DIC India Limited has received a GST demand order worth ₹16.97 lakh from Gujarat tax authorities, the company disclosed in a regulatory filing on December 26, 2025. The demand order was issued under Section 73 of the Gujarat Goods and Service Tax Act, 2017, relating to alleged tax irregularities during the financial year 2021-22.

GST Demand Order Details

The State Tax Officer, Ghatak 21 (Ahmedabad): Range-6: Division-2: Gujarat, issued the demand order with Reference No. ZD241225121228S. The total demand comprises multiple components as detailed below:

Nature of Alleged Violations

The demand order relates to several alleged irregularities in the company's GST compliance during FY 2021-22:

• Alleged excess claim of Input Tax Credit (ITC)
• Ineligible claim of ITC
• ITC distributed by Input Service Distributor not available
• Excess refunds availed during the period

Company's Response and Impact Assessment

DIC India has stated that there is no impact on the financial, operational, or other activities of the company, except as mentioned in the demand order. The company received the communication through its Key Managerial Personnel (KMP) on December 26, 2025.

The company is currently carrying out a detailed review of the order and will decide on the next steps required after comprehensive analysis. This measured approach indicates the company's intention to thoroughly examine the allegations before determining its response strategy.

Regulatory Compliance

The disclosure was made pursuant to Regulation 30(6) read with Para B of Part A of Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This regulatory framework requires listed companies to promptly disclose material events that could impact investor decisions.

The company has provided comprehensive details as required under SEBI regulations, including the nature of the action taken by authorities, date of receipt, details of alleged violations, and the expected impact on business operations.

India Inc has recorded its first aggregate earnings upgrade in five quarters, signaling a potential turnaround in the corporate profit cycle after an extended period of estimate reductions. This development represents a significant shift from the consistent downgrades witnessed across previous earnings seasons.

Earnings Revision Trends Show Clear Recovery

Corporate India has seen a 2% upgrade in FY26 profit estimates, primarily driven by mid and large-cap companies. This marks the first upgrade since the conclusion of the June 2024 results period, breaking a concerning pattern of consecutive estimate cuts.

The recovery has been primarily driven by mid-cap and large-cap companies, while small-cap stocks continue experiencing downward pressure.

Market Cap Segment Performance

The earnings upgrade cycle shows distinct patterns across different market capitalization segments. Mid-cap companies have emerged as clear leaders in the recovery phase, demonstrating resilience and improved business fundamentals.

The continued stress in small-cap earnings reflects ongoing challenges in the tail end of the market, where companies face greater operational and financial pressures.

Sector-wise Winners and Underperformers

The earnings revision landscape shows significant sectoral divergence, with certain industries experiencing substantial upgrades while others face continued downgrades. Oil & gas and telecom sectors lead the recovery with impressive profit upgrades.

Top Performing Sectors:

• Oil & Gas: +13% FY26 PAT revision
• Telecom: +30% FY26 PAT revision
• PSU Banks: +5% FY26 PAT revision
• Insurance: +3% FY26 PAT revision
• Non-lending NBFCs: +2% FY26 PAT revision

Underperforming Sectors:

• Utilities: -8% FY26 PAT revision
• Automobiles: -3% FY26 PAT revision
• Healthcare: -3% FY26 PAT revision

Notably, the automotive sector's decline is largely attributed to Tata Motors, as excluding this company would result in a 3% upward revision for the sector.

Growth Outlook and Economic Context

Motilal Oswal projects sustained earnings growth despite softer GDP expectations, forecasting FY26/FY27 earnings growth of 12%/15% for Nifty 50 and 15%/16% for their coverage universe. The brokerage argues that corporate profit growth can achieve mid-teens levels even with nominal GDP growth below 10%.

Historical analysis indicates that nominal GDP growth explains only approximately 20% of Nifty 50 profit growth, suggesting corporate earnings are influenced by multiple factors including leverage, pricing power, cost trends, and competitive dynamics rather than solely macro growth indicators.

Market Positioning and Investment Strategy

The brokerage maintains a constructive outlook on equities, expecting Indian markets to recover from calendar 2025 underperformance through healthier earnings, supportive domestic macroeconomic conditions, and improved geopolitical environment. Current Nifty 50 valuations appear reasonable at 21.3 times one-year forward price-earnings multiple compared to the long-term average of 20.8 times.

Preferred Investment Themes:

• Overweight: Diversified financials, automobiles, capital goods, IT services, telecom
• Underweight: Energy, metals, utilities, consumer staples

The analysis suggests that concerns about lower nominal GDP mechanically reducing corporate earnings may be overstated in the Indian market context, providing support for the positive earnings revision cycle.