Nifty earnings steady but uneven; metals, OMCs led gains, consumption lag despite GST cut
India’s Q2FY26 earnings season reflects a mixed but stabilizing trend across sectors, according to reports by Kotak Institutional Equities and JM Financial.
- Nov 5, 2025,
- Updated Nov 5, 2025 11:43 AM IST
India’s Q2FY26 earnings season reflects a mixed but stabilizing trend across sectors, according to reports by Kotak Institutional Equities and JM Financial. Both highlight subdued consumption demand, weak volume growth in staples, and GST-linked disruptions, while select discretionary segments and cyclicals like metals, mining, and OMCs drove earnings resilience.
Banks and IT services reported stable yet cautious performances, with modest margin stability and limited growth visibility. While Kotak noted mild upgrades to Nifty earnings on steady results from large caps such as HDFC Bank and Reliance, JM Financial observed widespread EPS cuts—over half of Nifty50 constituents saw downgrades—underscoring uneven earnings momentum and limited near-term catalysts.
The second quarter FY26 earnings season for the Nifty50 exhibited a mixed landscape, with subdued results for mass consumption items, a slight recovery in certain discretionary segments, modest IT services demand, and moderate loan growth from banks. Despite sectoral challenges, aggregate earnings came in ahead of initial estimates, largely due to robust performances from the metals and mining sector and oil marketing companies (OMCs).
Kotak Institutional Equities noted, "KIE universe earnings growth was better, as metals & mining and OMCs delivered strong growth, with adventitious gains and higher-than expected integrated margins of OMCs driving the beat, said Kotak Institutional Equities." This outperformance helped lift the aggregate earnings for the companies under their coverage, despite some significant misses elsewhere, notably in Coal India and Ultratech Cement, while Jindal Steel surpassed net profit expectations.
The Nifty50 Index, with 26 companies having reported so far, posted year-on-year revenue growth of 8.6%, EBITDA growth of 9.1%, and profit after tax growth of 3.1% for Q2FY26. JM Financial's analysis found that in the past 12 months to October 2025, the index delivered total returns of 6.3%, while consensus EPS projections for FY26E and FY27E have been trimmed by 8.5% and 7.5% respectively, indicating ongoing downward revisions in profit outlooks.
According to JM Financial, "Nifty50 up 6.3% YoY, while FY26E EPS cut by 8.5% over last 12 months: In the last 12 months from Oct’24 to Oct’25, the Nifty50 has delivered 6.3% returns, while FY26E and FY27E EPS have seen cuts of 8.5% and 7.5% respectively. In Oct’25, EPS estimates for FY26E and FY27E saw a MoM decrease of 0.2% and 0.3% respectively. These follow a 2.5% MoM decrease for FY26E and 2.6% MoM decrease for FY27E EPS in Sep’25, said JM Financial." This context underscores the cautious sentiment that pervades the market, despite index gains.
Sectoral divergences were marked, with JM Financial highlighting that 52% of Nifty50 companies saw EPS cuts in Oct’25, up from 36% in Sep’25. Among larger sectors, higher cuts were seen in Insurance (100%), Consumer (88%), Metals & Mining (75%), IT Services (60%), and Pharmaceuticals (60%). Meanwhile, 32% of Nifty50 companies saw upgrades, with Oil and Gas (100%) and NBFC (75%) leading the improvements.
Sector-specific performance was further clarified by JM Financial: sectors with over 1% MoM EPS cuts included Metals & Mining (2.8%), Insurance (2.0%), Cement (1.9%), Automobiles (1.7%), Pharmaceuticals (1.7%), Consumer (1.5%), and Infrastructure & Ports (1.1%). Upgrades were seen in IT Services (0.6%), NBFC (0.2%), and Oil & Gas (0.2%).
Kotak Institutional Equities reported that earnings upgrades were mild during the 2QFY26 season, with companies such as HDFC Bank, ICICI Bank, and Reliance Industries being notable beneficiaries. They stated, "Consensus estimates appear to be similarly placed over the past month, said Kotak Institutional Equities." This suggests that while there have been individual winners, the overall outlook for Nifty50 earnings growth remains largely stable in the near term.
In the consumer sector, both brokerages observed continued challenges. Kotak Institutional Equities pointed to GST-related de-stocking as dampening volumes in 2QFY26, a trend that hurt the performance of staple companies. Although some companies reported signs of recovering urban demand, GST-cut-induced sales did not significantly boost volumes for autos during the quarter.
Banks, according to both JM Financial and Kotak Institutional Equities, posted broadly stable results, with modest credit growth and net interest margins holding up slightly above expectations. Asset quality trends were stable to marginally improving, especially among large banks, and the sector showed early indications of stabilising unsecured loan portfolios.
IT services companies achieved some stabilisation in growth and margin performance during 2QFY26. However, as Kotak Institutional Equities highlighted, "However, IT services companies maintained a cautious outlook, given continued headwinds of (1) a challenging macro environment and (2) growing disruption risks, said Kotak Institutional Equities." This reflects the ongoing uncertainty in the sector due to international and technological factors.
India’s Q2FY26 earnings season reflects a mixed but stabilizing trend across sectors, according to reports by Kotak Institutional Equities and JM Financial. Both highlight subdued consumption demand, weak volume growth in staples, and GST-linked disruptions, while select discretionary segments and cyclicals like metals, mining, and OMCs drove earnings resilience.
Banks and IT services reported stable yet cautious performances, with modest margin stability and limited growth visibility. While Kotak noted mild upgrades to Nifty earnings on steady results from large caps such as HDFC Bank and Reliance, JM Financial observed widespread EPS cuts—over half of Nifty50 constituents saw downgrades—underscoring uneven earnings momentum and limited near-term catalysts.
The second quarter FY26 earnings season for the Nifty50 exhibited a mixed landscape, with subdued results for mass consumption items, a slight recovery in certain discretionary segments, modest IT services demand, and moderate loan growth from banks. Despite sectoral challenges, aggregate earnings came in ahead of initial estimates, largely due to robust performances from the metals and mining sector and oil marketing companies (OMCs).
Kotak Institutional Equities noted, "KIE universe earnings growth was better, as metals & mining and OMCs delivered strong growth, with adventitious gains and higher-than expected integrated margins of OMCs driving the beat, said Kotak Institutional Equities." This outperformance helped lift the aggregate earnings for the companies under their coverage, despite some significant misses elsewhere, notably in Coal India and Ultratech Cement, while Jindal Steel surpassed net profit expectations.
The Nifty50 Index, with 26 companies having reported so far, posted year-on-year revenue growth of 8.6%, EBITDA growth of 9.1%, and profit after tax growth of 3.1% for Q2FY26. JM Financial's analysis found that in the past 12 months to October 2025, the index delivered total returns of 6.3%, while consensus EPS projections for FY26E and FY27E have been trimmed by 8.5% and 7.5% respectively, indicating ongoing downward revisions in profit outlooks.
According to JM Financial, "Nifty50 up 6.3% YoY, while FY26E EPS cut by 8.5% over last 12 months: In the last 12 months from Oct’24 to Oct’25, the Nifty50 has delivered 6.3% returns, while FY26E and FY27E EPS have seen cuts of 8.5% and 7.5% respectively. In Oct’25, EPS estimates for FY26E and FY27E saw a MoM decrease of 0.2% and 0.3% respectively. These follow a 2.5% MoM decrease for FY26E and 2.6% MoM decrease for FY27E EPS in Sep’25, said JM Financial." This context underscores the cautious sentiment that pervades the market, despite index gains.
Sectoral divergences were marked, with JM Financial highlighting that 52% of Nifty50 companies saw EPS cuts in Oct’25, up from 36% in Sep’25. Among larger sectors, higher cuts were seen in Insurance (100%), Consumer (88%), Metals & Mining (75%), IT Services (60%), and Pharmaceuticals (60%). Meanwhile, 32% of Nifty50 companies saw upgrades, with Oil and Gas (100%) and NBFC (75%) leading the improvements.
Sector-specific performance was further clarified by JM Financial: sectors with over 1% MoM EPS cuts included Metals & Mining (2.8%), Insurance (2.0%), Cement (1.9%), Automobiles (1.7%), Pharmaceuticals (1.7%), Consumer (1.5%), and Infrastructure & Ports (1.1%). Upgrades were seen in IT Services (0.6%), NBFC (0.2%), and Oil & Gas (0.2%).
Kotak Institutional Equities reported that earnings upgrades were mild during the 2QFY26 season, with companies such as HDFC Bank, ICICI Bank, and Reliance Industries being notable beneficiaries. They stated, "Consensus estimates appear to be similarly placed over the past month, said Kotak Institutional Equities." This suggests that while there have been individual winners, the overall outlook for Nifty50 earnings growth remains largely stable in the near term.
In the consumer sector, both brokerages observed continued challenges. Kotak Institutional Equities pointed to GST-related de-stocking as dampening volumes in 2QFY26, a trend that hurt the performance of staple companies. Although some companies reported signs of recovering urban demand, GST-cut-induced sales did not significantly boost volumes for autos during the quarter.
Banks, according to both JM Financial and Kotak Institutional Equities, posted broadly stable results, with modest credit growth and net interest margins holding up slightly above expectations. Asset quality trends were stable to marginally improving, especially among large banks, and the sector showed early indications of stabilising unsecured loan portfolios.
IT services companies achieved some stabilisation in growth and margin performance during 2QFY26. However, as Kotak Institutional Equities highlighted, "However, IT services companies maintained a cautious outlook, given continued headwinds of (1) a challenging macro environment and (2) growing disruption risks, said Kotak Institutional Equities." This reflects the ongoing uncertainty in the sector due to international and technological factors.