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Motilal Oswal Report
Motilal Oswal Financial Services estimates its universe/Nifty-50 earnings to grow 10%/6% YoY in Q4 FY26.
Barring financials, the brokerage projects earnings to increase 9%/4% YoY. Further, excluding metals and oil and gas, the brokerage project the earnings to rise 9%/5% YoY for the quarter.
The overall earnings growth is anticipated to be healthy and will be anchored by financials – led by NBFC-Lending (+30% YoY) and private banks (+12% YoY) – metals (+27% YoY), telecom (11x YoY jump in profit, driven by Bharti Airtel and reduction in losses of Vodafone Idea), technology (+11% YoY), and automobile (+12% YoY). retail (+47% YoY), EMS (+17% YoY), and consumer (+10% YoY) are also expected to report healthy double-digit growth during the quarter.
These sectors are likely to contribute 80% of the incremental YoY accretion in earnings. Among the other key sectors, utilities (+5% YoY), O&G (+3% YoY), real estate (+2% YoY) and healthcare (+1% YoY) are likely to report low single-digit earnings growth.
While private banks (+12% YoY) are likely to contribute modestly, PSBs' (+2% YoY) contribution to earnings may moderate, whereas capital goods (-6% YoY), consumer durables (-5% YoY), and cement (-1% YoY) are anticipated to hurt earnings moderately.
Further, Motilal Oswal expects FY26/FY27/FY28 earnings to grow 13%/14%/18% YoY for its coverage universe and 6%/17%/15% for Nifty-50, respectively.
FY26/FY27/FY28 earnings, ex-financials, are projected to rise 14%/12%/17% YoY for the brokerage's universe. Barring metals and O&G, FY26/FY27/FY28 its universe earnings are projected to increase 9%/20%/18% YoY.
Motilal Oswal has cut its FY26E/FY27E/FY28E Nifty EPS by 2.0%/1.3%/1.3% and expect it to grow 5%/18%/16% YoY to Rs 1,060/ Rs 1,246/ Rs 1,440.
The automobiles, capital goods, logistics, technology, and utilities sectors have contributed to the majority of the reduction in our FY26 earnings estimate.
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