India Inc has delivered a better-than-expected earnings performance so far for the March 2025 quarter, but forward earnings downgrades continue to outpace upgrades, signaling lingering caution despite strong numbers, brokerage Motilal Oswal said in its interim review of the .
As of May 5, 109 companies in the Motilal Oswal Universe and 27 Nifty constituents, representing 54% of MOFSL’s estimated PAT and 65% of the Nifty’s, have declared results. Aggregate profit for these companies rose 6% year-on-year—well ahead of the estimated 2% decline—driven by better showings in the metals, technology, BFSI, and oil & gas sectors.
“The 4QFY25 earnings fare better than expected so far, but forward earnings revisions continue to show weakness, with downgrades outstripping upgrades,” the brokerage said.
Nifty outperformance driven by a few
Among the Nifty companies that have announced results, earnings grew 4% YoY against the brokerage’s forecast of 2%. This was led by strong results from and , which together contributed 121% to the incremental YoY earnings.
However, the overall beat masks weakness elsewhere. Five Nifty companies missed profit estimates, six beat expectations, and 16 were in line. On the EBITDA front, six companies surpassed estimates, while four fell short.
Widening gap in earnings revisions
Despite the earnings beat, the upgrade-to-downgrade ratio remains adverse. Of the 33 companies tracked within the MOFSL Coverage Universe, 21 have seen earnings downgrades of over 3%, compared to just 12 with upgrades. The downgrades were concentrated in sectors such as IT, oil & gas, and consumer.
Consequently, FY26 EPS for the Nifty was left broadly unchanged at Rs 1,155, while FY27 EPS was marginally raised by 0.3% to Rs 1,332, reflecting upgrades in HDFC Bank, ICICI Bank, M&M, and Kotak Mahindra Bank.
Sectoral trends mixed
Metals reported a 67% YoY jump in profit on a low base, while BFSI earnings rose 2% and OMCs defied expectations with a 14% profit increase against an anticipated 63% decline. Technology firms posted 7% profit growth. On the downside, real estate, PSU banks, and non-lending NBFCs registered YoY declines of 10%, 6%, and 7%, respectively.
Excluding financials, MOFSL Universe companies saw 9% YoY earnings growth versus an expected 4% drop. Excluding metals and oil & gas, the growth stood at 4%.
Outlook steady despite near-term headwinds
While Nifty FY25 earnings growth is expected to moderate to around 2%—after delivering a 20%+ CAGR between FY20–FY24—the medium- to long-term narrative remains intact, Motilal Oswal said. However, near-term risks from global macro conditions and trade tensions are likely to keep markets volatile.