1QFY27 Preview: Concentrated growth

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1QFY27 Preview: Concentrated growth

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Equity Strategy - India

Equity Strategy

1QFY27: Better headline, weaker breadth 09 July 2026

We expect Nifty earnings to grow 6% YoY in 1QFY27, a better headline than feared, but Equity Strategy

the quality of growth remains narrow. The earnings growth is likely to be driven largely India

by Financials, IT and Metals & Mining, while several domestic cyclicals and consumption- Amish Shah, CFA >>

linked sectors remain under pressure. Sector dispersion is sharp: Materials (+45% YoY), Research Analyst

Metals & Mining (+31%), IT (+12%), Healthcare (+10%) and Industrials (+9%) are BofASshah.amish@bofa.comIndia

expected to lead, while Discretionary (-6% YoY), Staples (-5%), Energy (-4%), Cement Udit Dhekale >>

(-3%) and Autos (-2%) likely drag. This makes 1QFY27 less a broad-based recovery and Research Analyst

more a quarter of concentrated earnings support. BofASudit.dhekale@bofa.comIndia

Contribution split: three sectors carry the index ManyaResearchKakkarAnalyst>>

The earnings build-up is highly skewed. Financials alone add 3.6% to Nifty earnings BofAS India manya.kakkar@bofa.com

growth (dragged by SBI), followed by IT at 1.1% and Metals & Mining at 0.8%.

Rithik Dhiman >>

Industrials add a modest 0.3%, while Healthcare and Utilities provide small positive Research Analyst

support. In contrast, Staples, Autos, Discretionary and Energy each likely to drag BofAS India rithik.dhiman@bofa.com

modestly, reflecting either demand softness, cost pressure or weaker margins. This See Team Page for List of Analysts

uneven contribution mix is important: despite 6% headline earnings growth, the quarter

does not signal clean earnings upcycle across the market.

Commodity tailwind for few, cost pressure for many