India’s corporate earnings downgrade cycle appears to be moderating, although profit expectations remain under pressure. Consensus FY27 earnings estimates for Nifty 50 companies have been cut by 9% over the past year, according to a report by JM Financial.
The Nifty 50 index has declined only 4.9% in the 12 months through May 2026, even as FY27 earnings-per-share (EPS) estimates have witnessed a steeper downgrade of 9%. In contrast, FY28 estimated EPS has seen a modest upgrade of 1.3%, signalling early signs of stabilisation in earnings expectations.
However, the earnings downgrade cycle remains both broad-based and persistent. After FY27 EPS estimates were revised downward by 1.8% in April, analysts lowered them by another 0.3% in May. Similarly, FY28 estimates were cut by 1.4% in April and an additional 0.1% in May, suggesting that expectations continue to be reset lower despite the earnings season being largely behind.
Widespread EPS cuts across Nifty 50 companies
In May 2026, 31 Nifty 50 companies — representing 62% of the index constituents — witnessed downgrades to their FY27 EPS estimates, while only 15 companies saw upgrades, JM Financial report said.
Sector-wise, earnings downgrades were widespread. All companies in infrastructure & ports, cement, insurance, utilities, telecom, and industrials registered cuts in earnings estimates. Meanwhile, four out of five banks and pharmaceutical companies also faced downgrades. Consumer and automobile sectors were not spared either, with five out of eight consumer companies and three out of five auto companies witnessing EPS cuts.
On the other hand, metals and mining emerged as a relative outperformer, with three out of four companies in the sector receiving earnings upgrades.
Sectors witnessing the sharpest earnings cuts
The sharpest month-on-month cuts to FY27 EPS estimates in May were witnessed across infrastructure & ports, pharmaceuticals, telecom, insurance, industrials, cement, and consumer sectors.
Infrastructure & ports saw the steepest downgrade at 4.9%, followed by pharmaceuticals at 3.8% and telecom at 3.0%. Insurance and industrials sectors recorded earnings cuts of 2.5% and 2.2%, respectively, while cement and consumer sectors witnessed downgrades of 2.1% and 1.9%.
On the other hand, select sectors saw upgrades to FY27 earnings estimates, led by metals & mining with a 6.3% increase, followed by NBFCs at 0.7% and IT at 0.2%.
Nifty 50 companies with the biggest EPS revisions
Among individual companies, the sharpest EPS downgrades in May 2026 were seen in Cipla, Dr. Reddy’s Laboratories, Adani Enterprises, Larsen & Toubro, and Adani Ports & SEZ.
In contrast, the highest earnings upgrades were recorded for Hindalco Industries, ONGC, InterGlobe Aviation, Tata Steel, and Bajaj Auto.
The JM Financial report also noted that while FY27 earnings estimates for Nifty 50 companies have been cut by 9% over the past year, FY28 earnings forecasts have seen only a modest 1.3% upgrade.
