India Inc's earnings pulse weakens after Q1: Top 5 EPS upgrades, downgrades

Brokerages trim FY26 estimates for 130 of 192 BSE 200 companies, with a median EPS downgrade of 3.5%

India Inc’s financial performance in the first quarter of 2025-26 (Q1FY26) was subpar, with low single-digit revenue growth for the ninth consecutive quarter and profit before tax — excluding other income and one-offs — declining  year-on-year. 

Leading companies across key sectors such as banking, information technology services,  automotive, consumer, capital goods, and pharmaceutical struggled with weak sales and earnings growth. 

As a result, most brokerages have lowered forward earnings estimates for FY26 and FY27, both at the market level and for individual firms. 

For instance, Kotak Institutional Equities now expects FY26E and FY27E net profits of Nifty 50 companies to grow 9.6 per cent and 17.5 per cent respectively, compared with earlier expectations of 12.1 per cent and 15.4 per cent at the start of FY26. 

Overall, 130 of 192 BSE 200 companies with available estimates saw downgrades in their FY26E and FY27E earnings per share (EPS). By contrast, brokerages upgraded earnings estimates for just 56 companies, while six saw no change. This translates into an adverse upgrade-to-downgrade ratio of 0.43, underscoring the earnings challenge for markets  and investors. 

The median earnings upgrade for FY26E, at 2 per cent, was modest compared with a 3.5 per cent median downgrade. Downgrades spanned most sectors, while upgrades were concentrated in insurance, cement, non-banking finance, and oil & 

gas and refining. 

Here are five companies each that saw the biggest upgrades and downgrades in forward EPS for FY26E and FY27E.  The revisions in earnings estimates also led to changes in target prices.

  Earnings Upgrade Cos  

Muthoot Finance

 

* Muthoot Finance has been an outperformer on the bourses and brokerages remain bullish on its prospects

 

* India's largest gold financier’s net profit was up 90 per cent year-on-year (Y-o-Y) while its gross interest income was up 54 per cent Y-o-Y in the first quarter of 2025-26 (Q1FY26), beating analysts’ expectation

 

* The company gained by a continued rise in gold prices and a strong traction in retail credit

 

* As a result, its forward earnings estimates for FY26 and FY27 have seen double-digit upgrades

 

* Brokerages now expect Muthoot's FY26 EPS (earnings per share) to rise to ₹186.20, a 12.3 per cent increase over previous estimate of ₹165.80; likewise for FY27

 

* The stock is also attractively valued at a trailing price-to-earnings (P/E) of 17.5x and price to book value ratio (P/BV) of around 4x 

 

Max Financial Services

 

* The private life insurer, Max Financial Services, continued to report better-than-industry performance in Q1, leading to earnings upgrade by analysts

 

* Its new business annual premium equivalent (APE) was up 15 per cent in Q1 to ₹1,670 crore, according to Motilal Oswal Financial Services

 

* The company’s value of new business (VNB) was up 32 per cent Y-o-Y to ₹340 crore, 9 per cent higher than street estimates

 

* As a result, its VNB margin increased to 20.1 per cent from 17.5 per cent in Q1FY25

 

* Gross premium income grew 19 per cent Y-o-Y to ₹6,400 crore while renewal premium rose 17 per cent Y-o-Y to ₹3,870 crore

 

* Its EPS is now expected to grow to ₹12.40 in FY26 and to ₹15.10 in FY27 compared to earlier estimates of ₹11.60 and ₹13.60, respectively 

 

HDFC Asset Management Company

 

* HDFC Asset Management Company continued its good run and reported a better-than-expected revenue and profit growth in Q1

 

* In the quarter, the company’s revenues were up 24.8 per cent Y-o-Y while its net profit was up 24 per cent Y-o-Y

 

* Ebitda (earnings before interest, taxes, depreciation and amortisation) margin rose to 80 per cent of revenues in Q1 versus 77 per cent in Q1FY25, though a tad lower than 81 per cent in Q4FY25

 

* Other income grew to ₹230 crore, nearly 30 per cent higher than street estimates, due to mark-to-market gains

 

* After HDFC Asset Management Company’s (AMC’s) Q1 results, brokerages have raised their estimates for FY26 EPS by 4 per cent to ₹134.30 and FY27 EPS by 5.8 per cent to ₹154.10

 

* Motilal Oswal Securities has now raised its target price on the stock to ₹6,400, premised on 42x HDFC AMC’s FY27 EPS estimate, nearly 12 per cent higher than its current stock price 

 

Polycab India

 

* Electrical cables maker Polycab’s Q1 results were better than street estimates on all counts — revenues, profits and margins

 

* The company’s net sales were up 24 per cent Y-o-Y to ₹5,704 crore in Q1 while net profit was up 46.5 per cent Y-o-Y to ₹568 crore

 

* Ebitda margin improved to 15.9 per cent of revenues in Q1, from 13.7 per cent in Q1FY25 and 15.4 per cent in Q4FY25

 

* Growth was led by the Cable & Wire (C&W) business, which grew by 33 per cent Y-o-Y in Q1, while revenues of fast-moving electrical goods (FMEG) portfolio was up 18 per cent Y-o-Y

 

* Analysts have now raised Polycab’s EPS estimates for FY26 by 5.9 per cent to ₹167.90 and for FY27 by 5.8 per cent to ₹198.60

 

* Analysts at JM Financial have now raised Polycab’s target price to ₹8,000, nearly 14 per cent higher than its current price 

 

Shree Cement

 

* Shree Cement reported a strong earnings growth in Q1, driven by higher cement prices resulting in higher margins despite subdued volume growth

 

* For Q1FY26, net sales were up just 3.1 per cent Y-o-Y to ₹5,280 crore, but net profit was up 131 per cent Y-o-Y to ₹643 crore

 

* Ebitda margin was up nearly 900 basis points (bps) Y-o-Y to 29.7 per cent of revenues from 20.8 per cent in Q1FY25 and 28.7 per cent in Q4FY25

 

* Brokerages expect the earnings momentum to continue, driven by higher cement demand and prices

 

* Brokerages have now raised Shree Cement FY26 EPS estimate by 11 per cent to ₹527.10 from ₹474.60 earlier while FY27 EPS estimate is up 3.9 per cent to ₹660.10 from ₹635.20 earlier

 

* Axis Securities has raised its target price to ₹33,960, nearly 13 per cent higher than Shree Cement’s current stock price 

   

Earnings Downgrade Cos

 

ABB India

 

* ABB India reported subdued performance in Q1FY26, dragged by an adverse revenue mix and decline in price realisation, besides a slowdown in order inflows

 

* The electrical capital goods maker’s net profit was down 20.5 per cent Y-o-Y to ₹351.70 crore in Q1, from ₹442.60 crore in Q1FY25 and ₹474.10 crore in Q4FY25

 

* Ebitda margin was down by nearly 600 bps Y-o-Y to 16.33 per cent of revenues in Q1, from 22.44 per cent in Q1FY25 and 21.5 per cent in Q4FY25

 

* Analysts have cut their forward EPS estimates for FY26 and FY27 anticipating slower-than-expected growth in government and private capex

 

* The company's FY26E (E = estimates) EPS has been cut by 9 per cent to ₹86 while FY27 EPS forecast has been cut by 8.8 per cent to ₹98

 

* Elara Capital has set ABB stock’s target price at ₹5,330. ABB’s current stock price is ₹5,022 

 

Voltas

 

* Air conditioner major Voltas reported poor performance in Q1FY26 weighed down by lower sales amid weak consumer demand and an early onset of monsoon

 

* Voltas’ net sales were down 21.7 per cent Y-o-Y to ₹3,049 crore in Q1, from ₹3,997 crore a year ago and ₹3,591 crore in Q4FY25

 

* Net Profit was down 40 per cent Y-o-Y to ₹203.5 crore in Q1, from ₹339.1 crore in Q1FY25 and ₹220.5 crore in Q4FY25

 

* Ebitda margin contracted to 8.75 per cent of revenues in Q1, from 11.36 per cent in Q1FY25 and 9.2 per cent in Q4FY25

 

* Brokerages have now cut Voltas’ FY26 estimated EPS by 14.6 per cent to ₹24.5 while FY27 EPS estimate is down to ₹33.3 from ₹35.5 earlier

 

* ICICI Securities has set Voltas stock target price at ₹1,300. The current stock price of Voltas is ₹1,347 

 

Biocon

 

* Pharmaceuticals major Biocon reported lower-than-expected revenues and earnings in Q1, weighed down by a sharp reduction in generics sales and increased expenses related to new facilities

 

* Biocon’s net sales were up 15.8 per cent Y-o-Y to ₹3,910 crore in Q1FY26, from ₹3,376 crore in Q1FY25 and ₹4,358 crore in Q4FY25

 

* Consolidated net profit was down by 95 per cent Y-o-Y to ₹31.4 crore from ₹636 crore in Q1FY25 and ₹325.3 crore in Q4FY25

 

* Gross margin contracted 120 bps Y-o-Y to 63.5 per cent of revenues while Ebitda margin expanded 90 bps Y-o-Y to 19 per cent due to lower R&D and employee expenses

 

* Analysts have cut their EPS estimates for FY26 by 15.8 per cent to ₹4.70 from ₹5.60 earlier while FY27’s is down to ₹10.5 from ₹11.4 earlier

 

* Motilal Oswal Securities has a target price of ₹410 for Biocon, which is 14 per cent higher from its current share price of ₹359 

 

IDFC First Bank

 

* IDFC First Bank reported subdued earnings in Q1FY26, weighed down by margin contraction, rise in bad loans and slowdown in interest income growth

 

* The private sector lender’s net profit was down 29.4 per cent Y-o-Y to ₹453.50 crore, from ₹642.60 crore in Q1FY25 but higher than ₹295.60 crore in Q4FY25

 

* The bank’s gross interest income growth slowed down to 9.7 per cent Y-o-Y in Q1, from 14.5 per cent Y-o-Y in Q4FY25

 

* Interest expenses were up 15 per cent Y-o-Y while bad loan provisions were up 66.8 per cent Y-o-Y in Q1

 

* The bank is now expected to report an EPS of ₹3.20 in FY26, down 13.9 per cent from ₹3.70 estimated earlier. Likewise, FY27 estimated EPS is down to ₹5.50 from ₹5.90 earlier

 

* The stock is currently trading at a trailing P/E of 38.6 and P/BV of 1.3x 

 

Tata Elxsi

 

* Tata Elxsi reported a weak financial performance in Q1FY26, dragged by revenue decline and margin contraction

 

* The mid-size IT services exporter’s net sales were down 3.7 per cent Y-o-Y to ₹892 crore in Q1, from ₹926.5 crore a year ago and ₹908.3 crore in Q4FY25

 

* Net profit was down 21.6 per cent Y-o-Y to ₹114.4 crore, from ₹184 crore in Q1FY25 and ₹172.40 crore in Q4FY25

 

* Ebitda margin was down over 600 bps Y-o-Y to 20.93 per cent in Q1FY26, from 27.23 per cent in Q1FY25. It was also lower than 22.86 per cent in Q4FY25

 

* Analysts have cut Tata Elxsi’s FY26 estimated EPS by 12.8 per cent to ₹112.60 while FY27 EPS has seen 8.1 per cent cut to ₹139.20

 

* Incred Equities has a “Reduce” rating on the stock with an FY27 target price of ₹5,360, against its current stock price of ₹5,478