Small and mid-caps seen leading Q2 earnings growth
J.P. Morgan expects Nifty 50 earnings to grow 17% in Q2 FY27, while small and mid-cap companies are seen outpacing large caps. Revenue growth across covered companies may accelerate to 20%, despite rising input costs.
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- year-on-year in Q2
- 17% earnings growth
- sequentially
- 20% from 19%
Domestic small- and mid-cap companies are expected to outpace large-cap firms in earnings growth during the September quarter, as capital expenditure, modern manufacturing and artificial intelligence-led data centre investments support demand. J.P. Morgan expects Nifty 50 companies to report 17% earnings growth year-on-year in Q2 FY27, while the companies covered in its research are projected to deliver 16% net-profit growth.
The latest estimate is broadly consistent with Sriram AMC's earlier forecast of 17% to 20% growth in corporate profits, following 15% to 16% growth in the previous quarter. J.P. Morgan also expects revenue growth across its covered companies to accelerate to 20% from 19% sequentially. The sharper outlook for smaller companies points to stronger operating momentum in segments linked to domestic investment and discretionary demand 📈.
The earnings picture is not uniformly positive. Rising raw-material, fuel, freight and packaging costs are expected to weigh on profitability, creating a margin risk even as revenue growth improves. J.P. Morgan expects earnings growth to be led by materials and logistics, with metals, hospitals, retail, consumer discretionary, industrials and financials among the key contributors. The themes connect manufacturing investment ⚙️ with finance and consumption-led activity.
For the broader market, the report adds sector detail to the view that the recent sell-off reflected macroeconomic concerns rather than a deterioration in earnings. Higher bond yields remain a valuation pressure because rising interest rates reduce the present value of future profits. This makes the delivery of revenue growth and margin resilience important for the market's next assessment of smaller and mid-cap companies.
Investors will next track September-quarter results, management commentary on input costs and the pace of capital expenditure and data-centre investment. The spread between earnings growth and margin performance will help determine whether the small- and mid-cap leadership theme broadens beyond selected sectors. The estimates remain forecasts, not reported results.
Source: BusinessLine, 10 Oct 2026; news.google.com, 08 Oct 2026.
Not investment advice. For informational purposes only.