Earnings growth for India Inc is in focus as the Q4 season gets underway. JM Financial Securities has laid out a sector-by-sector playbook along with a detailed stock list spanning large, mid and small caps. The brokerage expects the profit after tax for Nifty to grow 4.2% year on year in Q4FY26, with only a few sectors driving gains while several others dragged the index down.
The report builds its investment view from sector trends and then maps preferred stocks within each segment. Autos, telecom, information technology services and metals emerge as key contributors, while pharmaceuticals, consumer and utilities weigh on earnings. The brokerage has also identified stocks to avoid across market capitalisations.
Auto and auto ancillaries: Maruti Suzuki and Tenneco Clean Air among picks
JM Financial sees autos as one of the strongest sectors in the current quarter, backed by steady domestic demand and exports. The brokerage expects auto original equipment manufacturers to post around 22% year-on-year revenue growth, even as margin expansion remains limited due to commodity costs.
It notes that “auto OEMs have witnessed a structural shift post GST rationalization, with its positive impact continuing into Q4FY26,” pointing to sustained demand momentum across segments. At the same time, rising input costs linked to precious metals could weigh slightly on margins.
Within this space, Maruti Suzuki is identified as the top pick among large caps. The company’s scale, export presence and strong domestic positioning support its inclusion in the preferred list. It also features among the brokerage’s top large cap ideas for the quarter.
Among ancillary companies, Tenneco Clean Air India is highlighted as a preferred name. The brokerage expects auto ancillaries to grow around 15% year on year, supported by diversified product portfolios and steady domestic demand.
Information technology: Infosys and Mphasis feature in preferred list
Information technology services continue to deliver stable growth, even as global conditions remain uncertain. JM Financial expects the sector to post around 12% year-on-year earnings growth, making it one of the more reliable contributors to overall earnings.
The brokerage states that information technology services are “likely to increase 12% YoY,” reinforcing its role as a steady performer in a mixed earnings environment.
Infosys is included in the large cap preferred list, reflecting confidence in its execution and demand visibility. The company benefits from its scale and diversified client base, which helps maintain stability even during uncertain periods.
In the midcap segment, MphasiS is also named among preferred stocks. The brokerage’s inclusion of both large and midcap names suggests continued confidence in the broader information technology services segment.
At the same time, LTIMindtree is listed among stocks to avoid in the large cap category, indicating selective positioning within the sector rather than a blanket positive stance.
Telecom: Bharti Airtel stands out while Vodafone Idea among avoid list
Telecom is expected to deliver one of the strongest earnings performances in the March quarter. JM Financial estimates that the sector could see earnings growth of around 43% year on year, driven by operating leverage and improved profitability.
The report states that telecom is “likely to surge 43% YoY,” placing it among the fastest growing segments in the index.
Bharti Airtel is the brokerage’s top pick in this space and features prominently in its large cap list. The company’s scale, pricing power and improving margins support its inclusion among preferred ideas.
On the other hand, Vodafone Idea appears in the mid cap avoid list, reflecting concerns around its operating performance and financial position.
Metals and mining: Tata Steel and SAIL split across buy and avoid lists
Metals and mining are expected to contribute meaningfully to earnings growth, with JM Financial estimating around 12% year-on-year on year growth for the sector.
The brokerage notes that metals and mining are “likely to rise 12% YoY,” supported by favourable operating conditions.
Tata Steel is included among the preferred large cap names, reflecting its leverage to improving sector conditions and its scale advantages.
At the same time, SAIL appears in the mid cap avoid list, indicating that the brokerage is selective even within sectors that are otherwise showing growth.
Oil and gas: Oil India among mid cap ideas while Petronet LNG in avoid list
Oil and gas is expected to see modest earnings growth of about 3.8% year on year, according to the report.
The brokerage notes that the sector is “likely to rise 3.8% YoY,” reflecting stable but not strong performance.
Within this segment, Oil India is included among the preferred mid cap stocks. This suggests selective opportunities despite the overall moderate outlook.
However, Petronet LNG appears in the mid cap avoid list, indicating that the brokerage is cautious on certain business models within the sector.
Banking and financial: ICICI Bank and CIFC preferred while HDFC Bank and Bajaj Finance avoided
Banking and financial services remain a key part of the market due to their weight, though the report flags emerging risks. JM Financial expects the sector to grow about 5.6% year on year in the quarter.
The brokerage states that “operating environment for Indian banks has weakened amid rising geopolitical tensions,” pointing to risks from inflation and higher energy prices.
ICICI Bank is identified as the top pick among banks and is included in the large cap preferred list. The brokerage’s preference is tied to growth visibility and operating strength.
CIFC is highlighted among non-banking banking financial companies, reflecting confidence in diversified financials.
On the other side, HDFC Bank and Bajaj Finance are included in the large cap avoid list, indicating concerns around valuations and near-term term pressures.
Consumer and retail: Titan and Marico among picks while Dabur and Colgate avoided
Consumer remains one of the weaker sectors in the report, with JM Financial expecting only about 1.5% year on year earnings growth.
The brokerage notes that consumer is among the sectors that “would drag Nifty 4QFY26E PAT,” indicating subdued demand conditions.
Despite the weak sector outlook, Titan is included among the preferred large cap names, while Marico features in the mid cap list.
Metro Brands is also included among small -cap picks, showing selective opportunities in discretionary consumption.
Dabur and Colgate are listed among mid cap stocks to avoid, reflecting weaker demand trends in staples.
Industrials, cement and building materials: UltraTech Cement and Astral among preferred names
JM Financial also highlights opportunities in industrial and building material segments. UltraTech Cement appears in the large cap preferred list, reflecting its strong positioning in the cement sector.
Astral is included among mid cap picks, supported by strong demand in plastic piping and pricing trends.
The brokerage notes that plastic piping companies are expected to see robust performance, supported by higher prices and steady demand.
Prince Pipes, however, is included in the small cap avoid list, indicating divergence within the same segment.
Real estate, internet and niche sectors
Real estate emerges as a strong growth pocket, with JM Financial expecting meaningful earnings expansion.
Lodha is included among large cap picks, while Brigade features in the small cap list.
In the internet segment, Nykaa appears among mid cap ideas, reflecting confidence in select digital platforms, as per the firm.
Vishal Mega Mart and Lenskart are also part of the mid cap preferred list, indicating opportunities in organised retail and consumption. Ceigall India and WeWork feature among small -cap ideas, showing that the brokerage is identifying opportunities even in niche segments, the firm added.
Healthcare, insurance and financial services
Healthcare and insurance also feature in the stock list, though the sector outlook is mixed.
Dr Lal PathLabs is included among small -cap preferred names, reflecting steady demand in diagnostics. Niva Bupa appears in the small- cap list, supported by growth in health insurance, as per firm.
Nippon AMC is included among mid cap picks, while UTI AMC appears in the small cap avoid list.
The report notes that asset management companies could see varied performance, with some benefiting from market trends while others face pressure.
Conclusion
JM Financial’s report lays out a clear sector-driven driven approach to stock selection, with autos, telecom, information technology services and metals forming the core of its preferred basket. At the same time, it remains cautious on consumer, pharmaceuticals and utilities, where earnings growth is either weak or declining.
JM Financial believesbelives that earnings growth remains uneven, and stock selection needs to follow sector level trends closely.
Disclaimer: This report includes specific sector analysis, earnings projections, and a detailed list of over 40 stocks across large, mid, and small-cap categories, including explicit “preferred” and “avoid” lists. These insights are based on JM Financial Institutional Securities’ research and are intended for informational purposes only. Given the inclusion of small-cap and mid-cap stocks, which carry higher volatility and liquidity risks, and the presence of specific buy/avoid signals, readers are strongly advised not to treat this as formal investment advice. Before taking any action, you must conduct independent due diligence and consult a SEBI-registered financial advisor to ensure any investment aligns with your risk profile and financial goals.
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