India delivered a historic earnings performance in FY26, with the profit-to-GDP ratio of Nifty 500 companies rising to an all-time high of 5.2 per cent, according to Motilal Oswal’s latest “India Strategy” report. The profit-to-GDP ratio of listed Indian companies also climbed to 5.7 per cent, marking its highest level in the last 18 years.
Despite geopolitical tensions, global uncertainty, and a moderation in domestic demand, corporate earnings reached record levels. Auto, Oil & Gas, and Metals emerged as the biggest contributors to this growth, playing a key role in shaping India’s earnings story.
Sector-Wise Profit Growth in FY26
Auto Sector Emerges as the Biggest Contributor
The automobile sector made the largest contribution to the Nifty 500’s profit-to-GDP ratio, with its share increasing from 0.3 per cent to 0.5 per cent.
Sector profits surged from Rs 1,070 billion in FY25 to Rs 1,813 billion in FY26, reflecting a 69 per cent increase. Strong demand for passenger vehicles, higher premium vehicle sales, and improving export markets supported this growth.
Oil & Gas Becomes the Second-Largest Earnings Driver
The Oil & Gas sector recorded the second-biggest contribution to corporate earnings growth. Its profit-to-GDP contribution increased from 0.5 per cent to 0.7 per cent.
Total sector profits rose from Rs 1,678 billion in FY25 to Rs 2,362 billion in FY26, representing a 41 per cent year-on-year increase.
Metals Sector Strengthens Earnings Contribution
The Metals sector increased its profit-to-GDP contribution from 0.3 per cent to 0.4 per cent during FY26. Total profits climbed from Rs 1,108 billion in FY25 to Rs 1,449 billion in FY26, translating into growth of nearly 31 per cent.
Nifty 500 Earnings Nearly Double in Four Years
Among the three sectors, Auto recorded the highest profit growth at 69 per cent, followed by Oil & Gas at 41 per cent and Metals at 31 per cent.
The combined contribution of Auto and Oil & Gas played a major role in pushing Nifty 500 earnings up by 15.6 per cent to Rs 18,099 billion in FY26.
Over the last four years, Nifty 500 profits have nearly doubled from Rs 9.8 lakh crore to Rs 18.1 lakh crore, while corporate profits expanded at a CAGR of 28.7 per cent during 2020-26, compared with GDP growth of 9.5 per cent.
(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.)
