Street places hopes on H2, cautious on GST cut effect

Early estimates show India Inc.'s topline may have grown just 5-6% in Sep quarter

- Mayur Bhalerao & Abhinaba Saha

India Inc.'s top executives expect earnings to pick up only in the second half of FY26, and a majority believes the Goods and Services Tax (GST) boost to consumption has been overestimated, Mint's fifth quarterly market survey found, at a time of domestic resilience amid global uncertainty.

Of 36 fund managers, chief executive officers (CEOs) and research heads surveyed between 10 and 15 October, around 83% of the respondents, including those from Kotak Securities and Emkay Global, expect the September-quarter earnings growth to remain moderate and broadly in line with projections. Policy-led momentum is likely to pick up only from the December quarter.

"Despite global headwinds, India's domestic growth remains resilient. FY26 will be stronger than FY25, and FY27 could see double-digit earnings growth supported by GST 2.0 reforms, government capex, and policy tailwinds," said Dhiraj Relli, managing director & chief executive officer, HDFC Securities. He expects Nifty 50 firms to post 6-7% profit growth this quarter (July-September), with valuations already pricing in nearly 20 times FY27 earnings.

Neeraj Chadawar, head of fundamental and quantitative research at Axis Securities, expects Nifty 50's revenue, operating income and net profit to rise 9%, 4.8% and 8%, respectively, year-on-year, led by telecom, industrials, and utilities in Q2. However, banks and FMCG firms could face margin pressure, with a broader recovery likely only in the second half, he said.

About 14% of the survey respondents foresee muted second-quarter earnings amid global volatility and rising costs, while just 3% expect a positive surprise driven by a good monsoon and fiscal support.