1 day ago
India Inc Seen Posting Strong September-Quarter Earnings Despite Cost Pressures
Companies in India are expected to report strong results for the July-to-September quarter.
Analysts say consumer spending, lending and some export businesses have helped.
Car and other vehicle makers may do especially well because sales volumes grew strongly.
Banks are also expected to benefit from continued loan growth.
Consumer goods companies may sell more, but higher ingredient and material costs can reduce profits.
A later festive season makes some sales comparisons with last year harder.
Technology services companies may have a weaker quarter because customers are cautious about spending.
Cement demand increased, but fuel and transport costs could make it more expensive to produce and deliver cement.
Kotak Institutional Equities estimates Nifty 50 adjusted profit could rise 21% year-on-year, with revenues up nearly 22%.
Automakers may lead sector performance, with reported quarterly vehicle-volume growth exceeding 20%, aided by demand and GST-related price cuts.
Banks and shadow lenders are expected to record 12–14% loan growth, supporting low-double-digit industry earnings growth.
Consumer staples and durables are forecast to grow revenues, though commodity inflation, later festivities and competition could weigh on margins or comparisons.
IT services are expected to remain subdued, while cement demand is estimated to have risen 9–10%; higher fuel and freight costs may pressure cement margins.
- Who
- Indian listed companies, including firms in autos, banking, consumer goods, IT services and cement.
- What
- Companies are expected to report strong overall September-quarter earnings, with performance varying by sector and cost pressures affecting margins.
- Where
- India.
- When
- The September quarter earnings season begins Thursday; the article refers to Q2FY27 and GST rate revisions effective in late September 2025.
- Why
- Strong consumption, credit growth, elevated metal prices and currency depreciation may support results, while raw-material inflation, subdued IT demand and higher fuel and freight costs pose challenges.
Potential earnings support
Potential earnings pressures
Input costs and margins
Potential earnings support
Pricing power, price increases and stronger product mix may help companies offset raw-material inflation.
Potential earnings pressures
Higher commodity costs may squeeze margins in autos, consumer staples and durables; fuel and freight costs may weigh on cement.
Sector performance
Potential earnings support
Strong consumption and credit growth are expected to support autos, consumer businesses and lenders.
Potential earnings pressures
IT services may be subdued because discretionary demand remains weak and AI-related deflation is affecting the base business.
Quarterly comparisons
Potential earnings support
GST-related price cuts and robust demand are expected to support sales in some businesses.
Potential earnings pressures
The later festive season makes consumer-oriented results less comparable with last year, and competition may limit growth for apparel retailers.
Key facts
- Nifty 50 profit estimate
- Adjusted net profits estimated to increase 21% year-on-year in Q2FY27.
- Nifty 50 revenue estimate
- Revenue estimated to rise nearly 22% year-on-year.
- Nifty 50 FY27 earnings estimate
- Kotak Institutional Equities pegs index earnings at ₹1,227 at the start of the season.
- Auto volumes
- Reported quarter-on-quarter? No: vehicle volume growth was reported at more than 20% for the quarter.
- Lender loan growth
- Advance estimates put bank and shadow-lender loan growth at 12–14% year-on-year.
- Consumer staples volumes
- Estimated to increase 7–10% year-on-year.
- Cement demand
- Estimated to rise about 9–10% year-on-year in Q2.
Sources
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