Domestic brokerage house Motilal Oswal expects strong broad-based earnings growth in Q2 FY27, with aggregate earnings for its universe surging 22% YoY, the highest growth in 11-quarters and excluding oil marketing companies earnings to grow 24%, the highest in 12-quarters. The earnings are likely to be anchored by financials, led by banks (private and PSU, NBFCs, metals, oil and gas (ex-OMC), and telecom.
NDTV Profit's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer NDTV Profit's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Motilal Oswal Report
Domestic brokerage house Motilal Oswal expects strong broad-based earnings growth in Q2 FY27, with aggregate earnings for its universe surging 22% YoY, the highest growth in 11-quarters and excluding oil marketing companies earnings to grow 24%, the highest in 12-quarters.
Also Read | Layoffs Are Rising In Tech, But These Skills Are Helping People Unlock Better Pay
Earnings are likely to be anchored by financials, led by banks (private and PSU, NBFCs, metals, oil and gas (ex-OMC), and telecom.
The brokerage's large-/mid-/small-cap universes are likely to register PAT growth of 23%/11%/29% YoY. Ex-OMCs large- and mid-cap universes are likely to register stronger PAT growth of 25% and 20%, respectively.
Nifty-50 aggregate earnings are expected to grow 27% YoY, the highest in 17 quarters, in Q2 FY27.
As the Q2 FY27 earnings season begins, Motilal Oswal believes five key factors will shape investor sentiment and determine the market's next direction:
- Global interest rates and capital flows: The sharp rise in global bond yields to multi-decade highs, alongside a potential shift toward a higher-for-longer rate environment, could encourage global investors to rotate toward fixed income and away from EM equities. A sustained rise in global yields could therefore remain a key headwind for equity markets.
- Energy prices, input cost inflation, and margin pressure: Elevated crude oil prices and rising input costs pose a risk to India's macroeconomic and corporate margin outlook. A prolonged delay in crude price normalization, coupled with broader input cost pressures, could test the resilience of corporate margins.
- Sustainability of the AI-led trade: The strong and sustained performance of AIrelated equities continues to attract a disproportionate share of global capital. Any meaningful moderation in the AI trade could trigger a reallocation of capital toward EMs, including India, which has seen relative pressure as global flows have remained concentrated in AI and technology-led themes.
- FII flow dynamics: FII selling has been a key constraint on India's market performance over the past two years. A shift from aggressive selling toward a neutral stance, even without a meaningful return of FII buying, could provide a significant tailwind for equities. With DII and retail flows remaining resilient, a stabilization in FII flows could materially improve the liquidity backdrop.
- Primary market supply: The robust pipeline of large IPOs and other capitalraising activities is likely to remain an important test of market liquidity, as witnessed over the past two years. The market's ability to absorb this supply without crowding out secondary-market flows will be a key indicator of the underlying strength and depth of domestic liquidity.
Click on the attachment to read the full report:
DISCLAIMER
This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.
Users have no license to copy, modify, or distribute the content without permission of the Original Owner.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
