FY27 earnings cuts, AI phase and energy security bets: As India Inc sets the ball rolling for Q1 FY27, Edelweiss AMC President and CIO Equities Trideep Bhattacharya has shared his outlook with ET NOW on Indian markets, corporate earnings and the biggest investment themes that will be shaping up this fiscal year.
From the impact of the West Asia conflict and rising oil prices to AI disruption in IT services, he explains what investors should prepare for in the coming quarters.
“The numbers so far for the last quarter result season have been fairly robust. They go on to show that we entered into the West Asia conflict in a fairly good shape. The outlook was a little clouded and I see FY27 earnings cut somewhere around 2% – 4% at Nifty or broader market levels,” Bhattacharya said.
I think it’s fair to assume that we will by and large resolve the major outstanding variables, which include oil at the north of $100 per barrel, by the June quarter which seems to be at play, he added.
Bhattacharya further said that the market is looking to factor in their fundamentals and particularly in the month of June it will get worse before getting better. “That’s the reason you are seeing the market reaction the way it is in the near-term. I think it’s a part of near-term short-term adjustment rather than anything to get worried about,” he added.
Will Q1 FI27 be the toughest quarter to deal with for corporate India?
“June will be the first month where the economy will feel the impact of higher fuel prices, slightly late monsoon and the likes of it. In my opinion, June quarter numbers will see the worst of the West Asia conflict in terms of financial impact. There could be a bit of spillover in the September quarter as well,” Bhattacharya said.
How Indian IT could play its role in the global AI wave?
“We think that certainly in the first wave of artificial intelligence (AI), which is more hardware and infrastructure-led which IT services are missing, but as it gets to a more deployment stage, IT services will play a part. What we are going through is a bit of a transition particularly in risk-off phases of markets.
Within IT we are positioned of course more towards midcap names which have continued to maintain their growth trajectory by and large despite the AI headwind,” Edelweiss AMC executive added.
How should one look at probably the most attractive segments of the market right now?
After going through this West Asia conflict we realised that we cannot have 70% – 80% imports coming through only the Strait of Hormuz. So, clearly, over the period of time, energy security is a big theme in my opinion over the next four to five years that will come out, Bhattacharya said.
He added that luxury consumption will continue to remain as a long-term theme.
India Inc’s Q4 FY26 earnings were decent but Q1 FY27 could be bumpy: Kotak
India Inc delivered better-than-expected earnings in the March quarter of FY26, but the current quarter could be “bumpy” as the ongoing West Asia conflict raises risks from higher oil prices and input costs, according to a Kotak Institutional Equities report.
In its latest strategy report, Kotak said that while the January-March quarter delivered stronger-than-anticipated earnings growth, rising energy prices and supply disruptions linked to the conflict in West Asia could weigh on business performance in the months ahead.
“4QFY26 results were decent but 1QFY27 could be bumpy,” the report said.
The brokerage noted that earnings growth during the March quarter exceeded its estimates across key market segments.
“4QFY26 net income of the Nifty-50 Index grew 6.6%, versus our expectation of 2.2% growth and net income of KIE Coverage Universe grew 14%, versus our expectation of 7.3% increase,” the report said.
