Motilal Oswal has raised Nifty EPS estimates for FY27 and FY28 following a strong 22% year-on-year profit growth reported by Nifty companies so far. While the upgrade signals an earnings recovery, investors are monitoring risks such as weak market breadth and ongoing foreign investor selling.
Motilal Oswal Financial Services has revised its earnings per share (EPS) estimates for the Nifty 50 index upward, reflecting a positive outlook on corporate profitability for the current and coming fiscal years. The brokerage has raised its Nifty FY27 EPS forecast by 1.1% to ₹1,247 and the FY28 estimate by 1.6% to ₹1,428. This adjustment follows a robust second-quarter performance where Nifty companies that have declared results reported an aggregate earnings growth of 22% compared to the same period last year.
The domestic earnings season has delivered broad-based gains within the brokerage's coverage universe, which saw a 33% surge in profit after tax (PAT). This growth is largely concentrated in three key areas: BFSI, Metals, and Oil & Gas, which together contributed to 78% of the incremental profit growth. Notable contributors to this trend include major names like Reliance Industries, JSW Steel, ICICI Bank, Axis Bank, and Coal India. The stability of EBITDA margins, which only contracted slightly by 20 basis points when excluding the financial sector, suggests that many companies are successfully managing cost pressures through volume growth and pricing strategies.
Despite these upgrades, the market environment remains complex. Profit growth is unevenly distributed, with sectors like Healthcare and Cement acting as drags on aggregate performance. Furthermore, while index-level earnings are improving, the broader market shows signs of underlying fragility. Recent data points to a weak advance-decline ratio, which has hit a seven-month low, indicating that fewer stocks are participating in the market rally compared to the index heavyweights.
Investors are also tracking significant external pressures that could impact equity performance. Persistent selling by foreign institutional investors and rising bond yields continue to create volatility. Additionally, factors such as fluctuations in global crude oil prices remain a monitorable risk. Motilal Oswal Financial Services shares closed at ₹964.40 on November 2, 2026, marking a gain of 2.38%. Looking ahead, market participants will likely watch for the completion of the earnings season for the remaining companies to see if the growth momentum broadens beyond the current dominant sectors, as well as any shifts in foreign fund flows that could influence market sentiment.