India Inc’s revenue growth may have picked up in Q3FY26: Brokerages | Markets News – Business Standard

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Earnings likely grew at slowest pace in 6 quarters

The combined net profits of 44 Nifty 50 companies whose estimates are available are expected to grow to around ₹1.99 trillion in Q3FY26 from ₹1.89 trillion in Q3FY25 and against ₹2 trillion in Q2FY26. | Illustration: Ajaya Mohanty

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India Inc is expected to show a slowdown in earnings growth in October-December (Q3FY26), according to brokerages, though they have estimated acceleration in revenue growth during the quarter.

According to estimates of various brokerages, the combined net profits of the Nifty 50 companies are expected to grow 5.2 per cent year-on-year (Y-o-Y), slowing from 7.2 per cent in Q3FY25 and 6.6 per cent in Q2FY26.

At this rate, the companies’ growth in combined net profits in Q3FY26 is likely to be the lowest in the last six quarters (see adjoining chart).

The combined net profits of 44 Nifty 50 companies whose estimates are available are expected to grow to around ₹1.99 trillion in Q3FY26 from ₹1.89 trillion in Q3FY25 and against ₹2 trillion in Q2FY26.

The index companies missing in brokerage estimates include Adani Enterprises, Grasim Industries, Tata Motors Passenger Vehicles, HDFC Life Insurance, SBI Life Insurance, and Jio Financial Services.

The earnings slowdown is likely to be led by InterGlobe Aviation (IndiGo), Bharti Airtel, and Shriram Finance.

At the other end of the spectrum, Tata Steel, HDFC Bank, Reliance Industries, Maruti Suzuki, and Mahindra & Mahindra are expected to be the biggest contributor to earnings growth. These five together are expected to account for around 73 per cent of incremental growth in net profit on a Y-o-Y basis in Q3FY26.

In the expected uptick in revenue growth, the biggest contribution is from Reliance Industries, food-delivery aggregator Eternal (Zomato), and Larsen & Toubro, and automobile makers such as Maruti Suzuki, Mahindra & Mahindra.

In contrast, Coal India, Oil and Natural Gas Corporation (ONGC), and Dr Reddy’s Laboratories are expected to report a Y-o-Y decline in revenue, dragging down overall revenue growth.

Firms in information technology and fast-moving capital goods such as Tata Consultancy Services, Infosys, Wipro, Hindustan Unilever, ITC, and Asian Paints are, however, likely to once again struggle with low single-digit growth in revenue and earnings in Q3FY26.

The combined net sales (net interest income in the case of lenders) in Q3FY26 are expected to grow 11.3 per cent Y-o-Y, up from 6.9 per cent in Q3FY25 and 9.2 per cent in Q2FY26.

Revenue growth in the third quarter is likely to be the fastest in the last 12 quarters.

The combined net sales of 44 index companies in the sample (as referred to above) are likely to grow to ₹13.42 trillion in Q3FY26 from ₹12.06 trillion in Q3FY25, and against ₹14.18 trillion in Q2FY26.

The combined net profits of index companies excluding banks, finance services and insurance (BFSI) are expected to grow 5.1 per cent Y-o-Y in Q3FY26, down from 5.6 per cent in Q3FY25 and 10.4 per cent growth in Q2FY26.

Similarly, the combined net profits of index companies excluding the ones in BFSI, ONGC, and Reliance Industries are expected to grow 5.7 per cent in Q3FY26, down from 8.3 per cent in Q3FY25 and 11.1 per cent in Q2FY26.

The combined net sales of index companies excluding the BFSI category are expected to grow 11.5 per cent Y-o-Y in Q3FY26, up from 6.8 per cent in Q3FY25 and 9.5 per cent in Q2FY26.

The combined net sales of index companies are likely to grow 13.1 per cent Y-o-Y in Q3FY26, up from 8.5 per cent in Q3FY25 and 11.6 per cent in Q2FY26.

“The overall earnings growth in Q3FY26 is expected to be strong and will be anchored by Oil & Gas, NBFC-Lending, Automobiles, Metals, Telecom, Technology Real Estate, Capital Goods and Cement. These sectors are anticipated to contribute 77 per cent of the incremental Y-o-Y accretion in earnings in Q3FY26,” wrote analysts at Motilal Oswal Financial Services in their earnings preview for the quarter.

Analysts at Kotak Institutional Equity in their earnings preview wrote: “We expect Q3FY26 net income of the KIE universe to increase 8.8 per cent Y-o-Y, led by (1) capital goods (strong overseas execution for L&T), (2) construction materials (higher volumes Y-o-Y, on account of ramp-up of acquired capacities for ACEM and UTCEM, partly offset by lower profitability), (3) metals & mining (strong quarter for base metal players due to higher commodity prices in 3QFY26) and (4) oil, gas & consumable fuels (strong refining and marketing margins of OMCs) sectors.”