Nifty FY27 Earnings Estimates Trimmed 9% Despite Persistent Downgrade Trend

There has been a marked weakening in profit estimates for the firms listed on Nifty 50 with consensus EPS forecasts for FY27 having been trimmed by 9% even though the index itself witnessed a limited fall over the past year.

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As per the latest Nifty50 Analyser by JM Financial, FY27 consensus EPS forecasts have come down from 1,357 a year ago to 1,235. In the year ending May 2026, the Nifty 50 fell by 4.9% signaling that earnings expectations were being trimmed at a sharper pace than stock prices.

Despite significant cuts in FY27 estimates, there has been little change in estimates for FY28 which have risen by just 1.3% over the year.

Downgrades Continue After Earnings Season

The revision cycle remained negative even after the bulk of corporate earnings announcements for the quarter.
FY27 EPS projections were reduced by 1.8% in April and a further 0.3% in May. Estimates for FY28 also moved lower, declining 1.4% in April and another 0.1% in May.

During May alone, earnings forecasts were downgraded for 31 companies within the Nifty 50 index, representing 62% of its constituents. Only 15 companies received upgrades during the month.

The breadth of revisions reflected pressure across multiple industries. All companies within the infrastructure and ports, cement, insurance, utilities, telecom and industrial segments recorded earnings cuts. Four out of five banking and pharmaceutical companies also witnessed downward revisions.

Sector-Wise Revisions

The industries that suffered the greatest earnings revision downwards were the infrastructure/ports industry, which experienced an earnings downgrade of 4.9% MoM in FY27. Pharmaceutical companies had a slight decline at 3.8%, while telecommunications companies experienced a decline of 3%.

Earnings forecasts for insurance companies declined 2.5%, industrial firms saw a 2.2% downgrade, and cement companies registered a 2.1% cut. Consumer-oriented businesses also faced downward revisions of 1.9%.
In contrast, metals and mining, non-banking financial companies and information technology services were the only sectors to witness net upgrades during the month.

Among individual stocks, some of the largest downward revisions were seen in Larsen & Toubro, Bharti Airtel, UltraTech Cement, SBI Life Insurance, Power Grid Corporation and Sun Pharmaceutical Industries. Upgrades were concentrated in a smaller set of companies, including Trent, Tata Motors, Bharat Electronics and Tata Consumer Products.

Growth Expectations Remain Intact

Despite a year of estimate reductions, consensus forecasts continue to indicate double-digit earnings growth over the next two financial years.

Based on the Bloomberg Consensus estimates provided in the report, growth in Nifty EPS is expected to rise by 16.2% in FY27 and 15.2% in FY28. Nonetheless, given the ongoing trend of profit estimate downgrades, it seems as though profit expectations are being revised in light of difficult demand and sector-specific issues.
The focus for investors would certainly be on revisions to profit estimates and, more specifically, on whether the expected growth can be achieved.