ITC, Axis Bank to Trent: 17 Nifty 50 companies see over 3% downgrades in FY26 EPS post Q3 results 2025. Do you own?

The Q3 earnings season for India Inc. has come to a close, and the results have been underwhelming. The earnings upgrade-to-downgrade ratio stood at 0.3x, hitting its worst level since Q1 of FY21, shows a study by Motilal Oswal Financial Services (MOSL).

“The beat-miss ratio for the MOFSL Universe was unfavourable, with 44% of the companies missing our estimates. For the MOFSL Universe, the earnings upgrade-to-downgrade ratio has turned weaker for FY26E, as 37 companies’ earnings have been upgraded by more than 3%, while 137 companies’ earnings have been downgraded by more than 3%,” MOSL said, raising concerns about the underlying health of the economy.

The earnings slowdown has coincided with the stock market correction, with the Indian equity benchmarks declining 13% from their all-time high levels. The fall in the broader market has been worse, with small-caps experiencing an earnings decline of 24% YoY vs MOSL’s estimates of 5%.

Nifty 50 Earnings Overview

The Nifty 50 pack of stocks witnessed a 5% YoY PAT growth, its third successive quarter of single-digit rise since the pandemic.

Against this backdrop, MOSL cut the Nifty earnings per share (EPS) estimate for FY26 by 1.4% to ₹1,203, largely owing to ONGC, HDFC Bank, JSW Steel, Axis Bank, and SBI. Overall 17 companies from the Nifty 50 universe witnessed an over 3% EPS downgrade for FY26.

JSW Steel, followed by three Tata Group companies – Tata Consumer, Tata Steel and Trent – witnessed the highest EPS downgrades.

Following a 70% YoY drop in JSW Steel’s Q3 PAT, MOSL slashed its EPS estimates by 9.5% to ₹61.7. Meanwhile, it cut Tata Consumer, Tata Steel and Trent’s EPS estimates by 6.5%, 5.9% and 5.5%, respectively.

Earnings per share is an important metric for stock market investors because it helps determine a company’s profitability and potential for future growth.

SBI Life Insurance, Dr. Reddy’s Labs, Axis Bank, ITC, ONGC, Bharat Electronics, Asian Paints, UltraTech Cement, Apollo Hospitals and Nestle saw EPS cuts ranging from 4-5.1%.

Meanwhile, Hindustan Unilever and Grasim Industries’ EPS were slashed by 2.4% each and HDFC Bank’s by 3.5% by MOSL.

On the flip side, Bharti Airtel (9.2%), Hindalco (4.2%), TataMotors (4.1%), Kotak Mahindra Bank (3.6%), and Maruti (3.5%) saw the highest earnings upgrades in the Nifty 50 pack.

Outlook

Going ahead the MOFSL Universe is likely to deliver sales/EBITDA/PAT growth of 7%/15%/19% YoY in FY26, said the brokerage. It expects financials, oil & gas, and metals to be the key growth engines, with 13%, 24%, and 37% YoY earnings growth, respectively. However, we foresee downside risks to our earnings estimates for FY26E/27E, it added.

Disclaimer: The views and recommendations above are those of individual analysts or broking companies, not Mint. We advise investors to check with certified experts before making any investment decisions.