With the fourth quarter earnings season already kickstarting, brokerages have come up with their expectation for the current earnings. Most expect Nifty to deliver mid-single digit profit driven by consumption-oriented and domestic sectors. That said, macroeconomic risk continues to be the key monitorable going forward.
Axis Securities expects Nifty to deliver 4.8 per cent Q4 revenue growth, EBITDA is estimated to rise by 2.9 per cent and PAT growth is projected at 1.3 per cent YoY. Moreover, it added, excluding Oil & Gas & Metals, Nifty profit is expected to grow by 2.9 per cent YoY.
Meanwhile, according to a report by Anand Rathi, Nifty50 is expected to grow at 14 per cent (Q4) for 10 per cent earnings growth for FY25. “While earnings growth in H1FY25 was subdued, it said, Q3 results exceeded market’s expectations, with aggregate PAT growth of 11.5 per cent, driven primarily by financials and healthcare sectors. With YTD growth at 8.2 per cent, achieving the projected 10 per cent earnings growth for FY25 would require around 14 per cent growth in the remaining period. Ahead, we anticipate Nifty50 earnings to grow at a healthy pace, supported by increased government capex and a recovery in agricultural output, aided by stronger kharif harvest and favorable conditions for the rabi season,” the analysis report by Anand Rathi said.
“The Q4FY25 earnings season was marked by 1) Sequential improvement in capex spending, 2) A series of positive measures in the domestic economy taken by the RBI and the government, 3) Volatile currency, 4) Volatile trade dynamics, and 5) Volatile crude prices. All these developments indicate that the Q4FY25 earnings would show a mixed trend, similar to the previous quarters. Some breather is expected in Q4FY25 numbers, led by sequential improvement in some of the pockets of high-frequency indicators. However, the broader consumption demand could still take 1-2 quarters to get back on track,” it said. Per the analysis report by Axis Securities, the improvement is expected in certain pockets like BFSI, IT, Healthcare, Telecom, and Industrials, while Consumer Staples, Retail, and cyclical sectors like Oil & Gas remain under pressure.
Macroeconomic risks
In the near term, macroeconomic risks such as trade policy uncertainty, the risk of a global market slowdown due to reciprocal tariffs, and recessionary concerns will continue to challenge market direction. “Going forward, we expect market positioning in India to be divided between domestic-facing and export-facing sectors. At this juncture, the risk-reward balance appears to favor domestic-facing sectors due to minimal impact from reciprocal tariffs, while export-oriented sectors will remain in a wait-and-watch mode, contingent on further developments and their impact,” said Axis Securities.
Per the brokerage firm, largecap stocks, ‘quality’ stocks, monopolies, market leaders in their respective domains, and domestically focused sectors and stocks may outperform the market in the near term.
With regards to reciprocal tariffs imposed by US President Donald Trump, Axis Securities said, “We believe there is limited direct impact on India as higher tariffs have been imposed on other competing countries. In the near term, select sectors may face volume, margins, and growth challenges. Over the next few weeks, monitoring any retaliatory tariffs by other countries and developments in country-level bilateral agreements will be crucial.”
Anand Rathi agreed, “India, in this stand-off, is poised to benefit as the implied 26 per cent tariff imposed is lower than those on its peers like China (54 per cent) and Vietnam (46 per cent). However, this would still mean that export-oriented sectors would have witnessed increased uncertainty. IT and chemicals are the sectors that would have faced headwinds, owing to the policy uncertainty. In contrast, global commodities including ferrous metals likely saw a strong quarter due to increased prices in India and demand uptick in China.”
Key sectoral highlights for Q4FY25
NBFC fares better than banks: According to Axis Securities, banks under coverage are expected to deliver around 12 per cent YoY credit growth, largely in line with industry growth.
“We would watch out for management commentary on growth trajectory in FY26 and direction for recovery in the unsecured segments, particularly MFI and Credit Cards (CC). Overall, for NBFCs under our coverage, we could expect disbursement momentum to improve sequentially, driving healthy AUM growth for most financiers,” it added.
According to Anand Rathi, growth for NBFCs are expected to have been strong with lower QoQ margins. Lower credit costs are expected to support stable earnings growth.
Healthy demand in cement: Cement demand in India has shown resilience, particularly in Q4FY25, following a strong Dec’24. Core sector data from the central government confirms double-digit growth in Jan and Feb 2025, driven by increased construction activity and infrastructure projects. Axis Securities said, “Channel checks suggest that demand conditions have further strengthened, with expectations of continued momentum.”
Anand Rathi said, “For our covered companies, we expect Q4 volumes to have grown 6.6 per cent YoY, 23.4 per cent QoQ, and all-India cement prices are likely to have averaged at Rs 357 a bag (vs Rs 380 in Q4FY24 and Rs 345 in Q3FY25). We expect realizations for our covered companies to have averaged at Rs 5,076/tonne. While fuel prices have started inching up, the low-fuel cost inventory would aid operating performances.”
Power & Ancillary: Cumulative all India electricity demand over Jan-Mar’25 stood at 416 BU as compared to 400 BU for the same period last year. For Q4FY25, Axis Securities said, electricity demand has improved with the early onset of summer and peak demand reaching up to 238 GW during Q4FY25 in Feb’25 (vs 224 GW during Q4FY24 in Jan ’24).
FMCG and Retail: Per Axis Securities, volume growth for FMCG companies under coverage is expected to remain soft, continuing the trend seen in Q3FY25, with rural markets outperforming urban regions due to persistent urban demand weakness. However, with an improving outlook, it added, the guidance and commentaries remain key monitorables for the sector.
Meanwhile, Anand Rathi analysis report stated, “Consumption trends in Q4 were likely mixed with better demand seen for summer-centric categories like juices, prickly heat powders, sunscreens, ice-cream, etc., due to the early summer; winter-specific products, meanwhile, could have been a drag due to the short winter season. Urban general trade (GT) demand remained weak, but is improving QoQ. Rural demand, MT/ecommerce and QC are expected to maintain healthy growth. Companies hiked prices in a few product categories such as coconut oil, biscuits, soaps, etc., to mitigate impacts from input cost inflation. Also, players continued to invest in brands/innovations to drive volumes. Thus, YoY, EBITDA margins are expected to moderate for most FMCG companies. We remain optimistic regarding improved demand and margin performance in FY26/27, helped by rural uptick, recovery in urban demand, price hikes and the recent moderation in crude oil & other commodities.”
Auto sector: According to Axis Securities, earnings downgrades are expected across companies due to weakness in global and domestic demand. “We expect the Tractor segment to perform better than the 2W/PV/CV, supported by favorable monsoons and higher water reservoir levels, leading to revival in rural demand. Additionally, export volume recovery will be crucial for earnings visibility in FY26 and beyond,” it said.
Pharma and Healthcare: “We anticipate that pharmaceutical companies within our coverage will collectively demonstrate revenue growth of 10.9 per cent YoY and 0.8per cent QoQ. Domestic formulations and niche launches in the US market will likely drive this growth. However, the situation needs to be monitored closely related to any potential imposition of tariffs on Indian pharma companies,” Axis Securities said. At the same time, it added, healthcare companies are likely to showcase growth led by improvements in occupancies, higher beds, and the addition of new hospitals.