Motilal Oswal Ups Nifty EPS Forecasts for FY26 and FY27, Predicts Sustained Earnings Momentum

Motilal Oswal Financial Services (MOFSL) has revised its Nifty earnings per share (EPS) estimates upward for FY26 and FY27 after a stronger-than-expected second-quarter earnings season. The upgrade was primarily driven by robust performances in commodities and mid-cap companies.

Nifty EPS Raised for FY26 and FY27

The brokerage now projects Nifty EPS for FY26 at ₹1,101, up from ₹1,096, and for FY27 at ₹1,278, up from ₹1,274. The marginal revision comes on the back of solid quarterly results from HDFC Bank, Tata Steel, UltraTech Cement, Dr. Reddy’s Laboratories, and Shriram Finance.

“Our revised Nifty EPS estimates reflect modest but broad-based strength led by financials, commodities, and infrastructure sectors,” said Gautam Duggad, Abhishek Saraf, Deven Mistry, and Aanshul Agarwal of Motilal Oswal in their report dated November 3.

Strong Q2FY26 Earnings Season

Out of the 151 companies in the MOFSL Universe that have reported results so far, earnings rose 14% year-on-year (Y-o-Y)—well above the 9% forecast. The growth was led by Oil & Gas (up 79%), Cement (147%), Technology (8%), Capital Goods (17%), and Metals (7%). Together, these sectors contributed nearly 86% of total earnings growth.

Even excluding global commodity players like Metals and Oil & Gas, the universe delivered 6% Y-o-Y growth, beating expectations of 2%.

Within the Nifty 50, 27 companies have reported Q2 results, showing 5% Y-o-Y growth, slightly below the estimated 6%. Major contributors to this growth included HDFC Bank, Reliance Industries, TCS, JSW Steel, and Infosys, while Coal India, Axis Bank, ITC, HUL, and Kotak Mahindra Bank acted as drags.

Mid-Caps Continue to Outperform

Mid-cap companies outshone once again, recording 26% Y-o-Y earnings growth versus the estimated 19%, marking their third consecutive quarter of outperformance. Key growth sectors included Technology, Cement, Metals, PSU Banks, Real Estate, and NBFCs.

Large-caps grew 13%, while small-caps lagged behind with a 3% rise, weighed down by weakness in Private Banks, Retail, Technology, and Media.

Margins and Forecast Outlook

The growth drivers of Oil & Gas, Technology, Cement, Utilities, and Chemicals contributed the most to the increase of Ebitda margins in the MOFSL Universe (excluding Financials), which was 170 basis points (bps) to 16% in total. On the contrary, sectors like Telecom, Healthcare, Retail, Real Estate, and Media performed poorly.

The results of large-caps (84%), mid-caps (77%), and small-caps (69%) well exceeded or matched the forecasts. Regardless, the ratio of upgrades to downgrades for FY26 earnings was only 0.7x, resulting in 29 cases of upward revisions and 42 cases of downward revisions of more than 3%.

Still, analysts are holding a positive view, saying that the earnings will keep the same flow coming through the latter half of FY26, as supported by the strong sectoral trends and the increase in profits from commodity-related sources.