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Informist, Tuesday, Apr. 7, 2026

MUMBAI – Motilal Oswal Financial Services has cut earnings estimate of Indian companies to account for the impact of higher crude oil and gas prices due to the US-Iran war in March. The brokerage expects the Nifty 50 companies' earnings to rise 6% in the March quarter which suggests these companies' earnings in 2025-26 (Apr-Mar) will also rise 6%. Motilal Oswal had expected the FY26 earnings growth to be 8% in January.

"The lower growth in 4Q is clearly attributable to the impact of higher crude oil and gas prices flowing through various energy and crude derivative-consuming sectors," the brokerage said in its strategy report. "This is also reflected in our earnings revisions, as the trend of positive earnings revisions over the past two quarters reversed in Mar'26."

The 6% growth in the index companies' earnings for the March quarter was similar to the growth seen in the March quarter of last year, but sharply lower than the 11% growth in the December quarter, Motilal Oswal's figures showed. The brokerage expects non-banking financial services, metals, private banks, retail, and telecommunications to report earnings growth above 10% and those of oil and gas, real estate, and healthcare to be in a single digit.  

Motilal Oswal expects the Nifty 50 index companies' revenue growth in the March quarter to improve to 13% from 12% a quarter ago and 9% in the March quarter of last year. Though the ongoing US-Iran war has hit the current earnings estimates, the impact is not as sharp as in FY25, the brokerage said. Moreover, it expects government policy measures to incrementally support earnings growth going forward.

The brokerage also trimmed the FY26 earnings per share estimate for Nifty 50 companies by 2% to INR 1,060. The estimates for the 50 companies' earnings per share for FY27 and FY28 were also cut by 1.3% each to INR 1,246 and INR 1,440, respectively. With this, Motilal Oswal expects the earnings per share of these companies to grow 5%, 18% and 16%, respectively, on a year-on-year basis in FY26, FY27, and FY28. 

Following the sharp underperformance of India compared with other emerging markets in FY26, along with record foreign fund outflows, a favourable base has likely been set for Indian equities, Motilal Oswal said. The domestic equity market underperformed the MSCI Emerging Markets Index by 34% in FY26, likely the most severe over the past two decades. While the duration of the ongoing war remains the key overhang, a resolution to the conflict is expected to release pent-up positive sentiment and help Indian markets recoup some of the losses and underperformance experienced in FY26, the brokerage said. After the recent correction of around 10% since the start of the US-Iran war, valuations of domestic equities have become much more sober, it added.  End

Reported by Anshul Choudhary and Arya S. Biju

Edited by Akul Nishant Akhoury

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