JP Morgan has retained its Nifty 50 target at 27,000, citing a significant improvement in corporate earnings during the first quarter of FY27.
The brokerage said earnings growth was the strongest since June 2024, although it remains more constructive on select domestic cyclical stocks than on the broader Indian market.
According to JP Morgan, companies such as Hitachi Energy, ABB India and NTPC are well placed to benefit from increasing electricity consumption and rising demand from data centres. However, heavyweight stocks including ITC, Dr Reddy’s, Cipla and IndiGo acted as a drag on overall profitability.
Earnings Growth Shows Broad-Based Improvement
MSCI India companies reported a 19% year-on-year increase in revenue and a 16% rise in profit after tax (PAT) during the quarter, excluding oil marketing companies. This marked a notable improvement from the 10% earnings growth recorded in the fourth quarter of FY26. EBITDA margins also expanded by 10 basis points.
The earnings performance was broader than in the previous quarter, with MSCI India companies recording a 58% beat-to-24% miss ratio. IT and financial companies delivered the strongest positive surprises, while communication services and healthcare reported the largest disappointments.
The Nifty 50 recorded 20% revenue growth and 12% PAT growth, with its beat-to-miss ratio standing at 64% to 20%. Earnings strength was also visible beyond large-cap stocks. The Nifty Midcap 100, excluding energy, posted 42% PAT growth, while the Nifty Smallcap 100 reported a 39% increase.
Domestic Demand Remains Key Growth Driver
JP Morgan highlighted resilient domestic demand as a major support for corporate earnings despite geopolitical tensions, trade restrictions and elevated input costs. Materials, utilities, industrials and consumer discretionary companies recorded strong earnings growth.
The brokerage identified power demand, infrastructure and grid spending, defence, automobiles and a volume-led recovery in consumer staples as important areas of structural growth.
Companies have also increasingly focused on profitability rather than pursuing aggressive volume expansion. Management commentary pointed towards disciplined pricing, margin protection and maintaining annual guidance despite external uncertainties.
JP Morgan expects MSCI India earnings to grow 11% in CY26 and another 13% in CY27, providing a relatively strong earnings foundation for Indian equities.
