Dalal Street is wrapping up the Q4 FY26 earnings season on a strong note, but the positive sentiment may not spill over to the next financial year. JM Financial warned that FY27 earnings downgrades warrants caution as it believes the expectations are likely to remain skewed on the downside against the backdrop of elevated crude oil prices, potential inflationary pressures and rising external uncertainties.

In its latest ‘Strategy’ note, JM Financial highlighted that at the beginning of FY25, the consensus expectation for Nifty 50 EPS growth stood at 15%. However, the actual growth came in at only 3.4%. Similarly, at the beginning of FY26, FY26, earnings were expected to grow 12–15%, whereas actual growth was only 4.5%.

“While Q4 FY26 results have led to an upward revision in our FY27E Nifty 50 EPS growth forecast to 17.1%, the recent track record of earnings downgrades warrants caution,” it said. The domestic brokerage listed out sectors which it expects to do the “heavy lifting” in earnings. These include automobiles (55% YoY growth, 7% weight in Nifty 50 PAT), metals and mining (36% YoY growth, 6% weight in Nifty 50 PAT), NBFC (32% YoY growth, 4.3% weight in Nifty 50 PAT), telecom (44% YoY growth, 3.3% weight in Nifty 50 PAT), and infrastructure (19% YoY growth, 3.2% weight in Nifty 50 PAT). “Private banks with a 31.2% weight in the Nifty 50 and expectations of 13% growth in FY27E form the backbone of this expectation,” it added.

Q4 earnings review

JM Financial highlighted that Nifty 50 EPS growth of 4.4% YoY in Q4 FY26 stood broadly in line with expectations. Excluding financials, earnings growth stood at 1.4% YoY. It highlighted that aviation was the worst performer, with EPS falling nearly 175% YoY. The sectors that instead notched up the highest EPS growth included internet (346%), telecom (38%), cement (32%), consumer retail (28%), utilities (26%), and automobiles (26%).

“Out of the 50 companies in the Nifty50, 32% missed estimates in Q4, whereas 40% beat estimates. Furthermore, if we split the Q4FY26 performance by market cap, we see that the proportion of misses was the largest in small-caps, followed by large-caps and then mid-caps; 33% of small-cap companies missed expectations while the misses were fewer in mid-caps and large-caps at 18% and 29%, respectively,” it added.

For the entire financial year which ended on March 31, 2026, JM Financial said that is had estimated FY26 EPS would grow 12% YoY, but actual growth came in at 4.5% YoY as earnings expectations steadily weakened through the year. “While part of this divergence reflects the impact of Nifty 50 reconstitution during FY26, earnings underperformance across sectors relative to their initial expectations was also a noteworthy factor,” it added.

Which sectors underperformed in FY26?

Key sectors that underperformed in FY26 when compared to their initial PAT growth expectations, according to the domestic brokerage, are banks (3.6% YoY growth vs expectation of 7.1% growth), automobiles (17.5% YoY fall vs expectation of 4.9% growth), pharmaceuticals (9.7% YoY fall vs expectation of 18.8% growth), and consumer (10.4% YoY growth vs expectation of 13.8%).

While automobiles, metals, NBFC, telecom and infrastructure are expected to lift up FY27 earnings, JM Financial estimates SOE banks, utilities and consumer to drag FY27 Nifty 50 EPS.

Also Read | Motilal Oswal highlights broad-based beat on Q4 estimates, lists 6 sectors that exceeded expectations

Hello and welcome to ET Market Watch. I’m Neha Vashishth, bringing you the latest from Dalal Street and beyond.

Indian markets closed the week on a strong note today. The BSE Sensex jumped 484 points, while the Nifty crossed the 25,700 mark, extending the week’s momentum.

The Bank Nifty hit a fresh high, closing nearly 1% up, reflecting optimism in the financial sector.

Among the top gainers were Whirlpool India, Asian Paints, M&M, Adani Power, and SBFC Finance, rising between 4% and 11%. On the other hand, Credit Access, Sterling Wilson, Wipro, and Jindal Saw were the laggards.

Sector-wise, banks, telecom, and auto led the rally, while IT and NBFCs faced pressure.

On the macro side, the Indian Rupee weakened by 7 paise, closing at 88.03 against the US dollar, weighed down by trade tensions and global uncertainties. However, foreign fund inflows and lower crude oil prices offered some support.

So, what drove today’s turnaround? FIIs returning, easing US bond yields, and optimism over India-US trade talks pushed equities higher.

That’s all from Dalal Street for today. I’m Neha Vashishth, signing off. Stay tuned for more market updates.

Reliance has reported a strong fourth quarter beat in profitability as the bottom line rose 2% year-on-year (YoY) to Rs 19,407 crore. The Street was expecting the profit to be around Rs 18,471 crore. Revenue from operations too surged 10% YoY to Rs 2.64 lakh crore.

The growth was driven by telecom and retail businesses, which helped offset the impact of a weaker oil-to-chemicals cycle and softer gas realizations. This was the trend even in the previous quarter, where retail and Jio have powered the company’s earnings over the past.

The Jamnagar complex, which houses two refineries with a combined capacity of about 1.4 million barrels per day, has historically been the powerhouse of Reliance’s O2C operations and a key profit driver.

Along with the results, the company also announced a Rs 5.5 dividend and a major fundraising plan, indicating continued expansion plans. Despite a challenging global economic environment, Reliance said it maintained operational discipline and continued investing in growth initiatives, with the management striking an optimistic tone on the outlook.

How to trade RIL on Monday?

Ahead of the results on Friday, RIL shares closed marginally down at Rs 1,301. However, the stock has performed reasonably well this year, rising nearly 7%.

Analysts are in consensus that the stock is moving sideways within a narrow range and isn’t showing strong movement in either direction. “On the daily chart, we are observing a sideways movement which gives no clear direction of trend,” said Mileen Vasudeo, Sr Technical Analyst, Arihant Capital Markets.

At present, RIL has immediate resistance at 1,341 level. Any close above 1,341 would propel the upside momentum and in such a scenario, it is likely to test 1,410-1,460 levels.

“A move above Rs 1,320 could lead to a quick rise towards Rs 1,345–1,360, while falling below Rs 1,280 may drag it down to Rs 1,250. RSI is neutral, showing no strong trend. Until a clear move happens, traders can follow range-bound strategies,” said Riyank Arora, technical analyst at Mehta equities.

Meanwhile, Vasudeo advised investors to buy the stock at current market levels with a stop loss of Rs 1,250 for a target Rs 1,410 – 1,460 levels in a couple of weeks.

Along with the results, the company has also announced a dividend and a major fundraising plan, indicating continued expansion in its future sectors.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)

Business services provider Quess Corp on Wednesday reported Rs 5519 crore in revenues for the quarter ended December (Q3FY25), recording a 14% year-on-year (YoY) and 7% sequential growth.

The earnings before interest, taxes depreciation and amortisation (EBITDA) stood at Rs 197 crore, marking a 6% YoY and 1% sequential increase, while profit after tax (PAT) rose 34% YoY to Rs 85 crore and a 9% sequential drop. The board approved an interim dividend of Rs 4 per share.

Quess executive director and Group CEO Guruprasad Srinivasan, in a statement said, his company had reported a consistent double-digit revenue growth with a healthy earnings profile, along with gross debt reduction to Rs 224 crore.

The workforce management segment crossed 500,000 in headcount delivering robust revenue growth, driven by demand in retail and telecom, and strong hiring trends in GCCs, he said. “Global Technology Solutions continued its strong momentum, benefiting from increased contributions from international markets, while operating asset management saw solid topline growth, particularly in the telecom and industrial sectors. On the 3-way demerger, we are on track for and currently awaiting NCLT approval.”

The workforce management platform posted 18% YoY revenue growth, adding 124 new contracts with an annual contract value of Rs 150 crore plus, boosted by the festive season, Srinivasan said.

In global technology solutions, EXM (employee experience management) payroll processed 4.4 million payslips the past quarter, reflecting a 2% sequential increase, while Alldigi’s international business mix grew from 57% in the December quarter to 64%.Operating asset management posted a 15% YoY revenue growth, driven by 30% growth in industrial O&M and telecom. The Company, the CEO said, acquired Archer Integrated Services to strengthen its presence in the industrial F&B segment.Meanwhile, the product-led business faced a 28% sequential revenue decline, impacted by a weak hiring season and IT/ITeS sector headwinds. In response, the business is pivoting towards a strategic focus on job quality and organic job postings to drive sustainable growth, the company said.

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