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* Corporate earnings 1QFY27 – a broad-based beat, with 19 sectors exceeding our expectations: The 1QFY27 corporate earnings season concluded on a strong note, demonstrating widespread outperformance across all key aggregates. The earnings growth and beat were led by Financials, Metals, Oil & Gas (ex-OMCs), and Automobiles as well as sectors such as Chemicals, Textiles, and Real Estate. OMCs expectedly dragged the overall aggregates.

* MOFSL Universe (ex-OMCs) reports better-than-expected earnings growth: For the MOFSL Universe (ex-OMCs), sales/EBITDA/PAT grew 18%/15%/22% YoY (vs. our est. of +15%/+10%/+15%). This growth was fueled by BFSI, Metals, O&G (exOMCs), Technology, and Telecom. In contrast, the primary drags on earnings were OMCs (a loss of INR181b vs. a profit of INR162b), Cement, and InterGlobe Aviation (a loss of INR3.8b vs. a profit of INR21.6b).

* Nifty-50 – PAT growth hits a 10-quarter high: The Nifty delivered an 18% YoY PAT growth (vs. our est. of +10%), led by ONGC, Hindalco, Reliance Industries, JSW Steel, and Bharti Airtel. These five companies contributed 60% to the incremental YoY accretion in earnings. Conversely, InterGlobe Aviation, ITC, Dr Reddy’s Labs, Tata Motors PV, and Cipla dragged Nifty earnings lower.

* Analyzing the caps (ex-OMCs): All categories delivered higher-than-estimated earnings growth. Within our MOFSL Universe, Large-caps (89 companies) posted earnings growth of 21% YoY (in line with the overall universe, vs. our est. of +14% YoY). Our Mid-cap Universe (101 companies) also delivered a healthy performance, with earnings rising 23% YoY (vs. our est. of 17%) – marking an 11-quarter high. Small-caps (186 companies) outperformed significantly, delivering strong earnings growth of 31% YoY (vs. our est. of +22%), supported by a favorable base (vs. a 1% YoY rise in 1QFY26) and driven primarily by Financials and Oil & Gas.

* Beat-miss dynamics: The beat-miss ratio for the MOFSL Universe was favorable, with 48% of the companies exceeding our estimates, while 25% reported a miss at the PAT level. Within the large-cap universe, the ratio was even better, with 57% of the companies exceeding our estimates. Among mid-caps and smallcaps, 39% and 48% of the coverage universe respectively beat our estimates.

* Upgrade-to-downgrade ratio stands at 1.5x: A total of 130/89 companies within the MOFSL Coverage Universe have reported an upgrade/downgrade of more than 3% each, leading to a favorable upgrade-to-downgrade ratio for FY27E.

* Nifty EPS sees a modest upgrade: The Nifty EPS estimate for FY27 was raised by 0.6% to INR1,232, largely owing to Reliance Industries, Hindalco, ONGC, ICICI Bank, and SBI. The FY28E EPS was also raised by 0.3% to INR1,425 (from INR1,422) due to upgrades in SBI, ICICI Bank, Hindalco, Bajaj Finserv, and Bajaj Auto.

* Top ideas:

1) Nifty-50 – Bharti Airtel, ICICI Bank, SBI, Titan Company, M&M, Bharat Electronics, Eternal, Hindalco, Shriram Finance, Interglobe Aviation, and Apollo Hospitals.

2) Non-Nifty-50 – TVS Motor, BSE, GE Vernova T&D, HDFC AMC, Lenskart Solutions, Indian Hotels, Meesho, Dixon Tech, Coforge, Radico Khaitan, Delhivery, Kirloskar Oil Engines, RBL Bank, TBO Tek, and Arvind.

Insightful trends

Metals and Private Financials lead from the front

* Over the past four quarters, Metals and NBFC-Lending have driven incremental PAT significantly. The top-5 sectors now contribute 73% of the MOFSL Universe’s PAT delta in 1QFY27.

* The Metals sector, which was among the bottom 10 contributors a year ago, has now emerged as a top contributor.

* O&G (ex-OMCs), continued to witness significant volatility, driving earnings fluctuations. Notably, the sector (exOMCs) was a top contributor in 1QFY27 vs. a negative contributor in 4QFY26.

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