Nifty 500 Index companies reported a 181 bps/253 bps qoq/yoy decline in margins in 1QFY27 on aggregate (ex-BFSI) but expanded 153 bps/10 bps qoq/yoy ex-oil & gas and BFSI
FinTech BizNews Service
Mumbai, 31 August, 2026: A Strategy Note, authored by Sanjeev Prasad, MD & Co-Head, Kotak Institutional Equities provides useful insights particularly on the Mid & Small Caps:
1QFY27 results: Broad-based revenue acceleration
Nifty-500 Index companies broadly delivered (1) a sharp and broad-based acceleration in revenue growth, (2) volatile margins and (3) strong earnings growth yoy in 1QFY27 (ex-oil & gas). We note that topline trends were broadly similar across market caps, even as PAT growth was higher for smaller companies. However, consensus earnings upgrades were selective, suggesting a calibrated outlook of the Street at present.
Nifty 500 companies saw 20% sales growth, 5% EBITDA growth, 10% PAT growth
1QFY27 results of the Nifty 500 companies show that the broader universe delivered a strong 20% yoy revenue growth (15% yoy ex-energy). Meanwhile, EBITDA grew 5% yoy (19% yoy ex-energy), while PAT grew 10% yoy (20% yoy ex-energy). We note that revenue growth has seen acceleration across most sectors (18/31 sectors delivered more than 15% revenue growth), resulting in broadening of EBITDA and PAT growth in 1QFY27.
Strong sales growth across market caps. drove strong profit growth
The contribution of the top-100 companies to revenues of the Nifty 500 Index universe saw modest increase to 66%, while the contribution to PAT has remained largely stable at 72%. Sales growth (ex-oil & gas) was between 13% and 17% across market caps, with sequential acceleration seen in large-caps and small-caps. However, mid-and-small caps outpaced large-caps in EBITDA and PAT growth in 1QFY27. Exhibits 11-13 show the sectoral earnings growth in the Nifty 500 Index universe by market cap.
Volatile margins in aggregate
Nifty 500 Index companies reported a 181 bps/253 bps qoq/yoy decline in margins in 1QFY27 on aggregate (ex-BFSI) but expanded 153 bps/10 bps qoq/yoy ex-oil & gas and BFSI. However, strong yoy margin expansion was seen in commodity/energy-linked sectors such as building products, electric utilities, gas utilities, metals & mining, real estate and specialty chemicals, while large yoy margin contraction was seen mostly in automobiles & components, capital goods, consumer staples, healthcare services, oil & gas and transportation. We note that RM costs (ex-oil & gas) remain at elevated levels, while employee expenses/sales were broadly stable ex-oil & gas.
Consensus expects stable and broad-based earnings growth over FY2027-28E
We note that consensus is currently projecting 13%/18% earnings growth on full float basis for Nifty 500 companies over FY2027/28E. Earnings expectations remain relatively broad-based, with 15/31 sectors currently projected to deliver more than 20% earnings growth in FY2027E. However, earnings estimates are broadly unchanged on aggregate, even as select sectors witnessed noticeable change in estimates.
