73% Of India Inc Q1 Results Beat Or Meet Estimates, Says HSBC

Corporate earnings for the June quarter have been stronger than expected, reinforcing confidence in India's economic resilience even as investors continue to debate the sustainability of foreign portfolio inflows, according to HSBC Global Investment Research.

In its latest report, HSBC said 73% of companies reporting June-quarter (Q1FY27) earnings have either met or exceeded analysts' expectations. The figure is close to the upper end of the historical range tracked since 2020 and remains well above the multi-year average, suggesting earnings momentum has held up despite an uncertain global backdrop.

The stronger earnings performance has prompted analysts to revise full-year estimates higher for several sectors. HSBC said earnings growth forecasts have been upgraded since the end of June for basic materials and commodities, financials, industrials and consumer staples.

In contrast, the largest downward revisions have been seen in consumer discretionary, healthcare and utilities, reflecting pockets of pressure within the broader market.

High-frequency Indicators Remain Supportive

HSBC noted that recent economic indicators also point to resilient domestic demand. Non-food credit growth accelerated to 18.3% year-on-year in June 2026 from around 10% in late 2025, while passenger vehicle sales have rebounded sharply after contracting by 5-10% in the middle of last year.

The bank said passenger vehicle sales are now growing at 15-25% year-on-year, highlighting improving consumer demand and economic activity.

Cautious On Broader Earnings Cycle

Despite the stronger-than-expected start to the financial year, HSBC cautioned that the earnings cycle is not yet free from risks. The brokerage said further earnings downgrades later in the year remain possible, although it expects markets to look through any near-term weakness.

Consensus estimates currently project India's corporate earnings to grow around 14% in 2026 and 17% in 2027. While these growth rates remain healthy, HSBC noted they are lower than the earnings growth currently expected in South Korea and Taiwan.

Within India, the brokerage expects FY27 earnings growth to remain concentrated in industrials, consumer discretionary and financials. It also highlighted that small- and mid-cap companies continue to carry stronger net income growth expectations than large-cap peers.

HSBC said earnings resilience should be viewed alongside improving fund positioning and India's relatively lower market volatility, rather than as a standalone trigger for a broad market re-rating.