Nifty 50 companies might defy global volatility and post a nearly 23% year-on-year rise in net profit in the September quarter of this fiscal year (Q2FY27), according to major domestic brokerage estimates. This would mark the strongest earnings growth for India’s blue-chip companies in four quarters, even as analysts expect momentum to moderate in the second half of the fiscal year amid rising cost pressures.
Lower crude prices in July and August benefited corporations, particularly oil marketing companies, whose losses are expected to narrow from the June quarter, Elara Securities said in a recent report. Brent crude averaged below $90 a barrel during the two months before surging to $109 in September. “The full cost impact may reach P&Ls (income statement) only in Q3,” the brokerage said.
Brokerages broadly expect metals and mining, banks, consumer durables and export-oriented auto companies to lead the Q2FY27 earnings season, supported by rising global commodity prices, resilient domestic discretionary demand and a recovery in two-wheeler exports to Latin America, Africa and Asia. However, a low base is also likely to amplify the growth figures, as profit growth was sluggish in last year’s September quarter, noted Nuvama Institutional Equities.
“The benefit of the base effect should not be mistaken for a broad-based acceleration in underlying profitability,” said Feroze Azeez, joint CEO at Anand Rathi Wealth.
Analysts warned that rising raw material costs could squeeze profitability in fast-moving consumer goods, passenger vehicles, cement, and chemicals, as companies struggle to fully pass on these costs without hurting demand or losing market share to competitors.