HDFC Bank, RIL, TCS, JSW Steel, Infosys: Top 5 Nifty Q2 earnings contributors

HDFC Bank, Dr Reddy’s Laboratories, Bharat Electronics Ltd, Shriram Finance Ltd, and Tata Consultancy Services Ltd (TCS) delivered better-than-expected profit performance in the September quarter, according to Motilal Oswal Financial Services (MOFSL). These five Nifty constituents together accounted for 122 per cent of the incremental YoY earnings accretion for the companies that have reported so far.

In contrast, Axis Bank, HDFC Life Insurance, SBI Life Insurance, Coal India, Reliance Industries Ltd (RIL), Tech Mahindra, and Eternal underperformed MOFSL’s profit expectations for Q2FY26.

Overall, 27 Nifty companies have declared results to date, posting a 5 per cent YoY earnings growth versus estimates of 6 per cent YoY. Seven companies missed profit estimates, five recorded a beat, and fifteen reported in-line results.

As far as FY26 earnings revisions go, the top upgrades include HDFC Bank (up 4.2 per cent), Shriram Finance (up 4.5 per cent), UltraTech Cement (up 3.2 per cent), and Dr Reddy’s Laboratories (up 2.9 per cent). Conversely, the key downgrades comprise Eternal (down 37.9 per cent), HDFC Life Insurance (down 10.7 per cent), NTPC (down 9.2 per cent), Coal India (down 6.3 per cent), Reliance Industries (down 3.5 per cent), and SBI Life Insurance (down 3 per cent).

MOFSL said the Q2FY26 earnings have generally been in line, with the intensity of earnings cuts moderating.

"Although Indian equities have registered a lackluster performance over the past one year, we continue to highlight that the Indian markets now appear to be in a healthy state vs. last year. The earnings cycle is bottoming out, with growth expected to accelerate into double digits. Valuations are reasonable, with the Nifty trading at 21.4x, near its LPA of 20.8x. Any signs of earnings growth acceleration should support valuation expansion. We believe that the cavalry of measures by the government will help reset the trajectory of corporate earnings as domestic reforms are expected to continue," MOFSL said.

 

Additionally, any resolution of the tariff stalemate will be a key external catalyst, it said.

 

"Our model portfolio is more aligned towards domestic names, driven by expectations of a domestic economic rebound. While SMIDs trade at expensive valuations, we continue to focus on this segment, selectively picking high-conviction SMID names in our portfolio," MOFSL said.