By Bharath Rajeswaran<\/p>\n
Feb 17 (Reuters) – Indian equities may be nearing a turning point in earnings growth and market performance as profits stabilise, valuations ease and trade talks with the United \u200cStates and European Union advance, four brokerages said after the country’s largest listed companies reported \u200cDecember-quarter results.<\/p>\n
India’s benchmark Nifty 50 and BSE Sensex have risen about 9% and 7% since the start of 2025, lagging Asian and \u200bbroader emerging-market peers amid muted earnings momentum, elevated valuations, global trade uncertainty, record foreign outflows and weakness in IT stocks.<\/p>\n
However, for the third quarter ended Dec. 31, Nifty 50 companies posted a 7.5% year-on-year profit growth, up from 1.9% in the previous quarter.<\/p>\n
Growth was broader across the market, with BSE 500 companies reporting 16% profit expansion, \u200cled by energy and consumer discretionary \u2060companies. Information technology stocks lagged.<\/p>\n
Even so, Nifty profit-after-tax growth stayed in single digits for a seventh straight quarter. Analysts led by Seshadri Sen at Emkay Global said headline \u2060earnings growth would have been closer to 14% after adjusting for the labour-code impact.<\/p>\n
The new codes mandate basic salaries account for at least 50% of cost-to-company, increasing gratuity liabilities. Emkay estimated a roughly 5% hit to aggregate December-quarter \u200bprofit after \u200btax.<\/p>\n
Brokerages flagged early signs of a recovery in consumption \u200band said an interim framework for an India-U.S. \u200cdeal could mark a turning point for markets.<\/p>\n
Valuations have moderated after underperformance, while supportive fiscal and monetary policy, signs of consumption revival and progress in trade talks with the European Union and the U.S. have improved the forward earnings outlook, analysts said.<\/p>\n
“Strong festive and rural demand, a stable interest-rate environment, a pickup in credit growth and lower input costs drove a broad-based earnings recovery,” said J.P. Morgan analysts Rajiv Batra and \u200cRushi Mehta, adding that mid-caps and small-caps posted earnings growth \u200bof 12% and 21%, respectively, in the third quarter.<\/p>\n
Motilal Oswal said \u200bfive Nifty 50 stocks, State Bank of \u200bIndia, Tata Steel, HDFC Bank, Tata Consultancy Services and Bharti Airtel, accounted for 78% \u200cof incremental earnings growth.<\/p>\n
Against stabilising profits, the brokerage \u200bsaid markets were better positioned \u200bfor improved performance in 2026, with the U.S. and EU trade deals seen as key catalysts.<\/p>\n
J.P. Morgan and Motilal Oswal cautioned that AI-led disruption in IT services and spillover risks to other \u200bsectors remained a key overhang, heightening \u200cjob-security concerns in urban areas.<\/p>\n","protected":false},"excerpt":{"rendered":"By Bharath Rajeswaran Feb 17 (Reuters) – Indian equities may be nearing a turning point in earnings growth…\n","protected":false},"author":2,"featured_media":295323,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[114,4776,142476,1685,85,207,48693,46,149691,149692,7531],"class_list":["post-295322","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-business","tag-earnings-growth","tag-earnings-momentum","tag-european-union","tag-il","tag-india","tag-information-technology-stocks","tag-israel","tag-listed-companies","tag-market-performance","tag-trade-talks"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/295322","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=295322"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/295322\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/295323"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=295322"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=295322"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=295322"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}