Q1 FY27 Earnings Preview Who Will Win, Who Will Lose and Why OMCs Will Drag Overall Profits
Kotak Institutional Equities released its Q1 FY27 earnings preview expecting Nifty 50 earnings to grow 9.8% YoY. But there is a crucial catch excluding OMCs profit grows 14.6%. Including OMCs overall profit actually declines 8.7%. One sector oil marketing is single handedly distorting the entire market's earnings picture.
Crude oil price volatility during Q1 hit BPCL, HPCL and IOC with two simultaneous blows marketing losses when retail fuel prices stayed fixed while crude spiked and inventory losses when crude fell sharply after they bought at higher prices. This is the same story we covered multiple times OMCs caught between global crude volatility and government-controlled retail prices.
Capital Goods L&T, Siemens, BEL, CG Power
Strong order books converting to revenue. India's infrastructure and defence spending boom directly flowing into earnings. BEL particularly strong on defence order execution.
Private Banks HDFC Bank, ICICI Bank, Axis Bank
Healthy loan growth, stable asset quality and easing NIM pressure. Kotak prefers frontline private banks over PSU peers.
Telecom Bharti Airtel
Higher ARPU from tariff hikes driving earnings. Fewer customers but each paying significantly more a quality over quantity story.
Metals and Mining
Recovering commodity prices and strong domestic infrastructure demand supporting earnings recovery.
Kotak's Q1 earnings preview taught me that sector selection matters enormously during earnings season the same quarter can deliver 14.6% profit growth excluding OMCs but -8.7% including them, making it essential to analyse earnings expectations sector by sector rather than relying on headline Nifty profit growth numbers before making investment decisions in stocks like