India Inc is set to report its strongest earnings growth in two years during the third quarter of fiscal year 2026 (Q3 FY26), covering the October-December period. Brokerage firm Motilal Oswal projects a robust 16% year-on-year (YoY) profit growth for companies under its coverage, marking the fastest pace in eight quarters. This positive outlook is largely driven by sectors such as oil & gas, financials (especially NBFC-lending), automobiles, metals, telecom, and real estate, which are expected to contribute significantly to the incremental earnings accretion. Additionally, a healthy revenue growth of 8-10% YoY is anticipated for India Inc in Q3 FY26, supported by resilient rural demand and expected urban consumption revival, according to ICRA. Factors like robust GDP growth, lower inflation, and the full impact of GST rationalisation reforms are also influencing the optimistic earnings environment. However, this recovery is not uniform across the board. A study of earnings predictions by Nuvama, Kotak Institutional Equities, and Motilal Oswal indicates that at least nine companies are likely to experience a profit decline of 50% or more on a year-on-year basis in the same quarter. Prominent among these are IndusInd Bank, projected to see a 92% fall in core profit due to asset quality pressures, and PI Industries, with an expected 69-80% decline impacted by weak pricing in specialty chemicals. Other companies facing significant profit drops include Welspun Living, GAIL India, NATCO Pharma, Orchid Pharma, Bajaj Electricals, Sapphire Foods India, and KNR Construction. Exporters in chemicals, pharma, IT, BFSI, FMCG, and EMS sectors are expected to face headwinds due to weak global growth, margin compression, and muted consumer demand. While overall sentiment remains positive, investors are closely monitoring these sectoral challenges as the Q3 earnings season unfolds.