Indian Q4 Earnings Motilal Oswal Review: Corporate India reported a stronger-than-expected earnings performance in the March quarter of FY26, with commodity-linked sectors and financials leading the upside, according to a report by Motilal Oswal Financial Services (MOFSL).
The aggregate earnings of companies under the MOFSL coverage universe grew 16 per cent year-on-year in 4QFY26, significantly ahead of the brokerage’s estimate of 8 per cent growth. Excluding financials, earnings rose 14 per cent, while profits excluding both metals and oil & gas increased 12 per cent.
The stronger-than-expected earnings growth was primarily driven by the banking, financial services and insurance (BFSI) sector, where profits rose 18 per cent year-on-year. Metals emerged as another key contributor, posting a 50 per cent jump in profits, while oil marketing companies (OMCs) reported a 62 per cent increase.
Technology companies recorded 13 per cent earnings growth, automobile firms reported a similar 13 per cent rise, and the telecom sector witnessed a sharp 8.4-fold increase in profits.
However, the broader oil and gas sector, excluding OMCs, remained a drag on overall profitability, with earnings declining 10 per cent year-on-year.
Nifty Sees Eighth Consecutive Quarter of Single-Digit Growth
The Nifty-50 delivered profit-after-tax (PAT) growth of 4 per cent year-on-year in the March quarter, marginally ahead of MOFSL’s estimate of 2 per cent.
According to the report, this marks the eighth consecutive quarter of single-digit earnings growth for the benchmark index, the longest such streak since the period following the pandemic in June 2020.
Excluding Reliance Industries, which reported a 13 per cent decline in profit, and InterGlobe Aviation, which posted a quarterly loss, the Nifty universe registered earnings growth of 9 per cent year-on-year.
Mid-Caps Outperform Large and Small Caps
Among market-cap segments, large-cap companies covered by MOFSL reported earnings growth of 12 per cent year-on-year during the quarter.
Mid-cap companies emerged as the standout performers with earnings growth of 36 per cent, significantly ahead of estimates. The performance was driven by sectors such as BFSI, metals, OMCs and healthcare.
Small-cap companies delivered earnings growth of 19 per cent, broadly in line with expectations.
The report noted that 74 per cent of large-cap companies and 73 per cent of mid-cap companies either met or exceeded estimates, compared with 68per cent in the small-cap universe.
Top FY27E earnings upgrades
Top FY27E earnings downgrades
FY27 Earnings Outlook Remains Moderate
Despite the strong quarterly performance, forward earnings revisions remain subdued.
MOFSL expects its coverage universe to deliver 10 per cent growth each in sales, EBITDA and profits during FY27. Financials, metals, telecom and technology are projected to be the key growth drivers, collectively contributing more than 90per cent of incremental earnings growth.
The brokerage cut FY27 earnings estimates for its coverage universe by 1.3 per cent. Large-cap earnings estimates were reduced by 0.9per cent, while mid-cap and small-cap estimates were lowered by 2.2per cent and 2.8 per cent, respectively.
Nifty EPS Growth Stays in Single Digits
Nifty earnings per share (EPS) for FY26 stood at Rs 1,065, reflecting 5per cent year-on-year growth and marking a second consecutive year of single-digit expansion.
TVS Motors, ICICI PRU AMC, Groww, Indian Hotels, AU Small Finance, Dixon Tech., Lenskart, Waaree Energies, Coforge, Radico Khaitan, and Delhivery.
MOFSL said that while fourth-quarter earnings exceeded expectations, forward earnings revisions continue to indicate weakness. The brokerage believes Indian equities have established a favourable base following their underperformance in FY26 and record foreign institutional investor outflows.
However, it cautioned that markets could remain sensitive to developments in West Asia and commodity price movements. Elevated commodity prices, if sustained, may affect India’s macroeconomic indicators and influence monetary policy.
The brokerage continues to prefer sectors with stronger growth visibility, including automobiles, PSU banks, diversified financials, manufacturing and industrials, consumer discretionary and new-age digital platforms. It remains underweight on oil & gas, private banks, metals, consumer staples, information technology and utilities.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
