Nifty aggregate profit to fall in Q4 but expect a better FY27

Mumbai: Aggregate net profit of the Nifty 50 companies for the March quarter is likely to dip year-on-year on account of a combination of factors, including one-time gains reported by a few companies in the year-ago quarter and lower expected profit of select banking, pharma and IT companies. According to the ETIG estimates, net profit is expected to fall 1.1% year-on-year in the March 2026 quarter. Revenue is expected to grow 8.3% year-on-year after hitting a 9-10% range in the prior two quarters.

“Indian corporate earnings are expected to be slightly subdued in the March quarter, driven by geopolitical escalations in West Asia and operational challenges for most companies due to a rise in commodity prices,” said Shweta Rajani, associate director, Anand Rathi Wealth. She added that the impact of higher commodity prices is expected to weigh on profitability across sectors including consumption, manufacturing, and industrials where input cost pressures may not be fully passed on.

Barring one-off items, the earnings growth for the sample is expected to be in low-to-mid single digit. “We expect earnings of the companies under our coverage to grow 10% year-on-year and Nifty 50 earnings to grow 6% for the March 2026 quarter,” said Gautam Duggad, institutional research head, Motilal Oswal Financial Services.

The ETIG estimates exclude the financials of Tata Motors Passenger Vehicles since the year-ago numbers are not comparable after the company’s commercial vehicles business was split and formed into a separate listed entity.

The sample’s operating margin is likely to contract by 70 basis points year-on-year to 22.2% for the March quarter. “Higher crude and commodity prices are likely to put pressure on margins across sectors such as consumption, industrials, and manufacturing,” said Rajani. The margin has remained in a range of 22-24% over the past five quarters to December 2025.

On the sector front, sectors including automobiles, banking and financial services, metals are likely to fare better while IT companies, select pharma and consumer durables companies are likely to report subdued numbers.

After a challenging environment in FY26, analysts expect recovery in the current fiscal year. “The earnings trajectory across segments indicates that FY26 is likely to be a year of consolidation, followed by a meaningful recovery in FY27,”said Rajani. She expects 12% earnings growth for Nifty 50 companies in FY27 compared with an estimated 4-6% growth in FY26 based on likelihood of stabilisation in global demand conditions, improving operating leverage and momentum in the capital expenditure cycle. Duggad expects a plethora of policy measures should incrementally prop up earnings growth. “Currently, we estimate over 13% and 11% annualised earnings growth for companies under our coverage and for the Nifty respectively over FY25-27,” he said.