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Motilal Oswal Report
In this report domestic brokerage firm Motilal Oswal Financial Services highlights that the Nifty-500 delivered robust double-digit earnings growth in Q4 FY26, despite heightened geopolitical tensions, disruptions in energy supply dynamics, and a moderating macroeconomic environment.
The aggregate earnings of the Nifty-500 universe grew 16% YoY. Excluding Financials, reported aggregate earnings jumped 17% YoY, whereas, excluding metals and oil and gas, aggregate earnings grew 12% YoY.
The aggregate sales/Ebitda/adjusted PAT of the Nifty-500 grew 12%/12%/16% YoY to ~Rs 38.6 trillion/Rs 8.2 trillion/Rs 4.8 trillion in Q4 FY26. Notably, the sales growth in Q4 FY26 was the highest in the past 13 quarters.
Midcaps outperform sharply:
- The midcap companies fuel the Q4 FY26 earnings performance of the Nifty-500. Aggregate earnings of the Nifty Midcap-150 companies grew 34% YoY, the highest in nine quarters, while the aggregate earnings of Nifty-100 and Smallcap-250 companies recorded 12% YoY and 13% YoY earnings growth, respectively.
Performance of various sectors and companies:
Of the 23 key sectors, 14 posted double-digit profit growth in Q4 FY26. Metals, O&G, and private banks collectively accounted for ~50% of the incremental YoY accretion in earnings. Notably, about 50% of companies (250) in the Nifty-500 reported earnings growth exceeding 15% YoY, while 33% of companies (164) experienced a decline or loss in Q4.
- The Ebitda margin of the Nifty-500 (excluding BFSI) came in at 17.7% (up 40bp YoY and 20bp QoQ) in Q4 FY26.
- Earnings remain strong in FY26, with aggregate Nifty-500 earnings growing 15% YoY. Barring Financials, earnings increased 19% YoY, while earnings growth excluding Metals and O&G stood at a healthy 12% YoY.
FY26 earnings leaders and laggards:
Incremental earnings growth in FY26 was primarily driven by Indian Oil, BPCL, HPCL, Reliance Industries, Tata Steel, Bharti Airtel, NTPC, Tata Motors CV, ONGC, and HDFC Bank.
Conversely, Tata Motors PV, Vedanta, Interglobe Aviation, Coal India, Kotak Mah. Bank, GAIL (India), Indus Towers, Authum Invest, IndusInd Bank, and Axis Bank were the key earnings laggards, weighing on overall profit growth.
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