remains steady, aggregate profitability has faced pressure from regulatory compliance and shifting global demand. Performance Benchmarks Earnings for the Nifty 50 constituents grew at an estimated **8.8%** year-on-year, a slight acceleration compared to the previous quarter. However, when excluding volatile oil marketing companies, profit after tax growth moderated to approximately **5%**. This reflects a tightening margin environment as companies navigate higher input costs and labor expenses. The Nifty 50 index recently settled near **25,471**, following a period of heightened volatility. Foreign Portfolio Investors (FPIs) remain cautious, recording net sales of roughly **14,652 crore** in a single week during the February peak of earnings reporting. Sectoral Highlights Manufacturing and industrials have outperformed traditional growth drivers. Consumer durable players reported revenue growth of **14.3%**, supported by steady urban demand and premiumization trends. The real estate sector also signaled strength, with major urban developers hitting record quarterly collections, such as **709 crore** in a single period, underscoring sustained housing interest. The financial services segment continues to provide stability. Notable performers in asset management saw net profits surge by **45.1%**, fueled by rising equity participation and systematic investment plan inflows. Technology and Infrastructure The IT sector is facing significant headwinds, with the Nifty IT index recently experiencing a sharp weekly decline of over **8%**. Profitability is being squeezed by labor code compliance and "automation shock" fears. Despite this, digital transformation remains a priority, with IT spending in India projected to exceed **$176 billion** in 2026, a **10.6%** increase from the previous year. Infrastructure remains a primary engine for the broader economy. Central capital expenditure is expected to remain robust, with forecasts suggesting a budget allocation of over **12 lakh crore** for the upcoming cycle. Order inflows in the power and construction segments are providing visibility for the next several quarters. Economic Context India’s retail inflation rose to **2.75%** in January 2026, up from **1.33%** in December. Despite this uptick, the Reserve Bank of India has maintained an accommodative stance, having implemented cumulative rate cuts of **1.25 percentage points** over the last year to support domestic consumption. The outlook for the full fiscal year remains optimistic, with GDP growth expected to land between **7.5% and 7.8%**, driven by resilient private consumption which grew at **7.9%** in the most recent half-year data. Market participants are now focusing on valuation dispersion, as mid-cap and small-cap indices have seen sharper pullbacks compared to large-cap benchmarks.