Motilal Oswal expects Nifty 50’s Q4 earnings to rise 6% amid Iran-US tensions
Domestic securities companies recently India Strategy Knott said the upcoming fourth-quarter earnings season will reflect the impact of the prolonged closure of the Strait of Hormuz. Companies in these coverage universes are expected to post modest revenue growth of 10% year-on-year in the fourth quarter of FY26. This is lower than the 18% growth in the third quarter and 15% growth in the second quarter of the same fiscal year.
Financial sector will record strongest profit growth
Meanwhile, Motilal expects the fourth quarter earnings of Nifty 50 companies excluding financials to grow by 4% year-on-year and excluding global raw materials (metals, oil and gas) by 5% year-on-year. The overall revenue growth will be driven by the financial sector, led by non-banking financial companies (NBFCs), he added. The NBFC is expected to register revenue growth of 30% in the fourth quarter of FY26. The metals sector is expected to post 27% YoY earnings growth, followed by private sector banks (12%), telecommunications (11x revenue growth), technology (11%) and automotive (12%). Retail (47%), EMS (17%), and consumer (10%) companies are also expected to post healthy double-digit growth during the quarter.
However, securities firms predict that the contribution of public sector banks will be modest, increasing by 2% compared to the previous year. Capital goods, consumer durables and cement segments are expected to see revenue declines of 6%, 5% and 1% respectively in the fourth quarter of FY26 compared to the same period last year.
Motilal said the expected slowdown in growth in the fourth quarter was primarily due to the impact of rising crude oil and gas prices across the energy and crude oil derivatives consumption sectors. “The positive revision trend over the past two quarters reversed in March 2026, which was also reflected in our earnings revisions,” he added.
However, Motilal expects Nifty 50 companies to grow revenue by 13% and EBITDA by 9%. “We have reduced our FY26E/FY27E/FY28E Nifty EPS estimates by 2.0%/1.3%/1.3% and expect revenue to grow by 5%/18%/16% YoY to Rs 1,060/Rs 1,246/Rs 1,440. Automobile, Capital Goods, Logistics, Technology and Utilities have contributed the most to the downward revision in FY26. “It is an estimate,” he said.
market and war
As FY26 concludes and the market transitions into FY27, the Indian stock market stands at a pivotal juncture, supported by several tailwinds but under pressure from geopolitical headwinds due to the ongoing Iran-Israel-US conflict, the brokerage said.
“Indian equity markets will benefit from a favorable base year characterized by various fiscal and monetary easing measures, progress on trade agreements, improving aggregate demand conditions, better-than-expected GDP printing, relative underperformance compared to emerging markets and continued retail investor participation,” he added.
“However, despite these positives, the Iran-Israel-US war and its impact on the Indian economy and corporate earnings have disrupted the near-term market setup, given that a significant portion of India’s energy imports pass through the Strait of Hormuz (35-40% of crude oil demand and 54% of pre-war LPG demand),” the brokerage said.
The company said its base case assumed the war would not last for months or quarters. Indian markets, like other emerging markets, have declined since the conflict began after a sharp underperformance in 2025.
“This suggests that portfolios should be structured bottom-up with a focus on earnings visibility, as the Indian market is not a top-down market despite its relatively low valuation. If the downside from the current valuation level is limited, any upside will be determined by earnings growth. Therefore, it is better to invest in companies with strong earnings visibility with reasonable valuation adjustments,” he added.
