IndusInd Bank, Eternal, Infosys: 70% Nifty firms see cuts in EPS estimates in April

A total of 35 Nifty constituents saw downward revisions in FY26 earnings per share (EPS) estimates in April. Eternal (erstwhile Zomato), which reported a 78 per cent plunge in Q4 net profit, saw the highest EPS cut in the Nifty pack. IndusInd Bank, which declared accounting discrepancies to the tune of Rs 1,960 crore, has seen the second highest EPS cut. IT firms Infosys Ltd and Tata Consultancy Services Ltd and auto major Maruti Suzuki India Ltd also saw 4-5 per cent EPS cuts.  

In the last 12 months, Nifty delivered a 7.7 per cent return. But EPS estimates for FY25 and FY26 during the same period were reduced by 5.1 per cent and 6.8 per cent, respectively.

"Muted analyst expectations for Nifty 4QFY25 PAT going into result season might have led to the FY25 EPS increase. However, the EPS downgrade cycle continues given FY26E/27E cuts are sharper than that in February and March. Further, the number of Nifty companies which saw an EPS cut also increased from 44 per cent in March to 70 per cent in April, with IT services, Consumer, Banks and Automobiles being key contributors," JM Financial said in anote. 

The largest EPS upgrades were seen in Kotak Mahindra Bank Ltd, SBI Life, Jio Financial Services, Reliance Industries Ltd, and ICICI Bank Ltd.

Among downgrades, four out of six bank companies in the Nifty pack, all five IT and 8 Nifty consumer companies saw downgrades. Four out of six Nifty auto constituents also saw downgrades. 

"In April, 12 Nifty50 companies (24 per cent) saw an upgrade in FY26E EPS estimates. This included: (1) Automobiles: 2 out of 6 companies in the Nifty50 (33 per cent), (2) Banks: 2 out of 6 companies in the Nifty50 (33 per cent), (3) NBFCs: 2 out of 4 companies in the Nifty50 (50 per cent), and (4) Pharmaceuticals: 2 out of 4 companies in the Nifty50 (50 per cent)," JM said.

Data till Monday showed 27 Nifty companies together reported 9.11 per cent year-on-year (YoY) rise in net sales at Rs 10,20,173 crore in Q4 compared with Rs 9,34,972 crore in the same quarter last year. Profit for these 27 companies grew 6.59 per cent to Rs 1,50,082.68 crore from Rs 1,40,810 crore YoY. 

"The March quarter corporate earnings has been in line so far, with heavyweights driving the aggregate," MOFSL said.  Among 24 of these Nifty results that MOFSL tracked, profit for the pack was up 7 per cent YoY against an estimate of 5 per cent YoY, led by ICICI Bank, HDFC Bank, Adani Ports, Wipro, Infosys, Bajaj Finance, and Reliance Industries.

MOFSL said the market has rebounded smartly over the last two months, entirely erasing its year-to-date decline. 

"The Nifty is currently trading 2.9 per cent higher in CY25YTD. With the current rally, Nifty trades at 21x FY26E earnings, near its LPA of 20.6 times. While near-term challenges such as global macros, trade wars, and a weak 4QFY25 will keep the market volatile and jittery, we believe that the medium- to long-term growth narrative for India remains intact," MOFSL said.