Nifty EPS Growth Set to Hit 10% in FY26, Motilal Oswal Projects
Motilal Oswal forecasts the Nifty 50 companies’ earnings per share (EPS) to rise by approximately 10% in FY26, a solid upgrade from the mere 1% growth in FY25. The brokerage stated, “EPS growth for Nifty50 is projected to rise to ~10% in FY26 … aided by a likely improvement in the macro environment owing to the stimulative fiscal and monetary measures.” Analysts say 1QFY26 earnings largely met expectations, driven by improving India macro conditions and policy support. Markets rallied since April lows, despite a relatively weak July. With valuations trading near long-period averages and stronger earnings prospects, especially in large-caps, investors expect markets to register gains going forward.
Macroeconomic Tailwinds Fuel Nifty EPS Outlook
Analysts attribute the projected 10% EPS growth to stimulative fiscal and monetary measures expected to boost domestic demand and corporate profitability. Motilal Oswal expects improved earnings delivery backed by macro stability and favorable base effects from a weak FY25. The market has already rebounded sharply since April 2025, while July remained soft. But valuations seem reasonable, with Nifty trading at 22.1 times FY26E earnings, close to its long-period average of 20.7 times. The brokerage raised mid-cap allocation to 22% from 16%, while keeping large caps at 70%, betting on improved earnings momentum.
Sector Preferences And Portfolio Shift
Motilal Oswal stays overweight on BFSI, Consumer Discretionary, Industrials, Healthcare, and Telecom, and underweight on Oil & Gas, Cement, Real Estate, and Metals. Within 1Q, private banks posted mixed earnings, PSBs lagged, and NBFCs delivered subdued growth due to seasonal softness and macro headwinds. Staples volumes improved on rural recovery, even amid weak urban demand. IT sector benefitted little—constant currency revenue rose only 0.8% QoQ, weighed by weak global macro and cautious client behaviour. Brokerage expects margin improvements and better macro tailwinds to deliver stronger full‑year EPS growth.
(With Inputs From ANI)
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