Q3FY26 Preview: Financials and Real Estate Lead Amid Mixed Earnings

India Inc’s Q3FY26 earnings are expected to remain steady but uneven, according to a recent report by JM Financial. The financial sector is anticipated to post steady earnings growth, supported by system-wide credit growth running in the low-to-mid teens (12–15%) year-on-year.

While loan growth remains healthy across retail and SME segments, net interest margins are expected to stay flat to marginally lower as deposit rates continue to reprice. Asset quality remains stable, with gross NPAs for large banks largely below 3%, keeping credit costs contained.

Real estate continues to be one of the stronger performers in Q3. Housing sales across the top seven cities have remained resilient, with industry data pointing to high single-digit to low double-digit year-on-year growth in residential sales volumes during the quarter. Developers remain disciplined on launches, prioritising cash flows and balance sheet strength. Input cost inflation has moderated compared to earlier years, though mortgage rates staying above 8% remain a key sensitivity for affordability.

Consumption trends remain mixed. Discretionary segments such as jewellery continue to benefit from structural tailwinds, with diamond jewellery penetration in India still estimated at just 12–15%, indicating long-term headroom. FMCG companies are expected to see low-to-mid single-digit volume growth, with urban demand holding up better than rural consumption, which remains uneven.

Metal producers are likely to face earnings pressure as global price volatility caps realizations. Benchmark metal prices have remained 10–20% below recent peaks, weighing on margins despite steady domestic demand. Energy companies continue to track crude oil movements, with Brent prices fluctuating in the $55–65 per barrel range, adding uncertainty to earnings visibility.

Telecom sector revenues are expected to grow in mid-single digits, supported by stable subscriber additions, while margins hinge on tariff discipline. Industrials and capital goods companies are likely to post high single-digit to low double-digit revenue growth, driven by execution of existing order books.

Overall, Q3FY26 earnings are expected to show clear sectoral divergence. Financials and real estate remain relatively resilient, while commodity-linked and margin-sensitive sectors face headwinds.