StepStone stock dropped 7.8% on Friday after the private markets investment firm missed Wall Street's earnings and revenue estimates for fiscal Q1. Despite strong underlying business growth, earnings per share came in at $0.48, two cents below the $0.50 analysts expected, while revenue was $379 million against the $309 million consensus. However, the company demonstrated robust operational performance with fee-related earnings rising 30% year-over-year to $106 million and adjusted net income climbing to $60 million. The firm's combined fee-earning assets and undeployed capital reached roughly $193 billion, up 19% organically from a year ago, while fundraising was a bright spot with nearly $40 billion in gross AUM additions over the past 12 months, including $10 billion in the most recent quarter alone.
The June 2026 quarter witnessed continued double-digit revenue growth across sectors, driven by sustained market demand in automotive and consumer goods segments. However, profitability remained under pressure due to persistent input cost hurdles affecting multiple industries. The banking sector showed improved asset quality with State Bank of India reporting its lowest gross non-performing asset ratio of 1.5% in over two decades, while achieving a record quarterly net profit of ₹21,121.2 crore. Despite strong top-line growth, sectors including cement, pharmaceuticals, and downstream oil companies faced margin compression challenges. Recent developments show companies like Arq Inc. maintaining positive growth trends with revenue of $30 million and Adjusted EBITDA of $5.8 million, representing a 59% growth in profitability.
The automotive sector experienced significant margin pressure despite strong revenue growth. Revenue increased by 31.6% year-on-year, but net profit growth was modest at 5.9% due to input cost pressures. The sector's aggregate margin shrank by 210 basis points to 14.4%, with Mahindra and Mahindra's Ebitda margin contracting by 210 basis points to 12.2%. Companies face adverse commodity prices, rising competition, and potential rural demand weakness if monsoon conditions prove deficient. However, companies with new product launches are positioned to gain volume share in the market.
The banking sector demonstrated strong fundamentals with revenue growth of 7.0% year-on-year and net profit growth of 25.1%. State Bank of India achieved significant milestones including its lowest gross non-performing asset ratio in over two decades and record quarterly net profit. The retail, agriculture, and MSME portfolios continued showing double-digit year-on-year growth, though net interest margins remained under pressure for most banks due to competitive deposit acquisition challenges.
The cement sector showed mixed results with revenue growth of 7.6% but net profit declining 5.3% year-on-year. UltraTech Cement delivered its strongest-ever first quarter performance across volume, revenue, Ebitda, and profit metrics, while cement prices firmed up 3% sequentially during the quarter. In contrast, consumer goods sector demonstrated resilience with revenue growth of 9.5% and net profit growth of 0.8%, driven by volume recovery across categories. Hindustan Unilever reported 13-quarter strong underlying sales growth with 5% volume growth, while Nestle achieved 24.2% Ebitda margin, the highest June quarter margin in at least four years.
The IT sector maintained strong momentum with revenue growth of 15.9% and net profit growth of 11.9%, supported by buoyant order bookings despite client decision-making delays. Tech Mahindra reported 2.2% sequential growth in dollar-denominated revenue, the strongest among top IT companies. The oil and gas sector showed contrasting performance with revenue growth of 32.6% but net profit decline of 57.2% due to under-recoveries for oil marketing companies. ONGC and Oil India reported multi-fold increases in standalone net profits, while Indian Oil achieved record quarterly revenue of ₹2.8 lakh crore.
