India's top listed companies continue to struggle with poor earnings growth, with Nifty 50 firms' share in India Inc's combined adjusted net profit declining to 47.1% in Q4FY26, down from 51.8% a year earlier and 49.8% in Q3FY26. According to reports from Business Standard, this represents their lowest share in at least 21 quarters. At their peak in Q3FY23, Nifty 50 firms accounted for 58.3% of combined adjusted earnings of all listed companies in the country. The latest earnings season revealed that FY26 Nifty earnings per share ended at ₹1,065, reflecting around 5% year-on-year growth, marking the second consecutive year of single-digit EPS growth for the benchmark index.
The combined net profit of Nifty 50 companies grew just 4.5% year-on-year in Q4FY26, marking an eighth consecutive quarter of single-digit growth. As reported by Business Standard, this growth comes off a very low base of 2.9% growth recorded in the March 2025 quarter. In contrast, the combined adjusted net profit of all 3,081 listed companies grew by 15.1% Y-o-Y in Q4FY26, picking up from 9.2% growth in Q4FY25. The combined adjusted net profit of Nifty 50 companies reached ₹2.23 trillion in Q4FY26, up from ₹2.14 trillion a year ago. The earnings season showed that a few large companies carried much of the incremental profit growth, with Bharti Airtel, JSW Steel, HDFC Bank, Infosys, and TCS together forming a major part of the year-on-year earnings addition.
Despite earnings challenges, Nifty 50 companies demonstrated stronger revenue performance with combined net sales growing 11.4% Y-o-Y in Q4FY26, reaching ₹20.1 trillion compared to ₹18.04 trillion a year ago. According to Business Standard, this represents a 12-quarter high and matches the growth rate of all listed companies. The combined net sales of all listed companies grew to ₹45.65 trillion in Q4FY26, up from ₹40.99 trillion a year ago. Nifty 50 companies' share of total revenues has increased to 44% in Q4FY26, up from 42.1% five years ago in March 2021. Among the standout performers, Eternal led with a sharp jump in profitability, reflecting the changing character of India's consumption and digital services space, while JSW Steel delivered strong earnings growth supported by stronger metal prices and better margins.
The earnings growth disparity between index companies and broader market is attributed to margin contraction due to higher raw material prices. As reported by Business Standard, the Ebitda margin of Nifty 50 companies declined by nearly 220 basis points Y-o-Y to 29.3% in Q4FY26, compared with 31.5% in Q4FY25. In contrast, the Ebitda margin for all listed companies declined by just 50 basis points Y-o-Y. Analysts attribute the poor earnings growth to slowdowns in key sectors including BFSI, FMCG, and IT services, which together have a 60% weightage in the Nifty 50. The positive momentum was not universal, with oil and gas businesses outside the oil marketing space, select pharmaceutical names, and some consumer-facing companies creating pressure on aggregate numbers.
The earnings downgrade cycle remains persistent despite some stabilization signs. According to JM Financial, 31 Nifty 50 companies representing 62% of index constituents witnessed downgrades to their FY27 EPS estimates in May 2026, while only 15 companies saw upgrades. Sector-wise, all companies in infrastructure & ports, cement, insurance, utilities, telecom, and industrials registered cuts, with infrastructure & ports seeing the steepest downgrade at 4.9%, followed by pharmaceuticals at 3.8% and telecom at 3.0%. However, metals and mining emerged as relative outperformers with three out of four companies receiving earnings upgrades, led by metals & mining with a 6.3% increase. Among individual companies, the sharpest EPS downgrades were seen in Cipla, Dr. Reddy's Laboratories, Adani Enterprises, Larsen & Toubro, and Adani Ports & SEZ, while Hindalco Industries, ONGC, InterGlobe Aviation, Tata Steel, and Bajaj Auto recorded the highest earnings upgrades.
