For the quarter ended June (1QFY26), mixture profit-after-tax cuts for Motilal Oswal’s protection universe stood at simply 2% for FY26 and 1% for FY27, in contrast with 6%, 3%, and 4% cuts in prior quarters.
Excluding banks and commodities, the downgrade was negligible at –0.2% for FY26, whereas FY27 noticed an upward revision of 0.4%. Mid-caps even posted upgrades of 4% and a pair of% for FY26 and FY27, respectively, although small caps continued to bear steep 8% cuts.
“Already, FY26 PAT/EPS estimates for our universe/Nifty have been minimize by ~13%/~16% since 1QFY25, implying {that a} materials a part of the downward revision is behind,” the brokerage stated.
Coverage assist in focus
Motilal Oswal attributed optimism to a supportive coverage backdrop. The RBI has lowered the repo price by 100 foundation factors to five.5% and is about to scale back the money reserve ratio to three% in phases. “Policymakers in a ‘whatever-it-takes’ mode” have additionally pushed liquidity into surplus, minimize GST charges, and lowered private earnings taxes to raise disposable incomes.
“GST2.0 has potential to kickstart a consumption cycle and certain be an earnings kicker for India Inc,” the report famous, including that decrease costs may spur demand and margin enlargement by way of working leverage
Sector divergence persists
The easing development has been uneven. Cars, insurance coverage, capital items, cement, and shopper staples noticed stabilization, whereas know-how, PSU banks, metals, and retail continued to report sharper cuts.Personal banks additionally confronted strain on FY26 estimates, although Motilal Oswal expects credit score development to revive within the second half.
Outlook and dangers
For FY26, the brokerage initiatives revenue development of 13% for its universe and 10% for the Nifty, with FY25–27 CAGR anticipated at 15% and 13% respectively.
It warned, nevertheless, that “key dangers are a lower-than-expected profit of presidency actions on mixture demand or any additional high-impact geopolitical threat occasion.”
Prime inventory picks embody Bharti Airtel, ICICI Financial institution, L&T, M&M, Solar Pharma, Ultratech, Titan, Tech Mahindra, BEL, TVS Motors, and Indian Lodges on the large-cap aspect, and Dixon, SRF, Suzlon, Coforge, Web page Industries, and Radico Khaitan amongst mid-caps.
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