Jefferies India Strategy head Mahesh Nandurkar expects a significant revival in corporate India's revenue momentum during the December 2025 earnings season, with stocks across autos, cement, telecom and oil & gas sectors positioned to dominate quarterly results. The brokerage forecasts revenue growth to reach an 11-quarter high of approximately 14% year-on-year for its coverage universe excluding global commodities, anchoring similar pace of Ebitda and earnings growth.

Auto Sector Leads Growth Momentum

Auto stocks emerge as key beneficiaries of the earnings surge, supported by GST rate cuts that have boosted discretionary consumption demand. Jefferies projects auto OEMs will report a robust quarter with the following performance metrics:

Property and real estate stocks are also in focus as improving construction activity, supported by normalising weather conditions, drives strong sales momentum.

Cement, Telecom And Oil Stocks Show Strong Performance

Cement, telecom and oil marketing companies are expected to sustain robust earnings growth of 30% or more. The cement sector benefits from multiple positive factors including stronger industry volume growth, steady costs and improved pricing dynamics.

Oil marketing companies are projected to report sharp year-on-year jumps in Ebitda, driven by elevated marketing margins and firm refining spreads amid lower crude prices.

Domestic Companies Drive Operational Performance

Domestic-facing companies, excluding financials, are set to lead operational performance with Ebitda growth estimated at approximately 16% year-on-year. This represents an improvement of nearly 4 percentage points sequentially, backed by a 17% year-on-year rise in revenues—the strongest performance in 11 quarters.

Autos and property developers are expected to witness over 20% revenue growth with substantial sequential improvement, while electronics manufacturing services players including Dixon, Syrma and Kaynes are projected to post Ebitda growth exceeding 25% on strong topline momentum.

Mixed Margin Trends And Sector Outlook

Margin trends remain mixed across sectors, with Ebitda margins for domestic companies forecast to decline by around 0.50 percentage points quarter-on-quarter to a 12-quarter low. However, specific sectors show varied margin performance:

L&T's Ebitda is projected to rise 14% year-on-year on similar revenue growth. In contrast, bank stocks are likely to post a softer quarter with profits rising only about 3% year-on-year, though sequential improvement is expected as net interest margin pressures ease and credit costs normalise.

Cautionary Factors And Broader Outlook

Jefferies cautions investors to monitor labour cost-related one-offs this quarter, as companies may create provisions for higher gratuity and leave liabilities under new labour codes. While these could temporarily weigh on reported earnings, the broader picture remains supportive for stocks leveraged to domestic demand, construction activity and discretionary consumption going into 2026.

IT stocks may see revenue growth moderate to about 1.20% quarter-on-quarter in constant currency with earnings growth of around 8% year-on-year, while FMCG staples are expected to deliver modest profit growth of approximately 6%.

Jefferies has released an updated assessment of the Contract Research, Development, and Manufacturing Organisation (CRDMO) sector, highlighting selective opportunities amid a challenging operating environment. The brokerage identified Sai Life Sciences and Divi's Laboratories as top picks, citing strong execution capabilities and healthy growth outlook despite sector-wide headwinds.

Target Price Revisions and Rating Updates

The brokerage made significant adjustments to target prices across its CRDMO coverage universe, reflecting both optimism for select names and caution for others.

Sector Outlook and Growth Drivers

Jefferies acknowledged that 2025 represents a difficult year for the CRDMO space, primarily due to ongoing destocking challenges that have pressured industry participants. The brokerage expects 2026 to be a mixed year, with continued volatility stemming from patent expiries and persistent destocking uncertainties.

However, the firm identified several positive catalysts for medium to long-term growth:

• Biosecure Act passage expected to boost industry growth prospects
• Anticipated soft base effect from the second half of 2026
• Improved growth optics as challenging comparisons ease

Strategic Positioning

Despite acknowledging near-term headwinds, Jefferies emphasized the long-term growth prospects for CRDMO companies while advising short-term selectivity in stock picking. The brokerage's preference for Sai Life Sciences and Divi's Laboratories reflects confidence in these companies' ability to navigate current challenges while capitalizing on future opportunities.

The updated recommendations suggest that while the CRDMO sector faces immediate pressures, well-positioned companies with strong execution track records are likely to emerge stronger as market conditions normalize and regulatory tailwinds take effect.