Britain’s letter writers, and the small businesses that still depend on the post for invoices, contracts and statutory notices, are paying the price for another year of underperformance at Royal Mail.

Just 75.7% of first-class mail was delivered on time in the 12 months to the end of March, the postal operator confirmed on Friday, a country mile from its 93% regulatory target and the first full-year snapshot of life under Czech billionaire Daniel Kretinsky’s EP Group, which completed its £3.6bn takeover last spring.

Performance has actually slipped since the company’s final year on the London Stock Exchange, when 76.9% of first-class and 92.2% of second-class letters arrived on time. The new figures show only 90.2% of second-class post landed within three working days, against a target of 98.5%.

The communications regulator described itself as “very concerned” by the figures. Business Matters understands Ofcom is preparing to open a formal investigation into Royal Mail’s performance as soon as next week – a move that would almost certainly lead to a further multi-million-pound fine on top of the £21m penalty imposed last October, the third-largest in the watchdog’s history.

It is six years since Royal Mail last hit its second-class target and a decade since it cleared the bar on first-class. The slump that began during the pandemic has stubbornly refused to reverse.

Chief operating officer Jamie Stephenson struck a contrite tone, insisting the business is on course to meet new, softer targets of 90% for first-class and 95% for second-class by this time next year.

“We’re putting significant investment into improving reliability and reaching these new delivery targets, but delivering lasting change across a network of this scale takes time,” he said.

The company is ploughing £500m into its five-year improvement plan, which includes offering part-time posties longer hours and scrapping second-class Saturday deliveries – a structural overhaul agreed with Ofcom and rolled out from April.

For Britain’s 5.5 million small businesses, however, the patience required is wearing thin. SMEs remain disproportionately reliant on physical mail for cheques, payment reminders, HMRC correspondence and signed agreements. Slow post means delayed cash flow, missed deadlines and, in the worst cases, penalties from regulators whose own letters arrive late.

Tom MacInnes, policy director at Citizens Advice, was withering in his assessment. Poor performance at Royal Mail, he said, was “business as usual”.

“What’s worse, Royal Mail claims people will have to wait another year until it can meet its new, lower delivery targets,” he added.

In February, postal workers told the BBC that letters had been sitting undelivered in depots for weeks because staff had been instructed to prioritise parcels, which carry fatter margins. Mr Kretinsky was hauled before MPs on the Business and Trade Committee in March, where he said he was “deeply sorry for any letter that arrives late” but flatly denied that parcels were being put ahead of letters. As the House of Commons Library has documented, letter volumes have collapsed from 20 billion items in 2004-05 to around 6.6 billion last year, putting the universal service economics under unprecedented strain.

Ofcom has already eased Royal Mail’s regulatory burden. Since April, the operator has been measured against the lower targets of 90% next-day delivery for first-class and 95% three-day delivery for second-class. The regulator argued the previous benchmarks were “more stretching” than in comparable European countries and would “carry higher costs which would need to be recovered through higher prices” – an unwelcome trade-off for any SME owner who has watched a first-class stamp climb to £1.70.

Whether £500m and a slacker rulebook can finally turn around an institution that has failed its own customers for the best part of a decade is the question now landing on Mr Kretinsky’s desk. On the evidence of Friday’s numbers, the answer is not yet in the post.

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The National Stock Exchange (NSE) has announced a significant change to trading hours in the equity derivatives segment with the introduction of the Closing Auction Session (CAS) framework.

Starting August 3, 2026, the normal market closing time for equity derivatives will be extended by 10 minutes to 3:40 pm from the current 3:30 pm. While the extension is noteworthy, the bigger change lies in how closing prices for eligible securities will be determined.

The move aims to ensure a smoother transition between the cash and derivatives markets at the end of the trading day while maintaining consistency in the pricing framework across segments.

What is the closing auction session?

The CAS is a structured trading window held at the end of the trading day. During this period, market participants place buy and sell orders to determine a single closing price for a security through an auction-based mechanism.

Unlike the current system where prices evolve through normal trading until market close, the auction process discovers a fair closing price based on orders entered during the designated session.
According to the exchange, CAS will initially apply only to securities in the cash segment that have derivative contracts available. The framework will roll out in phases, and any future expansion will be subject to SEBI guidance and separate operational instructions from the exchange.

Why are derivatives trading hours being extended?

Although CAS applies only to the equity segment, NSE decided to extend trading hours in the derivatives segment to ensure both markets remain aligned during the closing process.

The exchange also clarified that the price bands and pre-trade risk control measures introduced as part of CAS in the cash market will be mirrored in the derivatives segment. This is intended to maintain consistency between the two segments during the closing phase of trading.

How will the closing auction session work?

The CAS will run for 20 minutes, from 3:15 pm to 3:35 pm. The process will begin with a transition phase between 3:15 pm and 3:20 pm, during which the reference price will be calculated using the volume-weighted average price (VWAP) of trades executed between 3:00 pm and 3:15 pm.

Between 3:20 pm and 3:25 pm, participants will be able to enter both market and limit orders. From 3:25 pm to 3:30 pm, only limit orders will be permitted. During this period, market orders cannot be modified or cancelled.

The order entry session will close randomly at any point between 3:28 pm and 3:30 pm, after which the auction process will determine the final closing price.

How will closing prices be calculated?

One key point highlighted by NSE is that there will be no change in the methodology used to calculate closing prices of derivative contracts. The volume-weighted average price (VWAP) used for derivatives closing price calculation will continue to be based on trades executed during the final 30 minutes of trading. However, because market hours are being extended, that 30-minute window will now shift to 3:10 pm-3:40 pm instead of the current 3:00 pm-3:30 pm.

For securities eligible for CAS, the closing price in the cash segment will be determined through the auction process.

Ashish Nanda, President and Digital Business Head at Kotak Securities summed up the shift by noting that the market is moving from a “continuous trading close” to an “auction discovered close”.

Under the current framework, closing prices are derived from the VWAP of trades executed between 3:00 pm and 3:30 pm. Under the new framework, closing prices for F&O-eligible stocks will effectively be linked to a 20-minute auction process running from 3:15 pm to 3:35 pm.

What happens if a stock is removed from F&O?

NSE clarified that eligibility for CAS is linked to the presence of derivatives on the stock. If a security is excluded from the equity derivatives segment on both exchanges, it will no longer be eligible for the CAS.

In such cases, the closing price will revert to the existing methodology and be determined using the VWAP of trades executed during the last 30 minutes of trading. However, if the security continues to be part of the derivatives segment on at least one exchange, it will remain eligible for CAS.

What happens to pending orders?

The exchange outlined operational changes relating to order management. All unexecuted special orders, including stop-loss orders and disclosed quantity orders, will be cancelled. Pending orders that fall outside the revised price band will also be cancelled automatically, and members will receive appropriate cancellation notifications.

Why does this matter for traders?

For many market participants, the biggest implication is that the final closing price may no longer mirror the last traded price visible on trading screens at 3:30 pm.

According to Ashish Nanda, this could require adjustments to trading strategies, particularly for option writers and arbitrageurs who rely heavily on closing prices for valuation, settlement and hedging decisions.

While the derivatives market will remain open until 3:40 pm, the broader shift is not simply about extending trading by 10 minutes. It marks a change in how closing prices for eligible securities are discovered, with the exchange moving toward an auction-based mechanism designed to determine a single closing price at the end of the trading day.

What happens to existing market timings?

Apart from the revised closing time, most trading schedules remain unchanged. The pre-open session in the derivatives segment will continue to begin at 9:00 am and the normal trading session will continue to start at 9:15 am. Similarly, the trade modification window will remain unchanged and continue until 4:15 pm.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

As markets wrap up the Q4 results season for the financial year 2026, Motilal Oswal highlighted that Indian corporate earnings showcased widespread outperformance across aggregates, with commodity strength driving the broad-based beat to estimates.

In its latest Indian strategy report, Motilal Oswal Financial Services said that aggregate earnings of the companies under its coverage grew 16% year-on-year, beating its estimate of 8% growth in the January-March quarter of FY26. According to the domestic brokerage, the better-than-expected earnings growth was powered by BFSI (profit grew 18% YoY vs. brokerage’s estimate of 11%) and supported by metals (profit surged 50% YoY vs. brokerage’s estimate of 24%) and OMCs (profit jumped 62% YoY vs. brokerage’s estimate of 7% growth). Further, technology (+13% YoY), telecom (+8.4x YoY), and automobiles (+13% YoY vs. brokerage’s estimate of 6% decline) propelled earnings, Motilal added.

On the other hand, aggregate earnings growth was dragged by oil & gas (excluding OMCs), which posted a profit dip of 10% YoY vs. Motilal’s estimate of 1% growth.

The Nifty 50 companies delivered 4% YoY growth in net profit, beating Motilal’s estimate of 2% growth. The domestic brokerage, however, noted that Nifty reported a single-digit earnings growth for the eighth consecutive quarter, the first time since the pandemic (June 2020).

“Barring Reliance Industries, which posted a profit dip of 13% YoY, and Interglobe Aviation, which posted a loss of Rs 24 billion vs. a profit of Rs 30.7 billion YoY, the Nifty Universe posted a 9% YoY earnings growth. Five Nifty companies – Bharti Airtel, JSW Steel, HDFC Bank, Infosys, and TCS – contributed 75% of the incremental YoY accretion in earnings. Conversely, Reliance Industries, Interglobe Aviation, Adani Enterprises, Power Grid, Dr Reddy’s, Cipla, Tata Motors PV, Sun Pharma, and Maruti Suzuki dragged down earnings. Within the Nifty, 15 companies reported lower-than-expected profits, while 18 posted a beat, and 17 registered in-line results,” Motilal added.

Also read: IndiGo soars 5% after Q4 results. What Goldman Sachs, Jefferies and others are saying

Largecaps, midcaps beat estimates, smallcaps post in-line earnings

The domestic brokerage noted that among the companies under its coverage, around 90 largecap companies on average posted an earnings growth of 12% YoY. Around 101 midcap companies, meanwhile, showed improvement and delivered earnings growth of 36% YoY (vs. the brokerage’s estimate of 25%).
“Multiple mid-cap sectors, such as BFSI, metals, OMCs, and healthcare, lifted the overall performance. These sectors contributed ~89% of the incremental YoY accretion in earnings. In contrast, smallcaps (168 companies) delivered in-line performance, with earnings rising 19% YoY (our estimate of +18%). Within small-caps, 68% of the coverage universe exceeded/met our estimates. Conversely, within the large-cap/mid-cap universes, 74%/73% of the companies exceeded/met our estimates,” Motilal Oswal said.
It noted that Nifty EPS for FY26 stood at Rs 1,065 per share, marking a second consecutive year of single-digit growth. It cut its Nifty EPS estimate for FY27 by 0.9% to Rs 1,235 per share, led by SBI, Reliance Industries, JSW Steel, ONGC, and Coal India. “Earnings estimates of the MOFSL Universe were cut by 1.3% for FY27, fueled by PSU Bank, Oil & Gas, Healthcare, Telecom, and Technology. The MOFSL large-cap universe reported an earnings cut of 0.9%, while the mid-cap universe recorded a downgrade of 2.2%, and the MOFSL small-cap universe posted a downgrade of 2.8% for FY27,” it added.

Q4 earnings season fared better than expectations

Motilal concluded by saying that the Q4 earnings season fared better than expectations, but forward earnings revisions continue to exhibit weakness. Following India’s sharp underperformance in FY26 and record FII outflows, a favorable base has likely been set for Indian equities, it said, adding that in the near term, however, the market will remain hostage to volatile developments arising from the West Asian crisis.
“Higher commodity prices will be the key monitorables, as a prolonged elevated level could affect India’s macro parameters and engender a tight monetary policy stance. Our model portfolio broadly reflects our preference for growth visibility, structural domestic growth plays, and select global value names. We firmly believe that this is a bottom-up market, despite India witnessing both time and price corrections relative to EM peers. Our key overweight sectors are Autos, PSU Banks, Diversified Financials, Manufacturing & Industrials, Consumer Discretionary, and New-age platforms. In contrast, we are underweight on Oil & Gas, Private Banks, Metals, Consumer Staples, IT, and Commodities/Utilities,” the brokerage said.

Also read: PSU bank stocks vs private banks in FY27: The valuation trap you need to avoid

Motilal Oswal’s top picks

It listed Bharti Airtel, State Bank of India (SBI), ICICI Bank, Mahindra & Mahindra (M&M), Titan, Bharat Electronics (BEL), Eternal, Tata Steel, Infosys and IndiGo as its top Nifty 50 picks, while non-Nifty 50 picks included TVS Motor Company, ICICI Prudential AMC, Groww, Indian Hotels, AU Small Finance, Dixon Tech, Lenskart, Waaree Energies, Coforge, Radico Khaitan and Delhivery.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)