Corporate earnings for Q1FY26 are expected to reflect modest top-line growth, with aggregate sales projected to rise in single digits. However, net profits are likely to grow around 12% year-on-year, primarily driven by strong performance in oil marketing companies (OMCs) and the banking, financial services, and insurance (BFSI) sector, according to a recent report.

“India Inc. is expected to show mid single-digit sales growth but a much faster double-digit growth in operating and net profits driven by bumper earnings of oil marketing companies boosted by record gross refining margins and better profits of banking, financial services and insurance companies in the first quarter of financial year 2025-26,” Equirus Securities said in an earnings preview report.

The domestic brokerage house forecasts earnings before interest taxation depreciation and amortisation (EBITDA) growth of 12% and 11% in profit after tax, aided by strong performance of oil marketing companies and partly offset by muted earnings of banks in the coverage universe.

“The overall earnings trajectory for Q1FY26 remains resilient despite sectoral divergence. Strength in OMCs and chemical exports are cushioning the impact of weak consumption trends in durables and FMCG. We expect broad-based growth to resume by H2,” said Maulik Patel, Head of research, Equirus Securities.

While steel companies are forecast to post higher operating profit margins due to the imposition of safeguard duties on imports these are expected to moderate later in the year due to prevailing low steel prices in China the world’s largest producer and exporter of the commodity. “Maharatna Coal India is forecast to see earnings pressure due to subdued volumes resulting from declining market shares,” it said.

“OMCs are set for a strong EBITDA rebound in the quarter ended June 25 thanks to solid gross refining margins while city gas distribution companies may see 10-25% growth on better realisations and lower costs. We forecast Reliance Industries to post moderate growth driven by recovery in all segments in the just concluded quarter,” added Patel.

The earnings preview report by Equirus Securities forecasts product based industrial companies to maintain strong margins having passed on raw material inflation through price hikes. However, on a sequential quarter basis, margins in some cases may see slight moderation. For defense companies which have been the cynosure of investors eyes the April-June quarter is characterised by weakest execution and lowest margins of the entire fiscal year.

“Encouraging trends in infra spending, easing commodity prices, and export recoveries across agro and chemical segments position India Inc for stronger performance in the second half of FY26. While margin pressures remain in select sectors, strategic government push and festive season tailwinds are likely to aid recovery in domestic demand and improve earnings visibility across consumer-linked segments,” said Ajay Garg, Group CEO, Equirus.

Among key sectors, FMCG and staples are expected to report flat earnings as rural demand recovery offsets weak urban discretionary consumption. Price hikes may aid modest top-line growth.

For IT Services, ongoing macroeconomic headwinds are likely to weigh on performance, dampening typical seasonal tailwinds. Top-tier IT firms may report muted sequential growth in constant currency, ranging from -2.6% to +1.4%.

In case of cement space, volume growth is projected to moderate to 4-5% in Q1. However, a stronger recovery is anticipated in H2FY26, supported by government infrastructure push and a favorable base effect.

Among new age internet companies, food delivery platforms such as Swiggy and Blinkit parent Eternal are expected to post double-digit quarter-on-quarter growth in gross order value (GOV), alongside a recovery in margins.

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