Motilal Oswal Financial Services has raised its earnings estimates for the Nifty 50 for both FY27 and FY28, following stronger-than-expected corporate results in the September quarter. In its latest earnings review note, the brokerage raised its FY27 earnings per share (EPS) estimate by 1.1% to ₹1,247 and its FY28 estimate by 1.6% to ₹1,428 from ₹1,406 earlier.
The revisions follow a strong earnings performance so far in the second quarter of FY27.
Of the 35 Nifty companies that had announced results as of October 31, earnings grew 22% year-on-year, beating Motilal Oswal’s estimate of 20%. Reliance Industries, JSW Steel, ICICI Bank, Coal India and Axis Bank accounted for 59% of the increase in earnings during the quarter.
The brokerage has also seen broad-based earnings growth across its wider coverage universe. Of the 230 companies in its coverage that had reported results, sales grew 26%, earnings before interest, tax, depreciation and amortisation rose 24%, and profit after tax grew 33% year-on-year. These figures were above Motilal Oswal’s estimates of 19%, 14% and 19%, respectively. Excluding oil marketing companies, profit grew 30%, against an estimate of 22%. Motilal Oswal described the performance as the “highest growth in 12 quarters”.
“Multiple large-cap sectors clocked impressive growth, with 22 of the 24 sectors under our coverage delivering PAT growth. Among large-caps, 81% of the companies exceeded/met our estimates,” the note stated.
Banks and other financial services companies, metals and oil and gas were the main drivers of earnings growth. Together, these sectors contributed 78% of the increase in year-on-year earnings across the brokerage’s coverage universe.
Healthcare and cement were the only sectors to drag down overall earnings growth.
Small-cap companies led the performance across market capitalisations, with earnings rising 34% year-on-year, excluding oil marketing companies. Mid-cap earnings grew 26%, while large-cap earnings rose 30%, also excluding oil marketing companies. All three categories reported growth above Motilal Oswal’s estimates, although the brokerage said small-cap performance benefited from a favourable base, with earnings having grown just 4% in the year-ago quarter.
The brokerage’s revised estimates reflect changes to earnings forecasts for individual companies. For FY27, the biggest percentage upgrades to company earnings estimates included JSW Steel, Reliance Industries, Bajaj Auto, HDFC Bank.and Kotak Mahindra Bank
For FY28, the main contributors to the Nifty EPS upgrade included Reliance Industries, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank. However, the outlook was not uniformly positive: Motilal Oswal cut its FY27 earnings estimates for Eternal, InterGlobe Aviation, Maruti Suzuki, and Coal India.
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