Fall in energy, commodity prices to aid Indian cos' FY27 earnings - Kotak Sec
This story was originally published at 12:35 IST on 16 June 2026
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MUMBAI – A fall in global energy and commodity prices will improve the earnings visibility for Indian corporates in 2026-27 (Apr-Mar), Kotak Institutional Securities said. Commodity sectors will contribute 40% of incremental earnings growth in FY27. India's macroeconomic pressures will also likely subside if crude oil prices are below $95 per barrel this financial year, the brokerage said.
A meterial decline in raw material prices will limit headwinds to profitability of consumer and investment-oriented sectors, Kotak Institutional said. Risks to banks' asset quality may also come down, it added. However, dangers from a weak monsoon may weigh on India's growth-inflation curve, the brokerage noted. "Indian markets may see a moderate re-rating on expectations of better macro and broader earnings resilience," Kotak Institutional said.
It added that the multiple compression for the market was driven by a correction in banks and information technology stocks. Most consumption and investment-oriented stocks were still found lofty, according to the broking firm. It remains overweight on companies within the banking, financial services, and insurance, real estate, and transportation sectors. "...our defensive overweight positions on healthcare, pharmaceuticals and telecom remain reasonable-to-attractively placed," the brokerage said.
The brokerage expects the Nifty 50 to post 18% and 14.2% earnings growth over FY27 and FY28, respectively. A moderate decline in gross and earnings before interest, tax, depreciation, and amortisation margins is still likely, even as profit is expected to rise in FY27, due to the rise in raw material prices seen during the second half of FY26 and in the June quarter of FY27. End
Reported by Ruchira Kagita
Edited by Avishek Dutta
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