India's September-quarter earnings season delivered impressive profit growth, with 181 companies reporting at least a doubling of net profit from a year earlier. Stronger demand, improved margins and a recovery across several sectors helped India Inc regain momentum after a prolonged period of sluggish earnings growth.
An analysis of quarterly results data compiled by Ace Equity shows that companies across banking, metals, pharmaceuticals, energy, consumer businesses and industrial manufacturing reported YoY profit growth of more than 100% in the second quarter of FY27.
The list includes some of India's biggest companies, such as Indian Oil Corporation, JSW Steel, Hindustan Zinc, Adani Power, GAIL, Vedanta and Bharat Heavy Electricals, alongside newer businesses such as Nykaa's parent FSN E-Commerce Ventures, Paytm's parent One97 Communications and Lenskart.
The analysis covers companies whose September-quarter results are included in the supplied dataset. Of the 186 companies analysed, 181 recorded profits that at least doubled from a positive year-earlier base. Five companies reported losses in both periods and were excluded from the count, despite showing percentage changes of more than 100% in the source data.
The strong performance comes against the backdrop of a broader improvement in India's corporate earnings cycle.
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According to Jefferies, half of the 105 companies under its coverage that had reported results saw upgrades to their FY27 earnings estimates, compared with 41% that faced downgrades. Another 9% saw no change.
The brokerage also found that 56% of companies delivered results above expectations, compared with 52% in the previous quarter. "The September quarter results so far have been healthy with upgrade ratio sustaining at 50%+," Jefferies said in its strategy note.
Metals and energy companies deliver sharp gains
Metals and energy companies were among the biggest contributors to the list of profit doublers. JSW Steel reported a 192% jump in quarterly profit to Rs 5,067 crore from Rs 1,734 crore a year earlier. Revenue increased to Rs 53,697 crore from Rs 44,560 crore.
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Hindustan Zinc's profit surged 142% to Rs 6,412 crore, while revenue climbed to Rs 14,582 crore from Rs 8,282 crore. Vedanta reported a 151% rise in profit to Rs 6,202 crore, while Steel Authority of India posted a more than fivefold increase in profit to Rs 1,670 crore.
Energy companies also featured prominently. Indian Oil Corporation's profit jumped 192% to Rs 21,854 crore, compared with Rs 7,480 crore in the corresponding quarter last year. Adani Power reported a 142% increase in profit to Rs 7,019 crore, while GAIL's profit rose 160% to Rs 4,452 crore.
Banks, financial companies join the rally
The improvement extended to financial services, with several banks and lending companies reporting substantial profit growth. IDFC First Bank's profit more than tripled to Rs 1,049 crore from Rs 348 crore, while RBL Bank's earnings rose 159% to Rs 498 crore.
Bandhan Bank reported a 456% increase in net profit to Rs 622 crore, while Equitas Small Finance Bank recorded an eightfold jump to Rs 218 crore. Ujjivan Small Finance Bank's profit nearly tripled to Rs 365 crore, while Poonawalla Fincorp reported a fivefold increase to Rs 375 crore.
CreditAccess Grameen and Muthoot Microfin were among the other lending companies to report profit growth exceeding 100%.
Brokerages have also identified banking as one of the stronger-performing sectors this earnings season. Jefferies raised its FY27 earnings estimates for banks under its coverage by 3% to 7%, supported by better-than-expected net interest income and lower credit costs at major private lenders.
Titan, Nykaa and Paytm post big gains
Consumer businesses and technology-focused companies also reported sharp profit increases. Titan's net profit more than doubled to approximately Rs 2,394 crore from Rs 1,119 crore. However, the figure included an accounting gain of Rs 671 crore linked to its Damas acquisition. Excluding this gain, profit grew 54% to Rs 1,722 crore.
Titan also benefited from Rs 536 crore in customs duty-related gains, making adjustments important when assessing its underlying performance.
Nykaa's parent, FSN E-Commerce Ventures, reported a 207% increase in profit to Rs 101 crore, while revenue rose to Rs 3,006 crore. Paytm's parent, One97 Communications, reported a profit of Rs 228 crore, compared with Rs 22 crore a year earlier, representing growth of more than tenfold. Lenskart's profit increased 121% to Rs 231 crore, while Multi Commodity Exchange reported a 129% rise to Rs 455 crore.
In pharma, Laurus Labs posted a 125% increase in profit to Rs 437 crore. Bharat Heavy Electricals reported a 123% jump to Rs 802 crore, indicating that the profit recovery has extended to capital goods and industrial companies.
Brokerages see signs of an earnings recovery
Motilal Oswal said the September-quarter earnings season was shaping up to be the strongest in 12 quarters, based on its interim review of 230 companies. Among the 35 Nifty companies that had announced results at the time of its November 2 review, aggregate earnings grew 22% YoY, led by Reliance Industries, JSW Steel, ICICI Bank, Coal India and Axis Bank.
Ahead of the earnings season, Motilal Oswal had projected 22% profit growth across its 399-company coverage universe and 27% growth for Nifty companies, with financials, metals, oil and gas, and telecom expected to drive the expansion.
The brokerage also projected earnings growth of 15% for FY27 and 17% for FY28.
Jefferies, meanwhile, raised its FY27 earnings growth forecast for the MSCI India index by one percentage point to approximately 15%, although overall consensus estimates remained broadly unchanged.
However, the sharp profit gains reported by individual companies warrant closer scrutiny. Several businesses benefited from a relatively low profit base in the corresponding quarter last year, while exceptional gains and changes in commodity prices also boosted earnings at others.
For instance, Sterlite Technologies reported a profit of Rs 517 crore, compared with just Rs 4 crore a year earlier, marking a jump of more than 12,000%. Similarly, Welspun Living's profit surged from Rs 14.86 crore to Rs 169.81 crore, rising more than 1,000%.
Such increases can result in unusually high growth percentages without necessarily indicating that profits will continue to rise at the same pace.
(Data: Ritesh Presswala)
Disclosure: This article has been written by Podishetti Akash, who is not a SEBI-registered Research Analyst or an Investment Adviser. Podishetti Akash and his ‘relative(s)’ (as defined under Section 2(77) of the Companies Act, 2013) do not hold any financial interest in the companies mentioned in this article as of the date of publication. The views/recommendations mentioned in this article, wherever applicable, are those of the respective SEBI-registered Research Analyst/brokerage and have been reproduced/reported with due attribution. They should not be construed as the views or recommendations of The Economic Times Digital or the journalist. Readers are advised to consider the original research report and make their investment decisions based on their own assessment. Brokerage disclosureshere.
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