The third-quarter earnings season for Indian companies has commenced, carrying significant expectations that it could mark a pivotal turnaround period. Investors are keenly watching this reporting cycle, as robust corporate performance has the potential to attract foreign investors back to the Indian markets and counterbalance pressures from global trade uncertainties.
Broad Expectations and Key Players
According to projections from Motilal Oswal Financial Services (MOSL), earnings for the companies under its coverage are anticipated to surge by 16% year-on-year (YoY). This would represent the highest growth in eight quarters. Concurrently, the Nifty index is expected to post an 8% YoY growth in Q3 of the fiscal year 2025-26.
The upcoming week is packed with major announcements. Tata Consultancy Services (TCS) will declare its results on Monday, while Reliance Industries, India's most valuable company, is scheduled to report on Friday. A series of banking sector results are also lined up for the weekend.
MOSL notes that the overall earnings growth will be driven strongly by sectors including oil & gas, financials (led by NBFC-lending), automobiles, metals, telecom, technology, real estate, capital goods, cement, and NBFC-non-lending. These segments are forecasted to contribute a substantial 77% of the incremental yearly earnings growth.
Six Nifty Stocks Poised for Major Bottomline Surge
An analysis highlights six Nifty 50 constituents that are projected to report a profit after tax (PAT) growth exceeding 40% in the quarter.
Tata Steel is poised for a remarkable performance, with MOSL forecasting a 225.5% YoY jump in PAT to ₹2,410 crore. This is attributed to better steel price realisations, operational efficiencies, and robust domestic demand, despite near-term global tariff uncertainties.
JSW Steel is another metal major expecting explosive growth, with estimated PAT soaring 137.3% YoY to ₹1,850 crore. While revenue might face pressure from muted realisations, healthy volumes are likely to offer support.
In the telecom sector, Bharti Airtel is favoured by analysts. MOSL expects its adjusted PAT to grow 54.8% YoY to ₹8,500 crore, with revenue up 19%. Average Revenue Per User (ARPU) is seen rising to ₹258.
For Tech Mahindra, a 47.7% YoY growth in PAT to ₹1,500 crore is anticipated, supported by a recovery in the auto and communication segments. Margins are expected to improve sequentially.
In the new-age technology space, Eternal is expected to rebound sharply with a 42.6% YoY growth in profit to ₹84.1 crore, following four quarters of decline, as its quick-commerce network nears breakeven.
In the FMCG domain, Tata Consumer is projected to report a strong 41% YoY rise in PAT to ₹399.6 crore, driven by broad-based growth across its tea and salt businesses.
Market Implications and Outlook
The earnings season unfolds against a backdrop where India's relative valuations have become more attractive, as noted by global brokerage CLSA. This, combined with the prospect of steady earnings growth, could reignite investor interest in Indian equities.
The performance of India Inc. is not just a report card for the past quarter but a critical signal for future capital flows. A strong showing can help stabilise markets and provide a counter-narrative to global macroeconomic headwinds. All eyes are now on the blue-chip results to set the tone for the market's trajectory in the coming months.
