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Informist, Tuesday, Jul. 7, 2026

 

MUMBAI – The cumulative profit of Nifty 50 companies is expected to rise only 4.5% on year in the June quarter, JM Financial Institutional Securities Ltd. said in a research report. The brokerage's projection of the net profit for Nifty 50 companies is sharply lower than estimates by its peers such as Motilal Oswal Financial Services Ltd., Nuvama Institutional Equities, and Kotak Securities, which see the cumulative net profit of the group rising 9-10%. The brokerage sees the collective revenue of Nifty 50 companies rising 19% on year.  

 

The brokerage expects the net profit of Nifty 50 companies to be dragged down by a poor show by automobile, pharmaceutical, consumer goods, and public sector banks in the June quarter. Meanwhile, metals and mining, telecommunication, private banks and information technology companies are likely to support the bottom line growth within the 50-stock index. The brokerage expects a sharp rise in revenues of Nifty 50 companies that are in sectors such as internet, oil and gas, and metals and mining. Sales growth of pharmaceutical and industrial companies is seen weak. 

 

JM Financial expects the bottom line of automobile companies in the 50-stock index to decline over 13% on year, with Tata Motors expected to report a sharp decline in its net profit due to supply chain disruptions at its subsidiary Jaguar Land Rover and input cost pressures. Maruti Suzuki India Ltd. will likely be impacted by a sharp decline in its non-operating income. The brokerage has a negative view on the profitability of automobile and automobile ancillary companies under its coverage due to higher input costs caused by supply disruptions after the war in West Asia. It expects contraction of 160 basis points year-on-year in the earnings before interest, tax, depreciation, and amortisation of such companies under its coverage. Eicher Motors Ltd. is the brokerage's top pick in this sector. 

 

Consumer-facing companies of the Nifty 50 are expected to cumulatively report a 9% on-year decline in their net profit. However, the revenue growth trajectory is expected to improve due to resilient demand and price hikes. Nestle Ltd. could see sustained sales momentum, while Tata Consumer Products Ltd. could see moderation in sales growth, JM Financial said. The profitability of ITC Ltd. is expected to be hit particularly hard due to the adverse impact of higher taxes, the brokerage said.

 

The cumulative profit of pharmaceutical companies is expected to decline 16% on year, although they contribute to just 3% of the index's weight. This sharp decline reflects the absence of cancer drug generic Revlimid's contribution to the top lines of Cipla Ltd. and Dr Reddy's Laboratories Ltd., a trend seen for the past few quarters after exclusivity on the high-margin drug expired. Across its coverage, JM Financial expects a strong quarter from hospital operators.

 

The net profit of public sector banks, which contribute to 7% of the Nifty 50's index weight, is expected to fall 1% on year. Margin compression, lower non-interest income, and higher credit costs at State Bank of India Ltd. will likely drag down the sectoral performance. 

 

Of the sectors expected to perform well, the brokerage said that the bottom line of metal companies in the Nifty 50 index is expected to rise over 35%. Realisations of steel players are expected to rise in the June quarter on the back of increasing flat steel prices. The brokerage expects blended realisation for ferrous names to increase by INR 3000 per tonne sequentially. However, volumes are expected to trend down sequentially given a seasonally weak quarter, JM Financial said. Ferrous companies are likely to witness EBITDA per tonner expansion of around INR 2,000 per tonne in the June quarter given higher realisations, but partially offset by higher coking coal costs. The brokerage's top pick among metals and miners is Tata Steel Ltd. 

 

The brokerage sees the net profit growth of IT services companies at 13% on year, but down nearly 13% sequentially. While the June quarter is a seasonally strong quarter, management commentary for the trailing quarter pointed to a soft start to 2026-27(Apr-Mar), owing to disruptions arising from the West Asia conflict and ongoing artificial intelligence-led pricing deflation. Furthermore, Accenture's March quarter commentary indicates a risk of further earnings downgrades in the September quarter, the brokerage said.   

 

JM Financial projected bottom line growth of over 8% on year for private banks within the 50-stock index. They contribute to 35% of the Nifty 50. As per provisional updates for the June quarter, deposit mobilisation has remained healthy for most large private banks such as Axis Bank Ltd. and HDFC Bank Ltd., while Kotak Mahindra Bank Ltd. saw relatively weaker liability growth, the brokerage said.  End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Eshitva Prakash

Edited by Avishek Dutta

 

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