The consensus among analysts in February was that the aggregate profits of a sample of listed companies with wide coverage would grow 16.5 per cent in 2026-27 (FY27), according to a study in the National Stock Exchange’s Market Pulse report for September. 

This consensus expectation of profit growth for FY27 fell to 9.2 per cent by September, shows the data from this report.

The study includes 200 companies covered by at least five analysts in the preceding one-year period.   

The energy sector was the worst affected in terms of earnings downgrades amid having to absorb the pressure of higher oil prices. The consensus estimate of FY27 earnings growth dropped from 2 per cent in February to -16.9 per cent in September.

Most of the other key sectors saw a decline in earnings estimates. Consumer staples dropped from an estimated growth rate of 9.8 per cent for FY27 in February to -3.8 per cent in September. Consumer discretionary, industrials, information technology and financials all saw a drop of between 100 and 500 bps since February. 

Real estate was the exception. Earnings growth was upgraded by 350 bps to 28.1 per cent for FY27 from 24.6 per cent projected in February, amid sustained demand for premium housing. Other sectors are grappling with decisions on the extent to which they can absorb a rise in their expenses.  

“The biggest change between Q1 and Q2 is the increasing transmission of higher input costs into corporate P&Ls (profit and loss statements). Energy, freight, metals, chemicals and imported components have become more expensive, while currency (rupee) depreciation adds another layer of cost pressure for import-dependent businesses,” said an October 2026 Axis Securities (Axis Direct) Earnings Preview report authored by Uttam K Srimal, deputy head of research. Companies are responding through initiatives such as cutting costs and raising prices, though their ability to pass on higher costs will vary by sector and competitive intensity, according to the report. 

Increased prices of food and fuel, along with the elevated costs of higher-ticket size items like automobiles and durables amid rising interest rates, may adversely affect domestic demand in the near future, according to an October 9 PL Capital (Prabhudas Lilladher) India Strategy report from author Amnish Aggarwal. 

“We note that past 2-3 (quarters) have been very patchy with host of mass end products witnessing demand pressures while premium end segments growing at a fast clip. We expect similar scenario to play out in coming quarters as well,” it said. Analysts have pushed their expectations of profit growth to FY28. Consensus earnings growth for FY28 rose from 14.3 per cent in February to 17.2 per cent in September, showed the Market Pulse data. 

Earnings growth is expected to be positive for the FY26-28 period. Most of the gains are driven by three sectors. The financial sector is expected to account for 40.8 per cent of the incremental earnings during FY26-28. Consumer discretionary comes second with a 13.1 per cent contribution to incremental earnings. Industrials are to account for another 11.3 per cent.

The three sectors together will contribute nearly two-thirds of incremental earnings between FY26 and FY28.