India Inc is expected to turn in a reasonably steady performance, with net profits for the Nifty basket seen growing in the single digits at 6–7% year-on-year, while the broader universe may do better at 9–10%. But more than the headline numbers, it is the commentary that the Street will watch closely this earnings season.
Software services firms and other export-oriented businesses are likely to have gained from the sharp depreciation of the rupee during the quarter. Automakers benefited from GST-led demand support, while metals producers rode on firm prices.
However, the disruption from the war in West Asia and the risk of it intensifying has led to a meaningful trimming of FY27 profit estimates. Some businesses are already grappling with energy shortages. The Street is now penciling in profit growth of about 7.5–8% for FY27, down sharply from the 14–15% projected before the conflict.
Auto-sector to be a bright spot
The auto sector is expected to be a bright spot. With passenger vehicles, two-wheelers and commercial vehicles all reporting double-digit volume growth during the quarter, companies should post strong revenue gains. Operating leverage and a richer product mix are likely to support margins.
Banks, in aggregate, are expected to report subdued top-line and earnings growth in the March quarter. Private sector lenders should outperform their public sector peers on revenue. Many state-owned banks have been tilting towards secured, lower-yield loans, which have weighed on margins.
Repo rate cuts and higher wholesale deposit costs have added to the pressure, although some relief may have come from the repricing of term deposits. With demand holding up—especially in rural markets–, on the back of GST cuts, manufacturers of consumer staples are estimated to post good revenue growth.
Some companies indicate double-digit sales growth
Some companies have indicated double-digit sales growth. With some help from low-cost raw material inventories, operating margins are poised to expand. Retailers too appear to have done well, again, with price-cuts from lower GST rates, helping demand. However, quick service restaurants do not appear to have fared too well during the quarter.
For IT services firms, Q4FY26 performance is likely to be modest overall, though several companies could still deliver double-digit earnings growth aided by currency tailwinds. The weaker rupee may have boosted operating margins by 40–320 basis points. Guidance, however, could remain cautious amid geopolitical uncertainty and potential revenue deflation from GenAI-led efficiencies.
Metals companies are expected to report a healthy quarter, supported by firm prices across ferrous and non-ferrous segments. Domestic producers raised prices for products such as hot-rolled coils, aided by the extension of safeguard duties. Strong volumes and pricing should support revenues and margins, although higher coal costs may partly offset gains.
Cement demand is estimated to have grown by 6–7% in the March quarter, with prices up 1–1.5% year-on-year. Combined with improved operating leverage, this is likely to have lifted operating profit per tonne by about ₹150 compared with the December quarter. However, rising pet coke and imported coal prices, along with higher packaging costs, could weigh on margins in the June quarter.
With a few exceptions among top drugmakers, pharma companies are expected to deliver another steady quarter, aided by currency gains. US pricing has remained stable, while domestic demand continues to be robust. Healthcare services providers should also report stable numbers, although profitability may be impacted for players that have expanded capacity with new beds.
Among capital market intermediaries, firms exposed to trading volatility — such as brokers and stock exchanges — are likely to fare better than those dependent on market levels, including asset management companies, registrars and transfer agents, and wealth managers. AMC profitability, in particular, may come under pressure due to mark-to-market losses, even as inflows remain stable.