India Inc.’s earnings trajectory for the March quarter (Q4FY26) is expected to remain mixed, with moderate growth overshadowed by sector-specific pressures and uneven demand trends, according to the latest outlook on the Equirus coverage universe.
On an ex-oil marketing companies (OMC) basis, revenue, EBITDA, and profit after tax (PAT) are projected to grow by around 12%, 8%, and 8% year-on-year, respectively. Including OMCs, headline growth stands higher at approximately 18% for revenue, 6% for EBITDA, and 5% for PAT. The growth momentum is largely driven by Autos, Metals, NBFCs, and FMCG, while Consumer Durables remain subdued and PSU banks continue to lag their private sector counterparts.
Uneven Growth Across Sectors
The earnings landscape remains fragmented, with strong performance in cyclicals and select consumption segments partially offset by continued stress in aviation and industrials. Within BFSI, NBFCs are expected to outperform, reflecting stronger profitability and credit growth dynamics.
Overall profitability remains under pressure, primarily due to weak performance in Airlines and Industrials, although gains in Metals, Chemicals, and Building Materials provide some cushion.
Sectoral Highlights
Airlines are likely to report a weak quarter, impacted by geopolitical tensions, rising aviation turbine fuel (ATF) prices, and rupee depreciation. Domestic passenger demand remained flat, while international traffic declined by around 6% sequentially. Elevated fuel costs and airspace disruptions have significantly strained margins.
Automobiles emerged as a bright spot, with robust OEM wholesale growth in Q4FY26—two-wheelers up 25%, passenger vehicles up 14%, and commercial vehicles rising 20–25%. While higher volumes and average selling prices supported revenues, margins may see sequential softening due to rising raw material costs.
Building Materials companies are expected to show resilience, particularly among organized players, amid raw material volatility. March 2026 saw improved demand driven by restocking, although SMEs faced disruptions and may take one to two quarters to recover. Pricing discipline remains a key monitorable.
In Cement, volumes are estimated to grow around 6.1% year-on-year, supported by realisation gains of roughly ₹70 per tonne, translating into EBITDA improvement of about ₹150 per tonne. However, cost pressures persist, including packaging expenses and an anticipated ₹300 per tonne coal and pet coke headwind from Q1FY27.
Chemicals are witnessing gradual recovery, particularly in agrochemicals, aided by volume uptick and inventory normalization. However, margins remain constrained due to pricing pressures and seasonality. Specialty chemicals and refrigerant gases continue to support growth through better product mix and export stabilization.
Consumer Durables saw improved momentum during the quarter, led by pre-summer demand for room air conditioners and price hikes. However, growth remained largely price-driven, with only modest volume expansion and slight margin pressure from raw material inflation.
Consumer Staples are expected to post steady growth, with revenues and EBITDA rising by approximately 13% and 11% YoY, respectively. Volume growth remains supportive, though unseasonal rains and a delayed summer impacted seasonal categories. Premiumization trends continue in alcobev, while luggage players reported mixed performance.
Financials continue to display stability, with net interest margins largely steady but with a slight negative bias. Credit growth is estimated at 5–6% QoQ, while deposits grew around 12% YoY, supported by CASA improvement. Asset quality remains stable, with NBFCs delivering strong profit growth of 14–15% QoQ.
Healthcare is expected to report a weak quarter, impacted by moderation in gRevlimid sales and seasonal softness in domestic markets. Margins are likely to remain under pressure, with US pricing and pipeline execution as key variables.
Industrials showed sequential improvement in government-led project activity, although private sector investments weakened. While execution remained healthy due to low-cost inventory, near-term growth may stay muted, with stronger order inflows expected from FY27.
IT Services are likely to post soft growth amid macroeconomic and geopolitical uncertainties. While deal wins remain steady, conversion timelines have lengthened, and AI-led demand is largely funded through cost optimization rather than incremental spending.
Internet companies continue to demonstrate resilience in food delivery and grocery verticals. Margins expanded modestly on a sequential basis, while quick commerce growth moderated amid a sharper focus on profitability. Expansion initiatives, particularly in rapid delivery, remain strong.
Metals are benefiting from improved steel prices and operating leverage, while iron ore remains strong. Aluminium is seeing gradual improvement supported by downstream demand, though coal remains weak.
Oil & Gas sector performance is being shaped by geopolitical volatility, which has led to spikes in crude oil and LNG prices. OMCs are facing pressure from weak marketing margins, while gas and city gas distribution (CGD) players are grappling with higher input costs. Reliance Industries remains relatively resilient amid the volatility.
Real Estate trends remain selective, with growth driven by new project launches. While the Mumbai Metropolitan Region (MMR) continues to perform well, Bengaluru has seen weakness and NCR is witnessing moderation. Pre-sales and collections remain stable, although realisations appear to have plateaued. Execution discipline and calibrated supply will be critical going forward.
Outlook
The Q4FY26 earnings season is set to reflect a nuanced picture of India Inc., with cyclical sectors and select consumption segments driving growth, while global uncertainties, input cost pressures, and sector-specific challenges continue to weigh on overall profitability. The divergence in performance across sectors underscores the importance of selective positioning as markets navigate a complex macroeconomic environment.
