Motilal Oswal has raised its Nifty EPS estimates for both FY27 and FY28 after reviewing early results for the July-September quarter, signalling that the earnings recovery is gaining traction and is broader than many expected.
230 companies in the MOFSL Universe (covering 71% of estimated PAT) and 35 Nifty companies (66% of Nifty PAT) had reported.
For the MOFSL Universe, sales rose 26%, EBITDA 24% and PAT 33% year-on-year (well ahead of the firm’s estimates of 19%, 14% and 19%). This was the highest PAT growth in 12 quarters. Even after excluding oil marketing companies, PAT still grew 30% against an estimate of 22%.
Large-caps (66 companies) grew PAT 30% (in line with the overall universe and ahead of the 22% estimate). Mid-caps rose 26% (versus 23% estimated). Small-caps led with 34% growth (versus 28% estimated), helped by a soft base from the previous year.
On the Nifty, the 35 companies that reported delivered sales growth of 22%, EBITDA growth of 17% and PAT growth of 22%, compared with estimates of 16%, 14% and 20%. Five companies (Reliance Industries, JSW Steel, ICICI Bank, Coal India and Axis Bank) accounted for 59% of the incremental year-on-year profit. The main drags were Jio Financial, Cipla, Dr Reddy’s, Maruti Suzuki and InterGlobe Aviation.