Nifty 50 companies to see 4.6% net profit growth amid mixed sector performance

Mumbai: Net profit of Nifty 50 companies at the aggregate level is expected to increase 4.6% year-on-year while revenue may increase 4.5% for the June 2025 quarter. Net profit is likely to show single-digit year-on-year growth for the first time in at least nine quarters amid an anticipated poor performance by select companies, including Tata Motors, IndusInd Bank and Coal India.

The sample's revenue is expected to grow in single digit for the fourth consecutive quarter reflecting persistent muted demand scenario. Select companies from metals, pharmaceuticals, cement, banking and finance and telecom sectors are expected to report double-digit profit growth for the quarter.

"Excluding metals and O&G, we project the earnings to grow 6% for the companies under our coverage while sales and EBITDA (operating profit before depreciation and amortisation) is expected to grow by 4% and 10% YoY," said Gautam Duggad, institutional research head, Motilal Oswal Financial Services.

The sample's operating margin may expand by 40 basis points to 21.4% for the March quarter. "Pharmaceutical companies are expected to maintain healthy margins with 11% EBITDA growth, supported by strong demand and stable input costs," said Vinit Bolinjkar, research head, Ventura Securitie. He said consumer staples faced margin pressures due to a high base effect from previous quarters and inflation in specific raw materials.

Analysts are cautiously optimistic about future growth amid improving rural consumption, expectation of a good monsoon, anticipated revival in government capital expenditure as major positives while uncertainties in global trade and geopolitics remain key concerns. "We remain optimistic about India's growth trajectory over the medium to long term, underpinned by structural strengths and a supportive economic cycle," said Duggad. He expected Nifty earnings growth to improve significantly to 11% in FY26 from 5% in the previous year.

Bolijkar stated that a broad-based consumption recovery, particularly in rural areas supported by favourable monsoons and government initiatives, presents a key opportunity, alongside India's growing role in global supply chain diversification. However, he added that inflation projected at around 4% may face upward pressure from global commodity price fluctuations while subdued urban demand could limit economic momentum.

Agencies

Sector Trend

Automobiles
The sales volume growth is likely to remain in lower single digits for majority of companies. Also, companies are likely to show margin pressure for the quarter led by higher input costs including that of steel. Weak exports demand may hurt companies such as Maruti Suzuki, Hyundai Motor and Bajaj Auto, which have significant overseas exposure.

Banking, Finance
Credit offtake slipped below 10% during the quarter amid slower retail offtake and cautious stance by lenders to limit unsecured loans. Margins are expected to remain under pressure as lower interest rates are likely to squeeze lending yields. A recovery is likely in the second half of FY26 helped by higher liquidity.

Capital Goods
Sustained momentum in order booking across segments, including power, water management and railways is expected to help the sector companies to register doubledigit YoY revenue and profit growth. Operating margins are likely to be stable given benign input costs.

Cement
Higher cement prices and improved sales volume is expected to result in strong double-digit growth in sales and profit for top tier cement companies. Inorganic capacity increase is expected to result in around 10% YoY volume growth.

Consumer Price rise may support revenue growth for majority of the companies as volume growth may remain muted amid sluggish demand in urban pockets and high cost inventory.

IT
The dollar-denominated sequential revenue growth is likely to remain subdued at under 2% for majority of the top tier software exporters. A stronger rupee against the dollar may limit margin expansion for companies. Trend in new deal wins will be watched closely.

Metals
Price trends continued to be mixed. Steel companies are expected to report robust growth given high domestic prices and lower coal cost. However, non-ferrous companies may show muted performance on weaker product prices. Healthcare Export growth is expected to be stronger than domestic growth. Hospital chains are likely to record double-digit revenue and profit growth due to higher footfalls and bed additions.