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In 1QFY26, Nifty50 EPS grew 9.5% YoY (vs. expectation of +10.3% YoY). Ex-financials, Nifty EPS grew 14% YoY (vs. expectation of +14.2% YoY). Following the 1QFY26 results, our Nifty50 EPS for FY26E and FY27E has been cut by 1.3% and 0.7% respectively. Consequently, our Nifty50 EPS growth for FY26E now stands at 9.3% (vs. 11.1% earlier), and for FY27E it stands at 15.6% (14.4% earlier) and the ask rate for the balance 9 months of FY26 stands at 9.3%. In FY26, sectors that are expected to do the heavy lifting are: Oil & Gas, Metals and Mining, Consumer, Telecom and Infrastructure. Further, as we split 1QFY26 performance in terms of market capitalisation, we see that the proportion of misses in small caps was the largest, followed by large caps and midcaps; 43% of small-cap companies missed expectations, while the misses were relatively lower in midcaps and large caps at 28% and 29% respectively.

* 1QFY26 Nifty50 EPS growth at 9.5% YoY: In 1QFY26, Nifty50 EPS grew 9.5% YoY (vs. expectation of +10.3% YoY). Ex-financials, Nifty EPS grew 14% YoY (vs. expectation of +14.2% YoY). On a YoY basis, amongst key sectors, (1) Automobiles declined 1.8%, (2) Utilities declined 6%, and (3) Consumer declined 1%. Further, on a YoY basis, sectors that saw the highest YoY EPS growth were: (1) Oil and Gas (+54.7%), (2) Consumer Retail (+41.7%), (3) Telecom (+37.5%), (4) Cement (+31.8%), (5) Infrastructure (+29.8%) and (6) Industrials (+24.9%).

* Sectoral beats and misses amongst the Nifty50: As we compare beats and misses vs. estimates, oil and gas, automobiles, metals & mining, consumer retail and industrials stood out with a beat of 36.7%, 14.9%, 13.3%, 11.9% and 11.4% respectively vs. estimates, while Internet at -68.2%, Telecom at -53.9%, Infrastructure at -43.5%, Cement at -18.2% and Pharmaceuticals at -6.5% were key misses.

* EPS estimates cut for FY26E and FY27E: Following the 1QFY26 results, our Nifty50 EPS for FY26E and FY27E have been cut by 1.3% and 0.7% respectively. Consequently, our Nifty50 EPS growth for FY26E now stands at 9.3% (vs. 11.1% earlier), and for FY27E it stands at 15.6% (14.4% earlier). With this, the ask rate for the balance 9 months of FY26 stands at 9.3%.

* Which sectors have to do the heavy lifting in FY26E? We forecast a 9.3% Nifty50 EPS growth in FY26. Sectors that are expected to do the heavy lifting are: Oil & Gas (+22% YoY growth, and 11.2% weight in Nifty50 PAT); Metals and Mining (+42% YoY growth and 5.1% weight in Nifty50 PAT); Consumer (+13% YoY and 5.8% weight in Nifty50 PAT); Telecom (+85% YoY growth and 3.0% weight in Nifty50 PAT); and Infrastructure (+24% YoY growth and 4.0% weight in Nifty50 PAT)

* JMFL coverage universe EPS grows 9.5% YoY in 4QFY25: The JM Financial coverage universe 1QFY26 EPS grew 11.2% YoY. Sectors that saw the highest YoY EPS growth were: (1) Hotels (+66% YoY), (2) Oil and Gas (+53% YoY), (3) Cement (+48% YoY) and (4) EMS (+42% YoY). Sectors that saw the weakest YoY EPS performance included: (1) Consumer Durables (-34% YoY), (2) Building Materials (-26% YoY), and (3) Auto Ancillaries (-17% YoY). Compared to estimates, the largest beats were seen in Hotels, followed by Textiles and Automobiles. Among the misses, Telecom and Building Materials led the pack.

Small caps had higher share of misses: Out of the 50 companies in the Nifty50, 26% of them missed estimates in 1Q while 32% beat estimates and the rest reported an in-line quarter. Further, as we split 1QFY26 performance in terms of market capitalisation, we see that the proportion of misses in small caps was the largest, followed by large caps and then lastly, midcaps; 43% of small-cap companies missed expectations, while the misses were relatively lower in midcaps and large caps at 28% and 29% respectively

1QFY26 Nifty50 EPS growth at 9.5% YoY

* In 1QFY26, Nifty50 EPS grew 9.5% YoY (vs. expectation of +10.3% YoY). Ex-financials, EPS grew 14% YoY (vs. expectation of +14.2% YoY). Ex Financials and Oil & Gas, EPS grew 5.2% YoY (expectation of +13.3% YoY).

* On a YoY basis, amongst key sectors, (1) Automobiles declined 1.8%, (2) Utilities declined 6%, and (3) Consumer declined 1%.

* Further, on a YoY basis, sectors that saw the highest YoY EPS growth were: (1) Oil and Gas (+54.7%), (2) Consumer Retail (+41.7%), (3) Telecom (+37.5%), (4) Cement (+31.8%), (5) Infrastructure (+29.8%) and (6) Industrials (+24.9%).

* As we compare beats and misses vs. estimates, oil and gas, automobiles, metals & mining, consumer retail and industrials stood out with a beat of 36.7%, 14.9%, 13.3%, 11.9% and 11.4% respectively, while Internet at -68.2%, Telecom at -53.9%, Infrastructure at -43.5%, Cement at -18.2% and Pharmaceuticals at -6.5% were key misses.

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