Mumbai, Nov 26 (LatestNewsX) — India looks set to begin a long‑anticipated earnings‑upgrade phase, thanks to firms holding their own, robust holiday‑season buying, timely policy tweaks, and a fairly improving macro backdrop, a new report highlighted on Wednesday.
After a string of five tightening revisions, Nifty earnings finally flipped and are up by 0.7 %, 0.9 % and 1.3 % for FY26, FY27 and FY28 respectively.
“This marks a significant shift in sentiment and establishes early but clear signals of a broad‑based revival in corporate profitability,” reads the PL Capital analysis.
The index has ticked 4 % over the last quarter, breaking out of a lengthy consolidation phase.
The report attributes this rebound to better‑than‑expected Q2 FY26 corporate results, hopes that tariff talks with the U.S. will move forward, and a visible lift in domestic spending during the ongoing festivals and wedding season.
The GST rationalisation rolled out in September 2025, lowering effective retail prices across many consumer categories, has also helped march spending in both urban and rural areas.
Using a 15‑year average P/E of 19.2x and a projected September 2027 EPS of 1,515, the team projected a 12‑month Nifty target of 29,094, a bullish case of 30,548 and a bearish scenario of 26,184.
Their model portfolio stays overweight in banks, healthcare, consumer goods, automobiles and defence, while keeping IT services, commodities and oil & gas on the lighter side.
Quarterly earnings across the covered firms remained solid: sales rose 8.1 %, EBITDA climbed 16.3 % and PAT jumped 16.4 %.
“Importantly, EBITDA and PAT surpassed estimates by 5 % and 7.1 % respectively, leading to the first upgrades in NIFTY EPS since August 2024,” the report added.
Hitting the headlines were strong performances from hospitals, capital goods, cement, EMS, ports, NBFCs and telecom.
Commodity‑related players, especially cement, metals and energy, reported profit surges between 33 % and 58 %.
While government spending has been a key engine of growth over the past four years—tripling since the pandemic—there are warnings that FY26’s second half could see a modest slowdown.
Capital outlays in H1FY26 already account for 52 % of the annual plan, versus 41 % the year before.
Yet, the blend of GST cuts, increased fertilizer subsidies and limited direct tax receipts may restrict the government’s capacity to far exceed its current capex ceiling.
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