Sign in Subscribe
Stock markets

Indian Markets Show Signs of Improvement

Strategic Insights

— 1 min read

The domestic stock markets are now in a healthier state compared to last year, according to a report by Motilal Oswal Financial Services. The report highlights that the earnings cycle appears to be bottoming out, with growth expected to accelerate into double digits. The earnings for the second quarter of FY26 have largely been in line with expectations, with the intensity of earnings cuts moderating. Valuations are also seen as reasonable, with the Nifty trading at 21.4 times earnings, close to its long-period average (LPA) of 20.8 times.

Key Takeaways:

  • The earnings cycle is bottoming out, with growth expected to accelerate into double digits, according to Motilal Oswal Financial Services.
  • The earnings for the second quarter of FY26 have largely been in line with expectations, with the intensity of earnings cuts moderating.
  • Valuations are seen as reasonable, with the Nifty trading at 21.4 times earnings, close to its long-period average (LPA) of 20.8 times.
  • The series of measures undertaken by the government will help reset the trajectory of corporate earnings as domestic reforms continue.
  • The resolution of the ongoing tariff stalemate will be a key external catalyst for the market.
  • Motilal Oswal continues to focus selectively on high-conviction SMID (small and mid-cap) names within its portfolio.
  • Of the 27 Nifty companies analyzed in the second quarter of FY26, 15 delivered in-line results, 5 recorded a beat, and 7 missed expectations by a margin of 5 per cent or more.
  • Coal India, Axis Bank, Eternal, Hindustan Unilever (HUL), and Kotak Mahindra Bank dragged overall Nifty earnings lower.

Statistics:

  • Nifty stocks have reported sales growth of 9 per cent year-on-year
  • EBITDA (earnings before interest, taxes, depreciation, and amortization) growth was 8 per cent year-on-year
  • PBT (profit before taxes) growth was 5 per cent year-on-year
  • PAT (net profit after all expenses and taxes) growth was 5 per cent year-on-year
  • The Nifty trading at 21.4 times earnings, close to its long-period average (LPA) of 20.8 times
  • 15 Nifty stocks delivered in-line results
  • 5 Nifty stocks recorded a beat
  • 7 Nifty stocks missed expectations by a margin of 5 per cent or more

Sources:

  • Motilal Oswal Financial Services
  • ANI (All India Radio)
  • SyndiGate Media Inc.

Read more