India Inc. delivers strongest earnings in 10 quarters; markets stay in the red

India’s corporate earnings just posted their best quarter in two-and-a-half years, according to the latest India Strategy report by Motilal Oswal Financial Services Ltd., yet the stock market stayed in red. Weighed down by surging crude oil prices, geopolitical jitters, and a weakening rupee, Indian benchmark indices extended their losing streak to a fifth straight session on Monday, even as the Q1FY27 earnings season wrapped up with results well ahead of estimates.

The Nifty 50 settled at 24,287.65, down 78.35 points or 0.32 per cent, while the Sensex slipped 0.36 per cent to close at 77,728.16. The index touched an intraday low of 24,226.95 before recovering partially in afternoon trade. Notably, Nifty closed below its 20-day simple moving average for the first time in a while, a development analysts flagged as a negative technical signal.

“Elevated crude prices and geopolitical uncertainty warrant near-term caution, while resilient earnings and strong domestic structural themes continue to support the medium-term outlook,” said Siddhartha Khemka, Head of Research, Wealth Management at Motilal Oswal Financial Services.

The session’s sectoral story was sharply divided. Nifty Realty gained 1.46 per cent and Nifty Metal climbed 1.26 per cent, with Hindalco and Tata Steel among the top index gainers. On the other end, IT shed 1.75 per cent and FMCG fell 1.05 per cent, with HCL Technologies and Infosys leading the declines. Voltas was a notable casualty despite reporting a 51 per cent YoY jump in Q1 PAT to ₹213 crore, a case of solid numbers simply not being good enough for a market priced for perfection.

Broader markets held up better. The Nifty Midcap 100 ended nearly flat while the Nifty Smallcap 100 advanced 0.36 per cent, reflecting selective buying interest away from large-cap heavyweights.

On currencies, the rupee weakened around 14 paise to 95.59 against the dollar, pressured by subdued foreign institutional flows and the RBI advancing the cut-off date for its concessional FCNR(B) swap facility to August 31. “The rupee remains sensitive to crude and dollar movements,” said Jateen Trivedi of LKP Securities, pegging the near-term trading range at 95.25–95.85.

Brent crude rose 1.2 per cent to above $89 per barrel, a key overhang for markets and oil marketing companies alike. Gold traded near $4,395 on COMEX, with MCX Gold holding broad support around ₹1,54,750, as investors await the US Federal Reserve’s July meeting minutes for direction on interest rates.

Against this cautious backdrop, the Q1FY27 earnings scorecard offered a rare bright spot. Nifty 50 companies reported 18 per cent YoY growth in profit after tax, the highest in 10 quarters and well ahead of Motilal Oswal’s 10 per cent estimate. ONGC, Hindalco, Reliance Industries, JSW Steel, and Bharti Airtel collectively accounted for 60 per cent of the earnings increase. Mid-cap and small-cap companies also impressed, with PAT rising 23 per cent and 31 per cent respectively. The FY27 Nifty EPS estimate has since been nudged up 0.6 per cent to ₹1,232.

Looking ahead, markets are likely to remain range-bound this week with focus shifting firmly to global cues. The US Fed’s July FOMC minutes, the trajectory of crude prices, and the status of the US-Iran ceasefire will be the primary watchpoints. Domestically, IPO activity is set to stay busy, with six new issues, including Horizon Industrial Parks, Lalithaa Jewellery Mart, and Molbio Diagnostics, scheduled to open for subscription. On the charts, analysts see 24,380–24,450 as the immediate resistance for Nifty, while 24,160–24,250 remains the key support zone to watch.

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