New Delhi: Electronics manufacturing services (EMS), telecom, industrials and retail are likely to post stronger earnings growth over the next two years, supported by an improving macroeconomic environment in India, according to a report by brokerage firm Antique.
The report highlighted that corporate earnings have a positive correlation with the Wholesale Price Index (WPI) and nominal GDP growth, both of which are expected to normalise in FY27.
As macro indicators stabilise, Antique expects a more favourable environment for corporate profitability.
“Sectors likely to deliver stronger earnings growth are EMS, telecom, industrial, and retail; while the laggards are likely to be oil & gas, IT services, power utilities, FMCG, and auto,” the report said, highlighting a further boost to Make in India and Atmanirbhar Bharat.
On the back of these macro tailwinds, the brokerage projects Nifty 50 earnings growth of about 16 per cent compound annual growth rate (CAGR) over FY26-28, a sharp improvement from the muted 7 per cent CAGR seen during FY24-26.
Sectors aligned with domestic demand and structural growth themes are expected to benefit the most from better demand conditions and operating leverage.
In contrast, oil and gas, IT services, power utilities, FMCG and automobiles may face sector-specific challenges that could restrain earnings growth.
The report also noted a slowdown in earnings downgrades across large, mid and small-cap stocks over the past four quarters, signalling improved earnings visibility and greater stability in corporate performance.
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