Motilal Oswal expects Nifty 50 companies' PAT to rise 8% YoY in Q3, revenue up 11%

Q3FY26 earnings expectations

• Nifty 50 firms expected to see 8% topline growth in Q3 FY26, says Motilal Oswal
• Earnings growth seen at 11%, with PAT up 16% YoY, highest in eight quarters
• GST2.0 cuts and festive demand boost discretionary consumption sectors

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The Nifty 50 companies are expected to report an 8 percent growth in topline in the October-December quarter of the financial year 2026, said Motilal Oswal Financial Services. Apart from metals and oil & gas, Nifty 50 companies are likely to report 11 percent growth in earnings, the domestic brokerage said.

In its note titled 'India Stretegy', Motilal Oswal said that it expects Nifty 50 companies' sales to grow 11 percent and EBITDA to rise 10 percent during the quarter under review.

'Indian equity markets appear in a favorable space':

“As we step into CY26, Indian equity markets appear in a favorable space with multiple market-supportive, growth-positive building blocks already in place,” Motilal said.

This comes after Indian equities recorded muted gains in calendar year 2025, in comparison to global indices materially. “In CY25, India had to endure a constant flow of disproportionate and punitive US trade measures, which were instrumental in catalyzing a ~USD19b in FII outflows. However, the government and the RBI have been active in mitigating external headwinds and have adopted several stimulative fiscal, monetary, and reform measures to unshackle domestic growth impulses,” the brokerage said.

It believes that these measures should now begin to manifest in full force in 2026. The brokerages sees limited domestic risk factors thwarting this. “However, geopolitics and global trade continue to be in uncharted suboptimal territories and cast a shadow of chronic risk aversion for equity markets. Hence, with most drivers in place, consummation of the long-pending Indo-US bilateral trade deal will be a key potential catalyst for the upmove of Indian markets as the FII outflows slow down, while DIIs are likely to stay a bedrock,” it added.

The companies under Motilal’s coverage are expected to report a 16 percent growth in profit after tax - the highest in the past eight quarters. Even barring OMCs, the firm sees PAT growth at a healthy 13 percent YoY despite the drag from two large sectors, banks (3 percent YoY rise) and technology (8 percent YoY rise).

“The quality of growth should be better than previous quarters, as we expect 20 sectors/segments to post growth in double digits, marking the completion of the full circle of earnings recovery since it first started to weaken in Q1 FY25,” Motilal Oswal said.

It also expects the October-December quarter of FY26 to bear the full-blown effect of GRST 2.0 cuts that were implemented in September 2025. “This will be keenly observed for its impact across sectors – even as companies in a few sectors still contend that some transition-related teething issues spilled over into Oct’25. Several items of discretionary consumption (such as cars, travel, and hospitality) have seen a demand resurgence as the GST2.0 stimulus, combined with the festive season, easier interest rates, and personal income tax relief, aided disposable income and purchasing power,” it added.

Beyond the Q3 results, the corporate commentary on the continuing effect of stimulative measures will be critical, Motilal said, adding that this will help assuage investor concerns over the sustainability of the demand uptick once initial enthusiasm post rate cuts and tax cuts normalizes.

How will the different sectors perform?

According to Motilal Oswal, the earnings of the oil & gas universe are likely to jump 25 percent YoY, fueled by OMCs. This will mark the third successive quarter of strong growth after five straight quarters of decline. Auto sector is likely to report a strong quarter of YoY earnings growth of 25 percent, while metals universe is projected to report a profit growth of 15 percent YoY over a soft base of Q3 FY25.

It further expects telecom universe to clock profits for the fifth successive quarter. Technology sector is likely to register a modest earnings growth of 8 percent YoY, indicating the tenth quarter of single-digit earnings growth. Real estate universe meanwhile is likely to deliver a strong quarter with earnings growth of 64 percent YoY in Q3 FY26, according to the brokerage.

Capital Goods sector is projected to report a healthy earnings growth of 24 percent YoY, the highest in six quarters, while cement universe is expected to report a strong earnings growth of 66 percent YoY. Healthcare and consumer sectors are expected to post a modest earnings growth of 10 percent and 9 percent YoY respectively, while chemicals sector is likely to report a strong earnings growth of 25 percent YoY.

SBI, Titan, Mahindra & Mahindra (M&M), Infosys and Eternal remain the firm’s top Nifty 50 ideas.