The last two quarters have seen a significant turnaround in corporate earnings across the Indian market, according to Morgan Stanley's recent analysis. Despite previous concerns and weaker performances, the latest earnings season has brought positive surprises, with most companies delivering results above expectations.

Morgan Stanley notes that nearly two-thirds of companies reporting their quarterly results have posted earnings that exceeded analysts’ estimates. Revenue growth has been healthy, coming in at around 5% for this group. EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) has risen by 8%, reflecting strong operational performance. The average EBITDA margin across Nifty 50, small-cap, and broader market companies has been approximately 21%.

Focusing on the Nifty 50, the report highlights that around 35of its constituent companies reported 6% revenue growth, with profit after tax (PAT) rising by 0.5%. Meanwhile, the mid-cap and small-cap segments also performed well, recording around 6.5% revenue growth. Their margins expanded by about 60 basis points, indicating stronger profitability So Far.

Sector-wise, standout performers include Communication Services, Healthcare, and Industrials, all of which showed robust earnings growth. On the other hand, Consumer Discretionary and Materials sectors experienced slight pressure, with some decline in profitability.

Overall, the earnings trend has been encouraging. Both Nifty companies and those in the broader market have demonstrated resilience and recovery, with results consistently outperforming projections. 

Disclaimer:

The content of this article is for informational purposes only and is based on reports and market analysis, including those by Morgan Stanley. It should not be considered as financial advice or a recommendation to buy or sell any financial instruments.