New Delhi, Aug 17 — Nifty companies reported 18 per cent year‑on‑year growth in profit after tax (PAT) in Q1 FY27, the highest growth in 10 quarters, a report said on Monday.
The report from Motilal Oswal Financial Services said the strength was broad‑based, with 19 sectors exceeding expectations and the earnings upgrade‑to‑downgrade ratio turning positive at 1.5 times.
The top 5 contributors to Nifty 50 earnings together accounted for 60 per cent of the increase in earnings.
The positive trend was visible well beyond the Nifty 50. Excluding oil marketing companies (OMCs), the companies covered by the brokerage recorded 18 per cent growth in sales, 15 per cent growth in EBITDA and 22 per cent growth in PAT, beating estimates across all three measures.
Financials, metals, oil & gas excluding OMCs, technology and telecom were among the key growth drivers.
Mid- and small-cap companies also delivered a strong quarter. Large-cap earnings grew 21 per cent YoY, while mid-cap earnings rose 23 per cent, marking an 11-quarter high.
Small-cap earnings grew an even stronger 31 per cent, well ahead of the 22 per cent estimate, led mainly by financials and oil & gas.
Nearly half of companies in brokerage’s coverage universe beat PAT estimates, with 48 per cent exceeding forecasts and 25 per cent missing, while among large caps, 57 per cent topped estimates.
The earnings outlook is also improving as a total of 130 companies saw earnings upgrades of more than 3 per cent, compared with 89 companies that saw downgrades of more than 3 per cent, resulting in a 1.5-fold upgrade-to-downgrade ratio.
This improvement has also led to a modest upward revision in Nifty 50 earnings expectations. The FY27 Nifty EPS estimate has been raised by 0.6 per cent to Rs 1,232, while the FY28 estimate has been raised by 0.3 per cent to Rs 1,425 from Rs 1,422.
Financials, metals and oil & gas excluding OMCs were among the strongest contributors to the quarter. Automobiles, chemicals, textiles and real estate also recorded strong earnings growth.
OMCs, however, remained a drag on overall earnings, with elevated crude oil prices weighing on their performance.