ET NEWS

ET Intelligence Group: Small and mid-cap firms fared poorly during the June quarter results season compared with their large cap counterparts, according to the ETIG analysis of over 3,100 companies. Net profit of small caps continued to slip for the third consecutive quarter, reaching a nine-quarter low growth of 7.5% year-on-year. Profit growth of mid-caps slowed to just 1%, which was the weakest in seven quarters. In contrast, large-cap companies reported a 9.5% rise in net profit, an improvement over the 8.9% growth recorded in the same quarter last year.The trend was similar in sales performance as large caps reported 6.7% growth, surpassing the 5.2% growth of small-cap firms and 5.7% growth of mid-cap firms."Risk-reward is slowly building towards mid and small caps. Nonetheless, recovery will be slow and gradual as we progress towards FY26, led by strong earnings expectations, improving domestic liquidity, and stable Indian macros," said Neeraj Chadawar, head - fundamental and quantitative research, Axis Securities.123687750Large caps have also been able to hold on to their profit margins while small and mid-caps have witnessed a declining trend. The aggregate operating margin of large caps stood flat YoY at 30.4% in the June quarter. However, for small caps, it shrunk to 13.3% from 15.3% in the year-ago quarter. Similarly, the operating margin of mid-caps fell to 17.7% from 18.2% by similar comparison.According to Chadawar, the market needs to sail through another couple of months smoothly before entering a concrete direction of growth.Experts believe that the Indian market has seen a significant correction in the last two odd months and has re-entered an oversold territory. Foreign investors have been selling off their stocks concerned about the potential impact of new US tariffs on Indian exports. Foreign Portfolio Investors (FPIs) sold a net total of $3.99 billion (₹34,993 crore) in Indian stocks during August.

MUMBAI: In a letter to the Prime Minister dated August 26, a copy reviewed by ET, former CFO of IndusInd Bank Gobind Jain claimed that he uncovered serious issues in treasury operations that had persisted for more than a decade. Jain said he was the only executive to detect the lapses and had fought a “lone battle” to highlight them.According to him, Mehta and his close aides created an “atmosphere of fear” within the bank, targeted him for exposing the problems, and shielded those responsible. Employees who supported Jain were also being singled out, he alleged.Meanwhile, IndusInd Bank denied all allegations made by Jain, calling them baseless and motivated. The bank said its board had promptly disclosed accounting discrepancies in derivatives, microfinance and other revenue streams to stock exchanges in March–May 2025, appointed external agencies for independent investigations, reported suspected frauds to the banking regulator, and filed complaints with SFIO and Mumbai EOW.The bank urged the ministry to dismiss Jain’s complaint, arguing that the board acted diligently and transparently, while Jain is attempting to obstruct ongoing probes. Jain did not respond to request for comment. “The bank has made disclosures to the stock exchanges in relation to the identification of discrepancies in the accounting of its derivative portfolio, and the steps taken by the bank in relation to the same, including the findings of the external independent agency of its investigation into the matter and the identification of any lapses and accountability,” the bank spokesperson said in a response to ET’s query. In March, the Hinduja-promoted bank reported suspected frauds that led to a quarterly loss of about Rs 2,000 crore, with auditors flagging accounting discrepancies worth Rs 2,600 crore.ACKNOWLEDGING LOSSESThese included inflated income from microfinance loans, misclassified assets and liabilities, and `1,960 crore of notional profits from internal derivative trades written off. The disclosures caused the steepest plunge in the stock since listing —at 27% — the next trading session.Jain in his letter has urged the government to suspend Mehta and initiate an independent probe, offering to hand over supporting documents to any official nominated by the authorities. 123684690He said he has been targeted “financially and emotionally” and remains fearful but expressed faith in the prime minister’s office to ensure a fair inquiry.Jain also alleged that statutory and forensic auditors had produced reports dictated by the board in exchange for hefty fees, while regulators such as the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (Sebi) had refrained from intervening directly. Jain has alleged that despite auditors and consultants being engaged, findings were shaped to protect the board. He questioned why the chairman, risk committee members, and senior executives continued in office even as losses of about `2,000 crore surfaced. He maintained that the resignation of the CEO and other officials months after his own exit did little to bring accountability.Audit findings on the lender prompted an internal investigation, which revealed senior officials had overridden financial controls. Soon after, the then CEO Sumanth Kathpalia stepped down.

Buying a new AC or television this festive season may no longer pinch the pocket as much. The GST Council has announced a sweeping rationalisation of tax slabs, bringing a set of consumer durables under a lower rate.In its September 3, 2025, meeting, the Council scrapped the 12% and 28% slabs, retaining only 5% and 18%. That means products like air conditioners, large-screen TVs, refrigerators and washing machines, which were taxed at the steepest 28%, will now shift to 18%. Items earlier under the 12% slab will also migrate to 5% or 18%, depending on category.A festive-season boosterFor households, this translates into immediate savings. According to a PTI report, an air-conditioner could now cost Rs 1,500 to Rs 2,500 less, depending on the model. Industry executives believe the cut will not just drive volumes but also push buyers toward premium, energy-efficient models.Also Read: GST Council slashes tax slabs to two to spur consumption; announces key measures for middle classBlue Star MD B Thiagarajan had called the proposal a “great move” which should be implemented quickly. Panasonic Life Solutions India Chairman Manish Sharma had estimated a 6-7% reduction in effective prices, calling it “phenomenal.” Godrej Appliances’ business head Kamal Nandi said the cut could lift AC penetration,which is still at just 9-10% in India, and “improve the quality of life for many households.”For television makers too, the shift is timely. Larger sets above 32 inches, which were taxed at 28%, will now attract 18%. “Brands could see 20% year-on-year growth,” PTI had quoted Avneet Singh Marwah, CEO of SPPL, which manufactures TVs under several global labels, as saying. He had said that cutting GST on 32-inch smart TVs to 5% would be a “game changer,” especially against the unorganised sector.Relief after a weak quarterThe decision comes as a breather for appliance makers, who faced a tough June quarter. An early monsoon and unseasonal rains hit cooling product sales, with listed players like Voltas, Blue Star and Havells reporting revenue drops of up to 34% in their air-conditioning businesses.The Larger GST JourneyThe move marks the most significant rationalisation since GST was rolled out in July 2017 with four slabs-5%, 12%, 18% and 28%. With the new two-slab structure, policymakers say the tax will be simpler, more efficient, and better aligned with its original promise of affordability and wider consumption.The timing is not accidental. Weeks ago, Prime Minister Narendra Modi had promised a “Diwali gift” in the form of GST reform during his Independence Day speech. The Council’s decision has now delivered on that pledge, setting the stage for a consumption-led boost just as the festive season begins.