Picture perfect quarter? Nifty profit growth hits a 10-quarter high, but 5 stocks do the heavy lifting

Profit at Nifty50 companies climbed 18% from a year earlier in Q1 of FY27, the fastest growth in 10 quarters and well above Motilal Oswal Financial Services’ estimate of 10%. Yet five companies—ONGC, Hindalco Industries, Reliance Industries, JSW Steel and Bharti Airtel—accounted for 60% of the incremental earnings.

Motilal Oswal described the quarter as a “picture-perfect” period of broad-based performance, with 19 sectors exceeding its expectations. The brokerage’s coverage universe, excluding oil-marketing companies, recorded sales, Ebitda and profit growth of 18%, 15% and 22%, respectively. Its estimates had called for growth of 15%, 10% and 15%.

But while earnings surprises were widespread, the actual profit expansion remained clustered. The five biggest sector contributors generated 73% of the incremental profit in Motilal Oswal’s universe during the quarter.


Oil and gas companies excluding OMCs contributed Rs 16,900 crore to the year-on-year profit increase, followed by metals at Rs 15,700 crore. Non-bank lenders added Rs 8,000 crore, private sector banks Rs 7,300 crore and state-run banks Rs 3,900 crore.

Metals produced one of the sharpest turnarounds. The sector moved from being among the bottom 10 profit contributors a year earlier to the second largest contributor in the June quarter. Hindalco’s profit increased 118%, while JSW Steel posted growth of 96%. Vedanta’s profit surged 152%.

Nifty’s earnings strength was similarly concentrated. Beyond the five leading contributors, InterGlobe Aviation, ITC, Dr. Reddy’s Laboratories, Tata Motors’ passenger vehicle business and Cipla weighed on profit growth.

The divergence becomes more evident in earnings revisions. Despite the Nifty’s 18% profit growth and sizable beat against expectations, Motilal Oswal raised its fiscal 2027 Nifty earnings-per-share estimate by just 0.6% to Rs 1,232. Its FY28 estimate was increased by 0.3% to Rs 1,425 from Rs 1,422.

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Reliance, Hindalco, ONGC, ICICI Bank and State Bank of India drove the FY27 upgrade. Hindalco received the biggest revision among Nifty companies, with its estimate raised 21.9%. Tata Motors’ passenger vehicle business was upgraded 12.3%, SBI Life Insurance 9.5%, ONGC 7.8% and Reliance 7.4%.

At the other end, InterGlobe Aviation’s estimate was cut 32.8%, the steepest reduction in the index. Dr. Reddy’s was lowered 19%, Tata Steel 13.4% and Wipro 11.8%.

The broader market-cap data presented a stronger growth profile. Excluding OMCs, profit at large-cap companies in Motilal Oswal’s universe rose 21%, compared with its 14% estimate. Mid-cap profit increased 23% against an expected 17%, reaching an 11-quarter high.

Small caps recorded the fastest growth, with profit surging 31% versus an estimate of 22%. That performance, however, was supported by a favourable comparison with the year-earlier quarter, when profit had increased just 1%. Financial and oil and gas companies were the principal drivers of the small-cap improvement.

The quality of the earnings beat also varied across market-cap segments. About 57% of large-cap companies exceeded Motilal Oswal’s profit estimates, compared with 39% of mid caps and 48% of small caps. Across the entire coverage universe, 48% beat estimates while 25% missed them.

Oil marketing companies were the biggest drag on the overall results. The group reported a combined loss of Rs 18,100 crore, compared with a profit of Rs 16,200 crore a year earlier, as elevated crude oil prices hurt performance. InterGlobe Aviation also swung to a loss of Rs 380 crore from a profit of Rs 2,160 crore.

The earnings season nevertheless produced more upgrades than cuts. Motilal Oswal raised FY27 estimates by more than 3% for 130 companies and lowered them by a similar magnitude for 89, resulting in an upgrade-to-downgrade ratio of 1.5 times, the strongest in 22 quarters.

The brokerage increased its FY27 profit estimate for the overall coverage universe by 2%. Large-cap estimates rose 2.5% and small-cap projections increased 1.1%, while the mid-cap forecast was virtually unchanged, declining 0.1%.

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