Corporate earnings in India, particularly in the Nifty 500 index, have experienced a significant upswing, with profits rising by 16% year-on-year in the third quarter of FY26. This surge marks an eight-quarter high and one of the most robust reporting seasons in recent times, as per a report released on Friday.
The latest earnings report indicates a widespread recovery in profitability across various sectors, laying a solid groundwork for future growth in the equity markets. Bajaj Finserv AMC report underscores this positive trend in corporate earnings.
Despite the positive momentum in corporate earnings, the data reveals that the domestic equity markets have remained relatively stagnant for nearly 18 months, even amidst a strong global bull run. However, improving domestic fundamentals are gradually alleviating some of the previous challenges faced by the markets.
Sorbh Gupta, the Head-Equity at Bajaj Finserv Asset Management Limited, emphasized the significant strengthening of corporate earnings momentum in recent quarters. He highlighted the broad-based recovery in profitability as a key factor supporting the equity markets moving forward.
Various domestic indicators have shown improvement, with credit growth returning to double digits, reflecting increased demand and enhanced liquidity. Additionally, consumption indicators are on the rise following GST cuts, signaling a positive economic trend.
The report also points out the positive impact of the Reserve Bank of India’s cumulative 125 basis points rate cuts and liquidity injections, which have effectively reduced borrowing costs for both companies and consumers.
