India Inc is all set for the Q2 earnings season. Major Nifty companies like TCS, HCL Technologies, Tech Mahindra, and Axis Bank are scheduled to announce their second-quarter earnings over the next 5 days.
Nuvama expects corporate India to report another set of muted earnings for the quarter, marking the tenth straight quarter of subdued topline growth. It projects the topline growth for its coverage universe, excluding oil marketing companies, to rise around 6 per cent year-on-year, while profit growth is expected at 8 per cent.
“Overall, we reckon Nifty 50 earnings will expand 8% YoY in Q2FY26—similar to Q1FY26 and in line with the full-year Nifty EPS growth forecast of 9%,” the report noted. Nuvama also highlighted key factors impacting earnings this quarter.
Cement to shine in Q2; IT, banks may lag
In terms of sector specific performance, the topline growth is expected to be strong in electronics manufacturing services, internet, telecom, NBFCs, cement and non-lending financials.
Moderate growth is expected in retail, industrials, domestic autos and consumer services such as hotels and airlines.
However, IT, banks, metals, energy, FMCG and durables are likely to post weaker numbers.
US tariffs to weigh on Indian corporates
The brokerage noted that US tariffs are likely to narrow the country’s current account deficit (CAD), hurting global trade and indirectly impacting Indian corporates. The report highlighted that around two-thirds of the BSE500’s topline is influenced by global trade. “The impact is likely to be broad-based and not just on exporters’ as weak exports force corporates to scale back costs/capex, impacting domestic cyclicals demand as well.”
GST cuts, festive tailwinds to aid demand in H2FY26
While global factors may cap earnings upside, domestic sentiment could improve during the festive quarter. The report noted that GST cuts could boost demand during this period, although analysts believe it may not be enough to fully offset external headwinds. “Watch out for global macros (post-tariffs), festive demand (post-GST cuts), and BFSI asset quality,” the report said.
Analysts expect spending to strengthen in the second half of FY26 as the benefits of GST 2.0 reforms, lower interest rates, and stable inflation start reflecting in demand.
Nuvama added that the large post-Covid margin expansion has stabilised and is now reverting to normal levels, aligning profit growth more closely with the slower topline expansion.