Nifty earnings expected to grow 16 pc in FY27: Report

New Delhi, Oct 16 The average earnings from Nifty 50 companies are expected to grow 8 per cent in FY26 and 16 per cent in FY27, driven by policy measures, macro resilience, and a maturing domestic investor base, a report said on Thursday.

As India’s markets enter Samvat 2082, the Motilal Oswal Financial Services Ltd (MOFSL) report said that it is positive on BFSI, capital markets, consumption, manufacturing, and digital sectors.

The broking firm noted policy measures that increased liquidity and demand, such as a 100-basis-point repo cut, a 150-basis-point CRR reduction, Rs 1 lakh crore in income tax relief, GST 2.0 reforms, and reduced inflation, have improved consumer sentiment.

"We believe this marks the beginning of a turnaround in India's domestic growth momentum, with a significant pickup in consumption paving the way for a robust revival in the private capex cycle. This, along with the improving earnings trajectory, should lend support to Indian equities," the report said.

Motilal Oswal said that these tailwinds support a forecast for a shift from single-digit earnings growth to sustainable double-digit growth in the second half of FY26.

"The underlying fundamentals have strengthened – supported by a 7.8 per cent GDP growth in Q1FY26, easing inflation at 1.5 per cent in September 2025 compared to 5.5 per cent in September 2024, and a supportive policy environment that continues to boost investor confidence," it said.

Valuations are reasonable and close to long-term averages at approximately 20 times FY26 earnings. Mid and small caps are trading at a slight premium, indicating a need for selective stock picking, the brokerage said.

Financials are set for earnings recovery in H2FY26, aided by lower borrowing costs, improving NIMs, and steady deposits, the brokerage firm said.

Capex revival and policy reforms should drive multiyear growth for the manufacturing sector, positioning India as a key global manufacturing hub, the report noted.

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