HPCL, Oil India, IDFC First Bank, Coal India and NTPC were among the stocks that saw the sharpest upgrades to FY27 earnings estimates in September, while InterGlobe Aviation, BPCL, Voltas, ICICI Lombard and Bajaj Finance featured among the biggest downgrades, according to Axis Capital's latest India Strategy report.
HPCL saw the biggest FY27 earnings estimate increase at 88.4%, followed by Oil India at 3.6%, IDFC First Bank at 2.6%, Coal India at 2.5% and NTPC at 2.1%. Other stocks that saw upgrades included IndusInd Bank, One97 Communications, JSW Energy, Supreme Industries and KEI Industries.
On the downgrade side, InterGlobe Aviation saw the steepest cut, with its FY27 earnings estimate reduced by 15.1%. BPCL followed with a 5.9% cut, while Voltas, ICICI Lombard and Bajaj Finance saw reductions of 4.5%, 4.3% and 3.3%, respectively. HDFC Life, Havells India, Tata Motors Passenger Vehicles, Tata Elxsi and Godrej Properties were also among the stocks with lower FY27 estimates.
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At the sector level, energy was the main beneficiary of September upgrades, as crude prices rose amid escalating tensions in West Asia. Utilities also saw positive revisions. On the other hand, industrials faced earnings cuts, with InterGlobe Aviation affected by higher crude prices, while real estate estimates were lowered largely because of delays in revenue recognition at Godrej Properties.
Financials saw pressure on FY28 estimates, led by insurance and NBFCs. Axis Capital attributed the insurance cuts to IRDAI reforms, while NBFC estimates could face pressure if potential rate hikes raise borrowing costs.
Despite the stock-specific earnings revisions, Axis Capital said aggregate NSE200 FY27 and FY28 earnings estimates remained largely steady through September. The three-month rolling FY27 earnings cut improved to -0.1% from -0.5% in August, while FY28 remained broadly flat at -0.2%.
The bigger valuation story is playing out in mid- and small-caps. The mid-cap premium over the Nifty eased from 55% in early September to 52% at month-end, but remained well above its 27% long-term average. The small-cap premium climbed to a record 30%, with mutual fund flows shifting incrementally towards mid- and small-cap schemes.
Axis Capital said FY27/FY28 earnings growth estimates for mid-caps remain stronger at 24%/21%, compared with 13%/17% for large-caps. Meanwhile, its valuation framework showed IT, financials and real estate as relatively cheaper, while pharma, industrials and utilities appeared more expensive.
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