Stock market today: The disconnect between the Nifty 50’s market performance and its earnings outlook is widening, as the EPS cuts in April accelerated further compared to March and February, signaling growing concerns about the earnings outlook for the current fiscal year.
According to domestic brokerage firm JM Financial, in the last 12 months, from April 2024 to April 2025, the Nifty50 has risen by 7.7%, while FY25E and FY26E EPS were cut by 5.1% and 6.8%, respectively.
In April 2025, EPS estimates for FY25E saw an increase of 0.3%, while FY26 and 27E estimates were cut by 1.1% and 1.0%. The brokerage noted that the rise in estimates for FY25 could be attributed to muted analyst expectations for Nifty’s 4QFY25 PAT going into the result season.
However, the EPS downgrade cycle continues, with FY26E and FY27E cuts being sharper than those in February 2025 of 0.9% and 0.6% and March 2025 of 0.2% and 0.6%.
70% of Nifty50 companies saw EPS cuts on April 25
JM Financial stated that in April 2025, 35 out of the 50 Nifty companies, or 70% of the index constituents, saw cuts in their FY26E estimates.
The highest downgrades were observed in banks, with 4 out of 6 companies experiencing EPS cuts, followed by IT services, where all companies saw cuts in their estimates. Consumer sector companies also faced downgrades, with all 8 companies in the Nifty50 seeing cuts, while 4 out of 6 companies in the automobile sector experienced reductions in their estimates.
On the other hand, 12 Nifty 50 companies, or 24% of the index, saw upgrades in their FY26E EPS estimates, with notable upgrades in the automobile, banks, NBFCs, and pharmaceuticals sectors.
The brokerage noted that sectors witnessing more than 1% cuts in FY26E EPS on a month-over-month basis include IT Services (down 4.5%), Consumer (down 2.5%), Automobiles (down 2.1%), and Metals & Mining (down 1.3%). In contrast, EPS upgrades were seen in NBFCs (up 1%), telecom (up 0.8%), and oil & gas (up 0.3%).
Regarding individual stocks, the largest EPS cuts were observed in Eternal, IndusInd Bank, Infosys, TCS, and Maruti Suzuki, while the biggest EPS upgrades were seen in Kotak Mahindra Bank, SBI Life, Jio Financial, Reliance Industries, and ICICI Bank, as per JM Financial.
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