Nifty profit growth at 10-quarter high, led by RIL, 4 others; MOFSL shares top stock ideas

Nifty companies posted 18 per cent year-on-year (YoY) profit after tax (PAT) growth in the June quarter, marking a 10-quarter high and coming in ahead of MOFSL's estimate of 10 per cent. The strong performance was led by ONGC Ltd, Hindalco Industries Ltd, Reliance Industries Ltd, JSW Steel Ltd and Bharti Airtel Ltd, with these five companies contributing 60 per cent to the incremental accretion in earnings, the domestic brokerage said.

MOFSL described the Q1 earnings season as "a picture-perfect quarter of broad-based performance with an earnings upgrade". It also named its top stock ideas across Nifty and non-Nifty names after raising its Nifty earnings per share estimates for FY27 and FY28.

According to MOFSL, InterGlobe Aviation Ltd, ITC Ltd, Dr Reddy's Labs Ltd, Tata Motors PV and Cipla were the companies that dragged Nifty earnings lower. The brokerage said Nifty EPS estimate for FY27 has been raised by 0.6 per cent to Rs 1,232, largely owing to Reliance Industries, Hindalco, ONGC, ICICI Bank Ltd and State Bank of India. The FY28E EPS estimate was also raised by 0.3 per cent to Rs 1,425 from Rs 1,422 due to upgrades in SBI, ICICI Bank, Hindalco, Bajaj Finserv and Bajaj Auto.

"The 1QFY27 corporate earnings season concluded on a strong note, demonstrating widespread outperformance across all key aggregates. The earnings growth and beat were led by Financials, Metals, Oil & Gas (ex-OMCs), and Automobiles as well as sectors such as Chemicals, Textiles, and Real Estate. OMCs expectedly dragged the overall aggregates," MOFSL said.

The brokerage said the beat-miss ratio for its coverage universe was favourable, with 48 per cent of companies exceeding its estimates, while 25 per cent reported a miss at the PAT level. "Within the large-cap universe, the ratio was even better, with 57 per cent of the companies exceeding our estimates. Among mid-caps and smallcaps, 39 per cent and 48 per cent of the coverage universe respectively beat our estimates," MOFSL said.

Top Nifty stock picks
Among Nifty stocks, MOFSL's top picks were Bharti Airtel, ICICI Bank, SBI, Titan Company, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, InterGlobe Aviation and Apollo Hospitals. Among non-Nifty stocks, it picked TVS Motor, BSE, GE Vernova T&D, HDFC AMC, Lenskart Solutions, Indian Hotels, Meesho, Dixon Tech, Coforge, Radico Khaitan, Delhivery, Kirloskar Oil Engines, RBL Bank, TBO Tek and Arvind. Overall, MOFSL said the June-quarter earnings season delivered broad-based outperformance, led by a handful of large contributors and supported by upgrades to forward earnings estimates.