Jefferies increased its FY27 MSCI India earnings growth forecast to roughly 15% after 56% of tracked companies surpassed quarterly performance expectations. Growth was heavily concentrated in private lenders, non-banking financial companies, power generators, and hospitality operators. However, profit growth remains uneven as automobile and cement manufacturers face persistent margin pressures from rising operational costs. Larsen & Toubro also weighed on industrial sentiment by missing expectations by 5% because of weaker core margins.
Key points
The overall profit cycle remains fragmented as flat consensus estimates indicate that bro…: The overall profit cycle remains fragmented as flat consensus estimates indicate that broad-based market acceleration is currently lacking.
Domestic consumer and industrial segments are displaying sharp divergence, with two-wheel…: Domestic consumer and industrial segments are displaying sharp divergence, with two-wheeler makers outperforming margin-squeezed four-wheeler manufacturers like Hyundai.
Robust pre-sales in real estate and solid utility earnings are currently driving corporat…: Robust pre-sales in real estate and solid utility earnings are currently driving corporate upgrades alongside large private financial institutions.
Sources checked by our analysis pipeline: 1
Of the 105 companies under Jefferies’ coverage that have reported Q2 results, 50% saw their FY27 earnings estimates upgraded. The ratio was broadly stable from the previous quarter’s 52%, while 41% of companies saw downgrades and 9% remained unchanged.
Jefferies also said 56% of the companies reported results above expectations, up from 52% in the previous quarter.
The brokerage has raised its FY27 MSCI India earnings growth forecast by 1 percentage point to about 15%. However, consensus earnings estimates have remained broadly flat so far, suggesting that the upgrades have not yet translated into a wider market-wide earnings reset.
“The Sep’26 quarter results so far have been healthy with upgrade ratio sustaining at 50%+,” Jefferies said in its strategy note.
Banks, two-wheelers, power utilities and consumer technology companies were among the stronger areas during the quarter. Large private banks delivered better-than-expected results, supported by stronger net interest income and lower credit costs. Jefferies raised its FY27 earnings estimates for all banks by 3% to 7%.
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