India Equity Strategy 4QFY26 Earnings Dissector – Better-than-expected-prints; upgrade Industrials to OW

Research evidence excerpt

India Equity Strategy 4QFY26 Earnings Dissector – Better-than-expected-prints; upgrade Industrials to OW

Rajiv Batra AC Global Markets Strategy

(65) 6882-8151 18 May 2026 J P M O R G A N

rajiv.j.batra@jpmorgan.com

while defense is underpinned by policy support, localization/tech transfer and rising

capex with key order catalysts ahead. 4Q commentary points to resilient domestic

demand offsetting global uncertainty, multiyear AI/DC spending, and operating

leverage/mix supporting margins. See pages 5-8 for more details.

• Over the past month, MSCI India’s consensus earnings expectations for 2026/27

were revised down by 1.5% and 0.9% respectively (Table 1EPSrevisionsbysector–MSCIIndia). For FY27, OFSS, ONGC

and BSE had >10% upward earnings revisions whereas Ambuja Cements, IOCL and

GMR Airports had EPS revisions of <-15% (Table 3EPSrevisionsbystocks–MSCIIndia). Overall, for CY26 consensus

earnings estimates over the past month, Materials and IT had the most positive earnings

revisions while Industrials and Discretionary (including Autos) had the most negative

earnings revisions. MSCI India consensus earnings growth estimates for CY26/27

are 15.8%/15.7% respectively.

• FY27 earnings at risk. The cyclical recovery that had gained traction towards late 2025

(aided by policy measures) began to lose momentum even before the oil price shock.

Whenever the conflict is officially over and the Strait of Hormuz opens, the backlog of

vessels, combined with the need for ships to navigate alternative routes, suggests that a

normalization of energy flows may take three to four months. Earnings in 1QFY27

(potentially 2QFY27 if disruption prolonged) are likely to face pressure from higher input

prices and currency depreciation. These challenges will manifest across sectors in