Corporate India posts strongest profit growth in 10 quarters

Corporate India delivered a stronger-than-expected performance in the June quarter, with profits of Nifty 50 companies growing an average 18% — the fastest pace in 10 quarters — reinforcing expectations of sustained earnings growth despite mounting margin pressures.

Five brokerages said earnings and revenue growth remained robust across large-, mid- and small-cap companies, with Motilal Oswal describing the quarter as “picture perfect”. Oil marketing companies were the notable exception, hit by uncertainty and volatility in the Middle East.

According to Motilal Oswal, 19 sectors exceeded earnings estimates, while the upgrade-to-downgrade ratio improved to 1.5. This means analysts upgraded around 15 companies for every 10 downgraded, pointing to a strengthening earnings outlook for the remainder of the financial year.

Brokerages expect festive demand, GST-supported consumption, expanding credit and investment activity to provide key support to corporate earnings in fiscal 2027.

Large caps lead earnings beat

Among Nifty 50 companies, Hindalco, Reliance Industries, JSW Steel, ONGC and Bharti Airtel were among the strongest performers, analysts said.

Banks benefited from faster loan growth, lower credit costs and operating leverage, Jefferies said. Non-bank financial companies also recorded strong growth in assets under management, while asset quality remained broadly stable.

The metals sector gained from improved pricing, while retail, jewellery, paints, selected internet companies and consumer staples benefited from resilient demand, premiumisation and, in some cases, higher prices.

Oil companies remain weak spot

The upbeat outlook was tempered by weakness among oil marketing companies, which reported sharp first-quarter losses.

Higher crude prices outweighed strong refining margins, leaving earnings vulnerable to fuel-price pass-through, inventory movements and crude-price volatility in the coming quarters.

Analysts also warned that rising input costs could constrain margins across several sectors. Higher prices for metals, crude derivatives and palm oil, along with elevated freight and wage costs, affected industries including automobiles, consumer goods and logistics.

IT services companies faced pricing pressure linked to artificial intelligence, while banks experienced continued compression in net interest margins.

Despite these challenges, the broad-based earnings improvement and rising analyst upgrades suggest corporate India is entering the remainder of fiscal 2027 with a relatively stronger profit outlook.