Nifty Profit Outlook Deteriorates Amid 9% Plunge in FY27 Earnings Estimates

India's Earnings Downgrade Cycle Continues Unabated

India's earnings downgrade cycle shows little sign of easing, with consensus FY27 profit estimates for Nifty 50 companies slashed 9% over the past year. Despite this, analysts continue to pencil in double-digit earnings growth for the next two fiscal years.

According to JM Financial's latest Nifty50 Analyser, the benchmark index has fallen just 4.9% in the 12 months to May 2026, while FY27 earnings-per-share estimates have been cut by 9%. In contrast, FY28 estimates have fared slightly better, rising 1.3% over the same period.

This divergence suggests that while stock prices have largely weathered global volatility, analysts have become materially less optimistic about corporate India's profit trajectory. The downgrades were both widespread and persistent, with FY27 EPS estimates being cut 1.8% in April and another 0.3% in May.

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In May alone, 31 of the 50 Nifty constituents, or 62% of the index, suffered FY27 earnings downgrades, while only 15 companies saw upgrades. This trend was seen across various sectors, with every company in the infrastructure & ports, cement, insurance, utilities, telecom, and industrials segments seeing earnings cuts. Four out of five banks and pharmaceutical companies were also downgraded.

The sharpest reductions in FY27 profit expectations were recorded in infrastructure & ports, followed by pharmaceuticals, telecom, insurance, industrials, cement, and consumer companies. Only metals & mining, NBFCs, and IT services saw net upgrades during the month.

The biggest negative revisions were seen in Larsen & Toubro, Bharti Airtel, UltraTech Cement, SBI Life Insurance, Power Grid Corporation, and Sun Pharmaceutical Industries. In contrast, upgrades were concentrated in a smaller group of stocks, including Trent, Tata Motors, Bharat Electronics, and Tata Consumer Products.

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Despite the downgrade cycle, Bloomberg consensus still expects Nifty EPS to rise 16.2% in FY27 and 15.2% in FY28, implying that analysts continue to expect a meaningful recovery in corporate profits even after a year of estimate reductions. Consensus Nifty FY27 EPS currently stands at 1,235, down from 1,357 a year ago.