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Informist, Monday, Aug. 4, 2025

 

NEW DELHI – Motilal Oswal Financial Services Ltd. has cut earnings per share estimates of Nifty 50 companies for 2025-26 (Apr-Mar) by 1.1% and for FY27 by nearly 0.8%, it said in a report on Monday. It now expects earnings per share of Nifty 50 companies for FY26 to be INR 1,110. The brokerage firm has increased its focus on midcaps in its model portfolio.

 

For FY26, Motilal Oswal has penciled in a 10% growth in earnings per share, compared to 1% in FY25. "(This is) aided by a likely improvement in the macro environment owing to the stimulative fiscal and monetary measures," it said. "Markets have staged an impressive recovery from the Apr'25 lows, and even though Jul'25 has been somewhat weak, we believe that better earnings prospects and reasonable valuations (barring small-caps) should help the market to eke out gains," it added. Motilal Oswal expects the recently imposed tariff of 25% and a penalty by the US on Indian imports to have a limited impact on the market here. 

 

Motilal Oswal's model portfolio continues to have a bias towards large-cap stocks, at around 70% of the overall portfolio. It is now constructive on midcap stocks, raising its weight to 22% from 16?rlier on the back of better earnings delivery and improving prospects, it said in a report. "We are OW (overweight) on BFSI, Consumer Discretionary, Industrials, Healthcare & Telecom, while we are UW (underweight) on Oil & Gas, Cement, Real Estate, and Metals," it said.

 

In its reworked estimates, EPS on only two Nifty 50 companies have improved by more than 3%. The EPS estimate of Tata Consumer Products Ltd. has been upgraded by nearly 10% for this fiscal year and that of Eicher Motors Ltd. has been upgraded by nearly 4%, Motilal Oswal said. Meanwhile, EPS estimates of nine companies have been downgraded by over 3%. Eternal Ltd.'s EPS estimate has been downgraded by 35.4%.

 

These changes are part of Motilal Oswal's interim earnings review. Net profit for the June quarter of the 38 Nifty 50 companies that have declared their results so far has grown 7.5% on year compared to Motilal Oswal's estimate of 5.7%. This was driven by Reliance Industries Ltd., HDFC Bank Ltd., ICICI Bank Ltd., JSW Steel Ltd., Bajaj Finance Ltd., Larsen & Toubro Ltd., and Mahindra & Mahindra Ltd., who have contributed 100% to the incremental on-year accretion in earnings, it said.

 

Coal India Ltd., IndusInd Bank Ltd., HCL Technologies Ltd., Kotak Mahindra Bank Ltd., Axis Bank Ltd., and Eternal dragged Nifty 50's earnings lower, it added.

 

"Seven companies within the Nifty reported lower-than-expected profits, while fourteen recorded a beat and seventeen registered in-line results," the report said. While results of large-cap companies and mid-cap companies have been in line with the brokerage firm's estimates so far, those of small-cap companies have been below estimates.  End

 

Reported by Anand JC

Edited by Ashish Shirke

 

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