The Q2 outcomes of Indian corporates have broadly met expectations to this point, reinforcing market sentiment. The Indian inventory market posted robust positive aspects in October, with benchmark indices Sensex and Nifty 50 rising 4.6% and 4.5%, respectively, final month, supported by in-line earnings, easing FII promoting, and optimism round India–US commerce talks.
The Sensex and the Nifty 50 are inching nearer to their document excessive ranges of 85,978.25 and 26,277.35, respectively, which they scaled on September 27 final 12 months. On Monday, November 3, the Sensex rose over 100 factors, or 0.10%, to an intraday excessive of 84,052, whereas the Nifty 50 climbed by 0.20% to an intraday excessive of 25,773.
Q2 outcomes 2025: Largely in keeping with expectations
The July-September quarter earnings of India Inc. have been steady, with none main detrimental surprises. This appears to have supplied some consolation to the home market.
Based on brokerage agency Motilal Oswal Monetary Companies, as of October 31, 27 Nifty 50 firms have introduced their Q2FY26 outcomes.
“The Q2FY26 earnings have usually been in line, with the depth of earnings cuts moderating. Though Indian equities have registered a lacklustre efficiency over the previous 12 months, we proceed to focus on that the Indian markets now seem like in a wholesome state versus final 12 months,” stated Motilal Oswal.
The brokerage agency believes that the earnings cycle is bottoming out, and earnings development may speed up into double digits.
Motilal underscored that the earnings of those 27 Nifty firms have grown 5% year-on-year (YoY) versus the estimated +6% YoY, pushed by HDFC Financial institution, Reliance Industries, TCS, JSW Metal, and Infosys.
These 5 firms contributed 122% to the incremental YoY accretion in earnings. Seven firms throughout the Nifty reported lower-than-expected earnings, whereas 5 recorded a beat, and fifteen registered in-line outcomes, Motilal Oswal stated.
“The Nifty EPS (earnings per share) for FY26E was raised marginally to ₹1,101 from ₹1,096 resulting from upgrades in HDFC Financial institution, Tata Metal, Ultratech Cement, Dr Reddy’s Labs, and Shriram Finance. The FY27E EPS was raised by 0.3% to ₹1,278 from ₹1,274,” stated Motilal.
Can earnings alone drive the Indian inventory market to document highs?
The home market is at a crossroads. On one hand, a wholesome home macro backdrop means that equities may very well be poised for robust development. Alternatively, persistent considerations over US tariffs and international capital outflows are weighing on sentiment.
Specialists say the home market wants a confluence of constructive triggers to hit unprecedented ranges and maintain its positive aspects.
A beneficial India–US commerce deal may dispel the clouds of macroeconomic uncertainty and set off a contemporary wave of international capital inflows, probably leading to a pointy upside available in the market. Nevertheless, earnings stay an important driver, as they may present valuation consolation and assist the market maintain its positive aspects.
Specialists hope that the US-India deal may very well be introduced quickly, as there have been constructive indicators from each side within the latest previous.
Specialists say the US can’t politically afford to push India nearer to Russia and China, creating a robust alliance towards Western pursuits.
“On the commerce entrance, take a look at the sample. The US imposed aggressive tariffs on India earlier, however since then, there was no renewed aggression — regardless that the US has continued taking robust positions towards China. After India’s diplomatic engagements with Russia and China, it seems the US is cautious. This geopolitical logic provides me confidence that, though delayed, a commerce deal is probably going ultimately,” G Chokkalingam, the founder and the pinnacle of analysis at Equinomics Analysis Personal Restricted, identified.
On earnings, Chokkalingam believes Q3 will probably be an even bigger driver for markets than Q2.
“Q3 ought to replicate the total influence of the GST price cuts, robust monsoon, and improved water storage that enhances agricultural output. Moreover, the marriage season expenditure — estimated at round ₹6.5 trillion — and declining oil costs assist demand. So, Q3 earnings expectations ought to drive the market,” stated Chokkalingam.
Specialists categorical optimism in regards to the market’s prospects Q3 onwards.
Chokkalingam identified that the US accounts for round 20% of India’s complete exports. However this influence gained’t hit all listed firms equally. For instance, jewelry and sure textile firms aren’t absolutely represented within the listed house. So the tariff influence can be concentrated in particular sectors and corporations fairly than all the market.
“Home demand ought to greater than compensate for any non permanent export-related softness. Whereas affected sectors could face stress, stronger segments of the market can nonetheless pull indices greater,” stated Chokkalingam.
Earnings restoration can assist the market, however and not using a commerce deal, upside could also be restricted and the Nifty 50 could wrestle to breach 26,500–27,000 sustainably.
VK Vijayakumar, chief funding strategist at Geojit Investments Restricted, identified that the US–China deal is barely a short lived truce — a one-year pause — not a full settlement. So it’s too early to attract conclusions. In reality, this non permanent pause means the US could once more act powerful on India.
“The tariff discount on China was solely marginal. Subsequently, anticipating the US to take away penal tariffs on India or lower duties sharply just isn’t assured. That uncertainty stays,” Vijayakumar stated.
Earnings restoration can compensate for valuations, however the market nonetheless wants knowledge to verify this.
The festive-season gross sales have been stronger than anticipated, and authorities stimulus is working. Nevertheless, Vijayakumar emphasised that we have to see whether or not this momentum sustains past November–December.
“Solely the info over the subsequent two months will verify that and support market sentiment,” stated Vijayakumar.
Learn all market-related information right here
Learn extra tales by Nishant Kumar
Disclaimer: This story is for instructional functions solely. The views and suggestions expressed are these of particular person analysts or broking corporations, not Mint. We advise traders to seek the advice of with licensed consultants earlier than making any funding choices, as market situations can change quickly and circumstances could fluctuate.
