Domestic brokerage firm Motilal Oswal expects stocks under its coverage to clock “an impressive PAT growth of 16% YoY – the highest in the past eight quarters,” while Nuvama warns that “Q3FY26E earnings are likely to stay soft—a continuation of the previous six quarters” with profit growth of just 5% YoY. The split reflects mounting uncertainty over whether financials, autos, and industrials can offset weakness in export-facing sectors as India navigates slowing global trade and trade-deal uncertainties with the US.
Emkay Global sees a definitive pickup in earnings and turnaround in Q3FY26E breaking the last 6-quarter consolidation, projecting 14.5% PAT growth driven by festive season demand and GST rate-cut tailwinds. The firm expects the BSE500 to register 14% PAT growth versus 8.5% for the Nifty, signaling broader market strength.
On the other hand, JM Financial forecasts Nifty Q3 PAT growth of 9.8% YoY, up from 8.4% in Q2, with telecom surging 64% YoY, autos accelerating 33%, and industrials jumping 31%. “After delivering 9.5% growth in Q1 and 8.4% in Q2, Nifty50 would deliver YoY PAT growth of 9.8% in Q3,” the brokerage said.
Motilal Oswal expects 20 sectors/segments to post growth in double digits, marking the completion of the full circle of earnings recovery since it first started to weaken in Q1. The firm sees telecom profits jumping 2.6x, cement surging 66%, real estate up 64%, and capital goods rising 24%.
But Nuvama strikes a cautious note: “Overall, an earnings recovery is still elusive. Nifty EPS is likely to be flat YoY, posing downgrade risks to consensus estimates of mid-teens profit growth in H2FY26/FY27.” The brokerage warns that “slowing global trade and margin compression pose risks to earnings recovery.”
Financials to Anchor the Quarter
A rare point of consensus: financials will be the quarter’s anchor. Axis Securities expects banks under its coverage to deliver approximately 12.4% YoY credit growth, “in line with industry growth,” with “management optimism around growth continuing and improving further” dominating Q3 discussions. The firm sees “steady NIM trends, with margins finding support from the CRR cut and TD repricing” and asset quality “turning favourable gradually, especially in the unsecured portfolios.”
Motilal Oswal forecasts financials led by NBFC-Lending to grow 26% YoY, though it cautions that “both Private Banks (4%) and PSBs (3%) are likely to contribute moderately to earnings.”
Bernstein continues its “overweight on financials, Telecom and select picks in consumption sectors (discretionary),” while introducing real estate as an overweight. “IT and real estate were the worst performers in 2025,” the firm noted.
Autos Revving Up on GST Cuts
The auto sector is expected to deliver one of the quarter’s standout performances. Axis Securities says “the auto sector is expected to report a healthy earnings trajectory in Q3, supported by the GST rate cut, stable commodity inflation, and favourable regulatory norms.”
Motilal Oswal forecasts automobiles growing 25% YoY, with the quarter having “the full-blown effect of the GST2.0 cuts that were implemented on 22nd Sep’25.”
Export Sectors Under Pressure
Export-oriented sectors face headwinds. Axis Securities flags “cautious client spending, pricing pressures and regulatory challenges as key risks” for IT services, pharmaceuticals and chemicals. The firm warns that “certain pockets of the pharmaceutical sector could face pressure due to pricing challenges, regulatory issues, and a high base in specific markets.”
Nuvama expects “profits are likely to be weak in Exporters (chemicals, auto, pharma), FMCG, EMS, but strong in industrials, domestic auto, metals, durables.”
Emkay warns that “export-oriented sectors remain cautious amid the ongoing trade-deal uncertainties,” though it sees recovery driven by “consumption recovery in H2CY26, led by a material improvement in retail credit flow and pick up in discretionary demand.”
Stock Picks
Axis Securities: IDFC First Bank, Shriram Finance, Bajaj Auto, Sansera Engineering, UltraTech Cement, Navin Fluorine, Coforge, Biocon, Astral, Kalpataru Projects International
JM Financial: Bharti Airtel, ICICI Bank, Maruti Suzuki, Titan, UltraTech, Adani Ports, Polycab, BHEL, Marico, ICICI Prudential Life, Aditya Birla Capital, Lloyds Metals, Godrej Properties, Radico Khaitan, AIA Engineering, Delhivery, Navin Fluorine, Gujarat Gas, Nuvama Wealth, Sagility, Sai Life Sciences, Kalpataru Projects, Century Plyboards, Syrma SGS, Leela (Indian Hotels), PVR Inox, Balrampur Chini, SJS Enterprises.
Motilal Oswal: SBI, Titan, M&M, Infosys, Eternal, Dixon Technologies, Indian Hotels, Groww, TVS Motors, Radico Khaitan
BNP Paribas: Maruti, M&M, Infosys, Britannia, Swiggy, Doms, Titan, Amber Enterprises, JK Cement, Reliance Industries, Bharti Airtel, HDFC Bank, ICICI Bank, Axis Bank, SBI Life Insurance, Aster DM Healthcare, Aurobindo Pharma
Emkay: Lenskart, Eternal, Tata Motors CV, Shriram Pistons and Rings, IDFC First Bank
CLSA: ICICI Bank, SBI, Infosys, ITC, UltraTech, NTPC, ONGC, Eternal, Bajaj Auto, DMart, Tech Mahindra, Tata Motors PV, IndusInd Bank, Godrej Properties
Morgan Stanley: Maruti Suzuki, Trent, Titan, Varun Beverages, Reliance Industries, Bajaj Finance, ICICI Bank, Indigo, L&T, UltraTech
As earnings season unfolds, the market will be watching whether the optimists or pessimists prove correct and whether corporate India can finally deliver the sustained recovery that has proven elusive for the past six quarters.
(Disclaimer: The recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times.)