Nifty 500 Companies Report 13% Earnings Increase in Q1, OMCs Impacted by West Asia Developments
MUMBAI: The top 500 companies in India reported a 13% increase in earnings for the April-June quarter of FY27 compared to the same period last year. Excluding oil marketing companies, which are grappling with significant input cost pressures due to the ongoing conflict in West Asia, the earnings growth surged to 23%, marking the highest rate in over two years, according to a report by Motilal Oswal Financial Services.
Mid and small-cap companies continued to outperform their large-cap counterparts in earnings growth. However, large caps led in sales growth during the quarter, while small caps trailed. The report highlighted that sectors such as metals and financials drove the earnings growth, while oil marketing companies faced substantial declines.
Sector Performance
The report indicated that the aggregate sales of Nifty 500 companies, excluding oil marketing companies, grew by 19% year-on-year in Q1FY27. This represents the strongest growth in 15 quarters, following a prolonged period of moderate revenue growth. Earnings before interest, taxes, depreciation, and amortization (EBITDA), again excluding oil marketing companies, rose by 16% year-on-year during the same quarter.
Corporate earnings exhibited broad-based growth, with notable contributions from the metals, financials, and telecom sectors. Telecom earnings soared by 384%, while metals recorded a 57% increase, marking the fourth consecutive quarter of strong growth. Financials, driven by non-banking financial companies (NBFCs), grew by 27%, and banks saw a 15% increase. Technology also contributed with a 14% rise. In contrast, oil and gas companies experienced a 34% decline in earnings, primarily due to losses reported by oil marketing companies, which recorded a loss of Rs 18,100 crore in Q1FY27 compared to a profit of Rs 16,200 crore in Q1FY26. Cement companies also saw a slight decline of 1%.
Small-cap companies led the earnings performance for the Nifty 500 in Q1FY27, with Nifty Smallcap-250 companies reporting a 35% annual growth. Nifty Midcap-150 companies, excluding oil marketing companies, also delivered strong results with a 30% year-on-year growth, while large caps, excluding oil marketing companies, reported a 20% increase, the highest in ten quarters.
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