RIL, ICICI Bank among 7 cos contributing 100% of Nifty's incremental Q1 earnings

The June quarter earnings season has largely matched Street expectations, with Nifty earnings estimates for FY26 trimmed by 2 per cent. Data showed that earnings of the 38 Nifty companies that have reported so far rose 7.5 per cent YoY, beating the estimated 5.7 per cent growth, led by Reliance Industries, HDFC Bank, ICICI Bank, JSW Steel, Bajaj Finance, Larsen & Toubro, and Mahindra & Mahindra.

These seven companies contributed 100 per cent to the incremental YoY accretion in earning, MOFSL said in a note. Conversely, Coal India, IndusInd Bank, HCL Technologies, Kotak Mahindra Bank, Axis Bank, and Eternal dragged Nifty earnings lower. 

The brokerage believes June quarter earnings have broadly been in line, with the intensity of earnings cuts moderating against previous quarters, even as the trend of a higher number of downgrades has continued into the quarter. 

"EPS growth for Nifty-50 is expected to rise to 10 per cent in FY26 (against a sluggish 1 per cent in FY25)—aided by a likely improvement in the macro environment owing to stimulative fiscal and monetary measures. Markets have staged an impressive recovery from the April’25 lows. Although Jul’25 was somewhat weak, we believe better earnings prospects and reasonable valuations (barring small-cap) should help the market eke out gains," MOFSL said.

Overall, Tata Consumer saw 9.7 per cent earnings upgrade for FY26. It was followed by Eicher Motors (3.8 per cent), IndusInd Bank (2.6 per cent), Wipro (2 per cent), ICICI Bank (1.9 per cent) and Maruti Suzuki India (1.1 per cent). Eternal saw 35.4 per cent earnings downgrades. Axis Bank, Power Grid, Sun Pharma andNestle India witnessed 3.9-8.7 per cent earnings downgrades.

Kotak Institutional Equities said Q1FY26 earnings season showed continued weakness in consumption, muted IT services demand and weak loan growth for banks. Aggregate earnings were broadly in line with its estimates and consensus estimates. However, a muted outlook across sectors resulted in further cuts in KIE/consensus earnings estimates, it said.

Kotak said the FY2026E and FY27 EPS of Nifty-50 index has seen further cuts over the past one month, reflecting the weakening growth outlook, with FY26 Nifty-50 seeing 2 per cent EPS cut in the past one month. 

"As such, we currently expect 10 per cent/17 per cent growth in net profits of the Nifty-50 Index in FY2026E/27E. We note that quality of earnings of the Nifty-50 Index for FY2026 remains poor, with construction materials and metals & mining companies in aggregate contributing 32% and 25% of the incremental net profits of the Nifty-50 Index and KIE universe in FY2026. We note a similar trend in consensus earnings estimates for the Nifty-50 Index companies," it said.

HDFC Bank, ICICI Bank, JSW Steel, M&M, L&T, Tata Steel, NTPC, Bharat Electronics, Cipla, and Eicher Motors exceeded our profit estimates. Conversely, Reliance Industries, Sun Pharma, Power Grid, Nestle, Eternal, Kotak Mahindra Bank, and HCL Technologies missed our profit estimates for 1QFY26, MOFSL said.