Motilal Oswal has lifted its profit outlook for the fiscal year 2026, signaling better earnings for many Indian companies.
Earnings Forecast Upgrade
The brokerage increased its overall profit estimate for the companies it covers by 2% after the September‑quarter results. This is the first upgrade since the start of FY25 earnings season.
- Mid‑cap stocks got the biggest boost, with earnings expectations rising about 3.1%.
- Large‑cap stocks also saw a solid increase of roughly 2%.
- Small‑cap stocks lagged, with analysts still lowering expectations by about 5.5%.
Sector‑wise Winners and Losers
Key sectors that helped lift the outlook include oil & gas, telecom, public‑sector banks, insurance and non‑bank finance companies. The biggest drags remain utilities, followed by autos and healthcare.
Among large‑cap sectors, upgrades were fairly balanced, while small‑caps faced sharper cuts in private banks, insurance, retail and electronic manufacturing services.
Can Earnings Grow Faster Than GDP?
Motilal Oswal answered a common question: can corporate profits rise in the mid‑teens even if the economy’s nominal growth stays below 10%? Their study of the past 20 years shows that GDP growth explains only about 20% of profit growth for the Nifty 50. The rest comes from factors like leverage, pricing power, cost control and competition. So, earnings can keep improving even when GDP growth slows.
Outlook for 2026
The firm remains upbeat about the Indian market. It expects the Nifty 50 to grow earnings by 12% in FY26 and 15% in FY27. A smoother global environment, lower oil prices and a weaker dollar could attract more foreign money into Indian stocks.
Motilal Oswal is overweight (favors) sectors such as diversified financials, automobiles, capital goods, IT services and telecom, while being underweight on energy, metals, utilities and consumer staples.
Top Stock Picks
Large‑cap favorites:
- Bharti Airtel
- ICICI Bank
- SBI
- Infosys
- Larsen & Toubro (L&T)
- Mahindra & Mahindra
- Titan
- Eternal
- Bharat Electronics (BEL)
- IndiGo
- TVS Motor
- Tech Mahindra
- Indian Hotels
Mid‑cap favorites:
- Swiggy
- Dixon Technologies
- Suzlon Energy
- Jindal Stainless
- Coforge
- Kaynes Technology
- Radico Khaitan
- V‑Mart Retail
- VIP Industries
Remember, this is just one analyst’s view, not a prediction. Always do your own research or talk to a certified advisor before making investment decisions.