India Inc likely to post 15 pc earnings CAGR over FY26-FY28: Report
New Delhi, July 6
India Inc's corporate earnings are pegged at a compound annual growth rate of around 15 per cent during FY26-FY28, supported by improving macroeconomic conditions, easing geopolitical concerns and stronger earnings visibility, a report showed on Monday.
The report by Motilal Oswal Financial Services Ltd. (MOFSL) said India is entering a more favourable phase after nearly two years of market consolidation, with attractive valuations positioning domestic equities to benefit from a potential rotation of global capital beyond artificial intelligence (AI)-focused sectors.
Easing energy prices, improving macroeconomic stability and strengthening corporate fundamentals are creating a constructive environment for Indian equities over the medium term, it added.
For the June quarter (Q1FY27), the domestic brokerage has expected that earnings across its coverage universe will decline 3 per cent year-on-year, largely due to weakness in oil marketing companies (OMCs).
However, excluding OMCs, profit after tax (PAT) is projected to grow 14 per cent year-on-year, indicating healthy earnings momentum across several sectors.
Sector-wise, the report said financials and metals would lead earnings growth during the quarter.
Lending non-banking financial companies (NBFCs), private and public sector banks, metals, technology, capital goods, retail, consumer durables and building materials are also expected to post healthy performances.
In contrast, the oil and gas, automobile, healthcare and cement sectors are likely to weigh on overall earnings growth.
Investors should closely track two key factors in the coming months -- the direction of foreign institutional investor (FII) flows and the market's ability to absorb a robust pipeline of initial public offerings (IPOs) and capital raising without affecting liquidity, the brokerage said.
The report said that India's long-term growth fundamentals remain intact, with the next phase of the market expected to be driven increasingly by company-specific earnings performance and execution rather than broad market trends.
— IANS
Reader Comments
Finally some positive news! 🇮🇳 With FII flows improving and IPOs coming, it's a good time for retail investors. Just need to be careful about the oil & gas sector drag. Financials and metals should be solid bets.
Good analysis by MOFSL. The key will be execution - corporate India needs to deliver on these projections. The IPO pipeline is huge so liquidity management is crucial. Let's see if the government's policies support this growth.
I'm cautiously optimistic. The 3% dip in Q1 due to OMCs is expected with global oil volatility. But 14% ex-OMC growth is solid. Hope this reflects in broader market sentiment and not just index stocks.
Hard to get excited when healthcare and auto are dragging. Those are huge employment sectors. Also, geopolitical uncertainties haven't really eased. Still, India's fundamentals are better than most emerging markets.
As someone who works in tech, I'm glad they mentioned rotation beyond AI-focused sectors. Other sectors need attention too. But 15% CAGR is ambitious - hope execution matches the hype. Need to watch FII flows closely. 📈
The report mentions attractive valuations but markets are already
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