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"The broader earnings outlook remains healthy, supported by improving domestic demand, strong credit growth, government spending and a recovery in private capex," said Feroze Azeez, Joint CEO, Anand Rathi Wealth. "Excluding oil marketing companies, aggregate earnings for the MOFSL Universe are expected to grow 24% year-on-year during the quarter," Duggad said. Read more: How a 9-year-old Warren Buffett learnt a lesson on compounding by rolling snowballs on the lawn of his Nebraska home The operating margin at the aggregate level is likely to contract by a tad 20 basis points to 21.9% from the year ago amid input cost inflation. Azzez expects margins to remain mixed as benefits of lower commodity costs are normalising while wage inflation and higher crude prices are creating some pressure on margins. "For capital goods, infrastructure and manufacturing, margins likely to remain stable to improving, supported by healthy order books, capacity utilisation and operating leverage," he mentioned, adding that for banking and finance companies, earnings growth would be driven more by strong loan growth than by expansion in margins. Read more: Why junk bonds deliver equity-like returns but with far inferior volatility, explains Saurabh Mukherjea Despite near-term challenges in the form of volatile energy prices, geopolitical and tariff risks, and weakening rupee against major currnecies, analysts are optimistic about medium-to-long term growth trajectory. Duggad believes that the risk-reward for Indian equities over a medium and long term has meaningfully improved given healthy earnings growth, resilient macroeconomic environment and cooling valuations. "With earnings growth increasingly concentrated in select themes, we expect market performance to remain firmly bottom-up, favouring growth-oriented businesses that are successfully scaling up and strengthening their competitive positioning," Duggad said. He expects 15-16% earnings growth over FY26-28 for the companies under his coverage. Azeez of Anand Rathi remains constructive for FY27 driven by strong healthy domestic demand and credit growth, government and private capital expenditure, and improving corporate earnings. "For FY27, Nifty 50 earnings per share (EPS) is expected to rise to ₹1,240 from ₹1,088 with 14% earnings growth," he said. Sector view Automobiles Demand across automobile segments remained resilient with sales volume growing in double digits year-on-year in the September quarter, barring lower tractor volume amid irregular monsoon. While revenue of majority of the auto makers is expected to rise in double digits, profits and profitability may remain muted due to higher input costs. Banking Net interest income is expected to grow in low double digits year-on-year while non-interest income may decline amid lower treasury income due to firm bond yields. Net interest margin may show weakness depending upon the extent of FCNR deposits raised by banks. The asset quality is likely to stay stable. Capital Goods Fresh orders from segments including power generation, transmission and distribution, data centres, and infrastructure kept the order book ringing during the quarter. While domestic execution gained pace amid scattered monsoon trend, geopolitical disturbance in the West Asian region may result in slower order ramp up. Higher raw material costs will weigh on profitability though the impact may soften due to pass-though of higher costs in some projects. Cement Cement demand is expected to grow in higher single digit in the September quarter, helped by sustained construction activities in an otherwise seasonally weak quarter due to monsoon. Demand was steady in the North, Western and Central regions. Cement prices showed a gradual recovery, largely to offset higher input costs. However, profitability is likely to remain under pressure. FMCG Barring ITC, fast moving consumer goods (FMCG) companies are likely to report double digit revenue growth amid stable sales volume, higher product prices and low base in the year ago quarter. ITC is expected to show weaker sales volume, which is expected to result in lower revenue and profit for the quarter. Information Technology Clients continued to observe caution while ramping up large, discretionary assignments. This is expected to keep top line growth muted for most top tier IT companies. The sequential revenue growth for the top tier companies is expected to remain under 2-3% for the quarte keeping currency rates constant. Operating margins may show a slight uptick in the absence of major wage increases for most of the top companies. Over 8.7% depreciation in the average rupee rate against the dollar during the quarter will support the rupee-denominated performance Metals Elevated prices of aluminium, copper, and zinc are expected to help non-ferrous companies to post strong performance in the September quarter. Ferrous companies, too, are expected to benefit from firm domestic demand from the infrastructure segment. Pharmaceuticals Companies with domestic focus are expected to show continued traction in the September quarter while US focused pharma companies such as Dr Reddy's Labs and Cipla are likely to report weakness with a double-digit drop in revenue. A weaker rupee is expected to soften the blow in reported profits. (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price (What's moving Sensex and Nifty Track latest market news, stock tips, Budget 2025, Share Market on Budget 2025 and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .) Subscribe to ET Prime and read the Economic Times ePaper Online.and Sensex Today. Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price
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