As Nifty 50 firms release their third-quarter FY25 financial results, earnings growth has shown disappointing trends, according to a JM Financial report. So far, 26 of the 50 index companies have reported a mere 4.4% year-on-year growth, falling short of the anticipated 5.8%. This has prompted a downward revision in the full-year earnings per share (EPS) growth estimate to 3.8% for FY25, compared to a previous forecast of 5%.
Throughout FY25, Nifty 50 companies have struggled with lackluster earnings performance. In the first quarter, EPS growth was recorded at 5.5% year-on-year, dropping to 4.2% in the second quarter. The ongoing weak financial results for Q3 reinforce this sluggish trend.
Despite the current challenges, the report maintains a positive outlook for FY26, projecting a robust 18.3% EPS growth. This anticipated recovery is expected to be driven by supportive government actions, including tax cuts introduced in the latest budget without compromising fiscal discipline. The fiscal deficit for FY25 is now estimated at 4.4% of GDP, slightly improved from earlier estimates, while the FY26 projection stands at 4.8%, down from 4.9%.
The report also raises the possibility of the government signaling the Reserve Bank of India (RBI) to lower interest rates by keeping the fiscal deficit in check, which could stimulate economic growth through reduced borrowing costs.
In summary, while Nifty 50 earnings have underperformed in FY25, optimism prevails for FY26, buoyed by favorable government policies, a stronger rural economy, and anticipated increases in capital expenditure.
Original Source: https://www.livemint.com/companies/company-results/26-company-nifty-50-reported-4-4-percent-growth-yoy-q3fy25-against-4-2-percent-q2-markets-business-news-earnings-results-11738478766034.html
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Publish Date: 2025-02-02 13:06:00
