Indian Companies Post Strongest Earnings Growth in Eight Quarters in 3QFY26: Motilal Oswal Report

Indian Companies Post Strongest Earnings Growth in Eight Quarters in 3QFY26: Motilal Oswal Report​

Mumbai, February 22: Indian companies have delivered their strongest earnings performance in the past eight quarters during the third quarter of fiscal year 2026, supported by broad-based sectoral momentum and improving demand conditions, according to a report by Motilal Oswal Financial Services.

Nifty 500 Earnings Surge 19 Percent Year-on-Year​

The report, based on data compiled from the Nifty 500 universe, showed that aggregate earnings rose 19 percent year-on-year in 3QFY26.

Excluding financial stocks, earnings growth was even stronger at 23 percent. When metal and oil and gas companies were removed from the calculation, aggregate earnings still expanded by 15 percent, indicating resilience and strength across a wide range of sectors.

Sales Growth Hits 11-Quarter High​

Revenue growth also gathered pace during the quarter. Aggregate sales of Nifty 500 companies increased 11 percent year-on-year, marking the highest growth recorded in the last 11 quarters.

Total sales during the quarter stood at around Rs 36 lakh crore. EBITDA reached approximately Rs 8 lakh crore, while adjusted profit after tax was reported at nearly Rs 4 lakh crore.

Commodities Lead Earnings Momentum​

Commodity-linked sectors emerged as key drivers of growth in 3QFY26.

The oil and gas sector reported a 38 percent rise in profits, while metal companies registered a 34 percent increase, aided by a lower base.

Public sector banks posted 18 percent growth in earnings. Non-banking financial companies focused on lending reported a 19 percent increase in profits during the quarter.

Auto, Capital Goods and Cement Show Strong Recovery​

The automobile sector, excluding tractors and passenger vehicles, recorded 27 percent profit growth. The expansion was supported by festive demand and the impact of GST rate cuts.

Capital goods companies delivered 24 percent earnings growth, backed by robust order inflows and continued government spending in power transmission, defence, and renewable energy.

The cement sector staged a notable comeback, posting 46 percent growth in profits after several weak quarters. Demand recovery of around 7 to 8 percent supported the improvement.

Meanwhile, the telecom sector more than doubled its profits to Rs 31 billion during the quarter.

Mid and Small Caps Outperform Large Caps​

Broader markets outperformed large-cap peers in 3QFY26.

Earnings of companies in the Nifty Midcap 150 rose 20 percent year-on-year, while those in the Nifty Smallcap 250 recorded 26 percent growth on a lower base.

In comparison, earnings of the Nifty 100 increased by 18 percent.

The broad-based improvement across sectors and market capitalisation segments signals a firm earnings recovery in the third quarter of FY26, marking the strongest performance in two years.