Nifty 50 Earnings Revision Indicator Turns Negative Again, Says NSE Report

The Earnings Revision Indicator (ERI) for the Nifty 50 has slipped back into negative territory, signalling that downward revisions to earnings estimates are currently exceeding upward revisions, according to the Nifty Corporate Performance Review released by the National Stock Exchange (NSE).

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The ERI does this by determining the number of companies in the index that are upgraded versus those downgraded in terms of earnings per share (EPS) estimates and expresses it as a net percentage. If the result is positive, it implies that more companies are being upgraded compared to those being downgraded, and vice versa if the result is negative.

The NSE report indicates that the market indicator had been in negative territory for most of 2024 and June 2025, although it improved over time. After briefly registering positive numbers, the ERI went into contraction territory, indicating that the number of downgrades is higher compared to upgrades, although not as high as in the past.
Corporate Earnings Performance In Q3FY26

Despite the shift in the earnings revision indicator, financial performance among Nifty companies remained stable during the December quarter.

According to NSE data, Nifty 50 net sales excluding Tata Motors increased 12.5% year-on-year during Q3FY26, marking the highest growth in 11 quarters. Sequential revenue growth was at 6.8%.

The broader Nifty 500 index has also seen revenue growth, with total sales growing by 11.1% over the last year. Mid-cap and small-cap companies have contributed to this revenue growth, with many companies reporting double-digit revenue growth. The operating performance has been steady.

Non-financial companies within the Nifty 50 reported EBITDA growth of 11.3% year-on-year. In comparison, companies in the Nifty 500 excluding Nifty 50 reported EBITDA growth of 16.5%, led mainly by gains in the energy sector.

Profit growth also strengthened during the period. Aggregate profit after tax (PAT) for the Nifty 50 increased 12.8% year-on-year and 10.6% quarter-on-quarter. According to the NSE report, the materials, financial services, and consumer discretionary sectors also played a major role in this growth.

Earnings Trends Beyond The Nifty 50

The earnings of companies other than the Nifty 50 also saw strong growth. The profit after tax for companies other than the Nifty 50 grew by 24.5% year-on-year in Q3FY26, with the energy and finance sectors contributing to the growth.

The revenue for Nifty 50 companies for the first nine months of FY26 grew by 8.8% year-on-year, marking a three-year high. Similarly, for the first nine months of FY26, revenues for Nifty 500 companies other than Nifty 50 grew by 7.4% year-on-year.

Adjusted profit after tax for the Nifty 50 grew 12.3% year-on-year during the nine-month period, with margins rising to 12.6%. Companies outside the top 50 reported profit growth of 21.8% year-on-year, while margins improved to 8.9%.

Earnings Outlook Indicators

According to the NSE report, consensus earnings forecasts compiled by LSEG Workspace show that projections for FY26 earnings among the top 200 companies were marginally reduced by 0.1% since the end of December. However, the earnings estimates for FY27 have increased by 0.7%, primarily due to the increase in the materials and financial sectors.

The projected earnings growth as of February 27, 2026, is 12% in FY26 and 15.7% in FY27. The projected CAGR is estimated to be 13.9% between FY25 and FY27.

The NSE report indicated that although the earnings performance is stable, the movement of the ERI to negative territory suggests that analyst sentiment has slightly weakened over the recent months, even as overall corporate profitability continues to show steady growth.