Jefferies' analysis of 89 Indian-listed companies showed that 56% topped consensus estimates for the March quarter, marking the highest proportion of beats in five years. That outperformance was concentrated among certain financials, consumer staples and cement producers, even as wider analyst caution on geopolitical risks pushed revisions to FY2027 forecasts.
Private-sector banks - excluding two large peers noted separately - delivered asset-quality outcomes that exceeded expectations. Non-banking financial companies also recorded profit-after-tax growth above consensus, driven by stronger net interest margins and lower credit costs. Company commentary indicated robust momentum in April, with managements reporting no discernible disruption to growth or collections from the West Asia conflict.
Despite the quarter's beat rate, Jefferies highlighted a rise in downward revisions: 56% of companies experienced earnings downgrades for fiscal 2027, a 7 percentage-point increase from the prior quarter. The firm attributed much of the incremental caution to analyst concern around the Middle East conflict. Over the course of the results season, MSCI India consensus earnings estimates held roughly steady, with expected aggregate earnings growth for FY2027 now around 14%.
The information technology sector underperformed relative to peers. IT revenues contracted 0.3% sequentially and rose 0.9% year over year in constant-currency terms, missing expectations. Two large IT vendors offered restrained fiscal 2027 guidance, forecasting low- to mid-single-digit growth. Aggregate headcount across the sector declined during the quarter.
Within insurance, life insurers displayed mixed outcomes. Two major private life carriers missed estimates on lower value-of-new-business margins, whereas another large private life insurer topped forecasts. General insurance results were predominantly positive, with several carriers reporting results ahead of expectations.
Consumer staples companies reported particularly strong operating momentum. Firms such as leading household brands and beverage makers recorded sharp volume growth and margin expansion, the latter aided by operating leverage. Automakers largely posted results in line with forecasts, with original equipment manufacturers registering aggregate EBITDA growth above 19%; at least two prominent OEMs provided guidance exceeding street expectations.
The cement space also showed a bifurcated picture. Excluding two names, cement companies delivered results above forecasts. One large cement producer saw unit-level EBITDA expand on the back of lower costs and improved realizations, while another faced a weak quarter with persistently high costs.
Engineering and construction group results were mixed. One major conglomerate reported EBITDA about 5% below estimates, which Jefferies linked to weaker execution amid the Middle East conflict. Nevertheless, that company provided an order-flow guidance range of 10% to 12% for FY2027 that exceeded analyst expectations.
Overall, the reporting season combined pockets of stronger-than-expected operational performance with elevated caution from analysts driven by geopolitical uncertainty. While several sectors - including private banks, consumer staples, cement and parts of financial services - outperformed, information technology and select life insurers were notable laggards.
Key points
- 56% of 89 companies beat March-quarter estimates - the highest beat rate in five years.
- Analyst downgrades for FY2027 rose to 56% of companies, up 7 percentage points; MSCI India consensus earnings growth for FY2027 sits at about 14%.
- Sectors showing strength included private banks (exclusions noted), consumer staples, cement and parts of non-bank financials; IT and some life insurers lagged.
Risks and uncertainties
- Geopolitical risk - Concerns about the Middle East conflict have prompted an increase in earnings downgrades, affecting analyst sentiment across sectors such as engineering, construction and corporate guidance.
- Sector-specific pressures - Information technology firms reported revenue misses and subdued guidance, while certain life insurers faced margin weakness in value-of-new-business metrics.
- Cost pressures in commodities - Some cement producers faced persistent high costs, which weighed on margins for specific names.