JM Financial pegs 9.8% YoY rise in Nifty50 PAT in Q3FY26; check top drivers

Domestic brokerage firm JM Financial has forecast Nifty50 companies’ aggregate earnings to grow 9.8 per cent year-on-year (Y-o-Y) in the third quarter of FY26 (Q3FY26E). The growth, according to analysts Venkatesh Balasubramaniam, Shanay Mehta and Shalin Choksy, will be led by IT services, automobiles, metals & mining, telecom and industrials.

 

Excluding the banking, financial services, and insurance (BFSI) sector, analysts expect the Nifty50’s profit after tax (PAT) in Q3FY26E to rise by 16.2 per cent Y-o-Y. Excluding both BFSI and oil & gas, they forecast a 20.5 per cent Y-o-Y growth in PAT for the Nifty50 companies.

 

“After delivering 9.5 per cent growth in Q1 and 8.4 per cent in Q2, Nifty50 is likely to report Y-o-Y PAT growth of 9.8 per cent in Q3,” JM Financial said in a research note.

 

The brokerage expects IT services (12 per cent weight in Nifty50 earnings) to grow 10 per cent Y-o-Y; auto (6 per cent) to rise 33 per cent; metals & mining (5 per cent) to increase 25 per cent; telecom (3 per cent) to surge 64 per cent; and industrials (4 per cent) to jump 31 per cent.

Bullish on consumption

JM Financial said recent measures by the Government of India and the Reserve Bank of India, such as income tax cuts, interest rate reductions, higher banking system liquidity, and GST rate cuts, are likely to support consumption. Taking cognisance of this, the brokerage has rejigged its model portfolio, increasing its overweight exposure to consumer, internet, auto, and hotels & real estate sectors.

Domestic flows remain supportive; FIIs stay net sellers

The brokerage further highlighted that in Q3FY26, domestic institutional investors (DIIs) were net buyers of Indian equities worth $23.6 billion, while foreign institutional investors (FIIs) sold shares worth $1.3 billion, largely due to heavy selling in December 2025.

 

So far in FY26, DIIs have bought equities worth $68.5 billion, while FIIs have been net sellers to the tune of $6.2 billion. FIIs were net buyers in Q1FY26 ($4.6 billion) but turned sellers in Q2 and Q3, offloading shares worth $10.8 billion. DIIs, meanwhile, have remained net buyers in every month of FY26 to date, JM Financial noted.

JM Financial universe

For the JM Financial universe, the brokerage expects PAT to grow 12.3 per cent Y-o-Y in Q3FY26E. Key contributors include oil & gas (16 per cent weight in earnings), expected to grow 13 per cent Y-o-Y; IT services (11 per cent), up 11 per cent; auto (6 per cent), up 33 per cent; metals & mining (4 per cent), up 71 per cent; and industrials (3 per cent), up 26 per cent.

 

“Excluding BFSI, the JM Financial universe is expected to report PAT growth of 17.8 per cent Y-o-Y in Q3FY26E. Excluding BFSI and oil & gas, PAT growth is likely to be 19.3 per cent Y-o-Y,” the brokerage said.  ========= 

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