Q1 earnings review: Nifty PAT growth hits 10-quarter high at 18% in Q1FY27, beats estimates
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Nifty-50 companies delivered a stellar earnings performance in the first quarter of FY27, with aggregate profit after tax (PAT) rising 18% year-on-year (YoY). The growth hit a 10-quarter high, beating Motilal Oswal Financial Services’ (MOFSL) 10% estimate.
The strong performance was broad-based, with 19 sectors exceeding the brokerage’s expectations. Financials, metals, oil & gas excluding oil marketing companies (OMCs), automobiles, chemicals, textiles and real estate were among the key sectors driving the earnings growth, MOFSL said in a report.
“The 1QFY27 corporate earnings season concluded on a strong note, demonstrating widespread outperformance across all key aggregates,” the report noted.
For the MOFSL universe, excluding OMCs, sales, EBITDA and PAT grew 18%, 15% and 22% YoY, respectively, compared with the brokerage’s estimates of 15%, 10% and 15%.
Five stocks contributed 60% of incremental Nifty earnings
The Nifty-50's 18% PAT growth was led by ONGC, Hindalco Industries, Reliance Industries, JSW Steel and Bharti Airtel. “These five companies contributed 60% to the incremental YoY accretion in earnings,” according to MOFSL.
On the other hand, InterGlobe Aviation, ITC, Dr Reddy’s Laboratories, Tata Motors PV and Cipla were among the companies that weighed on Nifty earnings.
The report highlighted that strong performance extended beyond large caps, with all market-cap segments in MOFSL’s coverage universe delivering better-than-expected earnings growth.
Among 89 large-cap companies, earnings rose 21% YoY, broadly in line with the overall universe but ahead of MOFSL’s estimate of 14%.
The 101-company mid-cap universe recorded 23% YoY earnings growth, beating the brokerage’s estimate of 17% and marking an 11-quarter high.
Small-caps delivered the strongest performance, with earnings across 186 companies rising 31% YoY, compared with MOFSL’s estimate of 22%. The brokerage attributed the growth partly to a favourable base, as small-cap earnings had increased only 1% YoY in Q1FY26. Financials and Oil & Gas were the key contributors.
BFSI, metals, oil & gas, tech lead growth
The growth was led by BFSI, metals, oil & gas excluding OMCs, Technology and Telecom. However, OMCs remained a significant drag on the overall earnings performance, reporting a loss of ₹18,100 crore against a profit of ₹16,200 crore in the year-ago period.
Cement and InterGlobe Aviation were among the other key drags. InterGlobe Aviation reported a loss of ₹380 crore in Q1FY27, compared with a profit of ₹2,160 crore a year earlier.
As per the report, around 48% of companies in the MOFSL universe exceeded the brokerage’s PAT estimates, while 25% reported a miss. Large-caps recorded the strongest beat ratio, with 57% of companies exceeding estimates. The corresponding ratios for mid-caps and small-caps stood at 39% and 48%, respectively.
The earnings revision trend also turned favourable. As many as 130 companies in MOFSL’s coverage universe reported earnings upgrades of more than 3%, compared with 89 companies that saw downgrades of more than 3%. This resulted in an upgrade-to-downgrade ratio of 1.5 times for FY27 estimates.
MOFSL raises Nifty EPS estimates
Following the stronger-than-expected quarter, MOFSL raised its FY27 Nifty earnings-per-share (EPS) estimate by 0.6% to ₹1,232. The upgrade was largely driven by Reliance Industries, Hindalco, ONGC, ICICI Bank and State Bank of India.
The brokerage also raised its FY28 Nifty EPS estimate by 0.3% to ₹1,425 from ₹1,422, supported by upgrades for SBI, ICICI Bank, Hindalco, Bajaj Finserv and Bajaj Auto.
MOFSL’s preferred Nifty 50 stocks include Bharti Airtel, ICICI Bank, SBI, Titan Company, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, InterGlobe Aviation and Apollo Hospitals.
Among non-Nifty 50 stocks, its top ideas include TVS Motor, BSE, GE Vernova T&D, HDFC AMC, Lenskart Solutions, Indian Hotels, Meesho, Dixon Technologies, Coforge, Radico Khaitan, Delhivery, Kirloskar Oil Engines, RBL Bank, TBO Tek and Arvind.
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