India Inc’s corporate earnings are projected to increase at a compound annual growth rate (CAGR) of about 15% from FY26 to FY28, as per a report by Motilal Oswal Financial Services Ltd. This growth is supported by improving macroeconomic conditions, easing geopolitical concerns, and stronger earnings visibility. The report indicates that India is moving into a more favorable phase after nearly two years of market consolidation, with domestic equities well-positioned to benefit from global capital rotation.
Easing energy prices, improving macroeconomic stability, and strengthening corporate fundamentals are creating a positive environment for Indian equities in the medium term. While earnings for the June quarter (Q1FY27) are expected to decline by 3% year-on-year across the coverage universe, excluding oil marketing companies (OMCs), profit after tax (PAT) is forecasted to grow by 14% year-on-year, showing healthy momentum in various sectors.
According to the report, financials and metals are anticipated to lead earnings growth in the quarter. Sectors such as lending non-banking financial companies (NBFCs), private and public sector banks, metals, technology, capital goods, retail, consumer durables, and building materials are likely to perform well. On the other hand, the oil and gas, automobile, healthcare, and cement sectors may dampen overall earnings growth.
The report advises investors to monitor foreign institutional investor (FII) flows and the market’s capacity to absorb a substantial pipeline of initial public offerings (IPOs) and capital raising without impacting liquidity in the upcoming months. It also highlights that India’s long-term growth fundamentals remain strong, with future market trends expected to be increasingly influenced by company-specific earnings performance and execution.
