Manufacturing-led 16% Nifty 500 profit rise in FY26

What changed in Q4 FY26 earnings

Manufacturing and investment-linked sectors helped broaden India’s earnings recovery in the March quarter, supporting a 16% year-on-year rise in Nifty 500 profits in Q4 FY26, according to a report by Axis Mutual Fund. The report also flagged that sales growth touched a 13-quarter high, pointing to improving demand across the economy. Profits excluding financial firms rose 17% year-on-year, underscoring that the momentum was not limited to banks and lenders. Another lens showed that excluding metals and oil and gas, aggregate earnings growth was 12% year-on-year. The mix of outcomes highlights how leadership was spread across multiple segments, with some large cyclical pockets still shaping headline growth.

Axis Mutual Fund’s key numbers for the quarter

Axis Mutual Fund reported that the Nifty 500’s aggregate sales, EBITDA and adjusted profit after tax (PAT) all expanded in Q4 FY26. Sales, EBITDA and adjusted PAT grew 12%, 12% and 16% year-on-year, respectively. In absolute terms, aggregate sales were about ₹38.6 trillion, EBITDA about ₹8.2 trillion, and adjusted PAT about ₹4.8 trillion during the quarter. The same dataset emphasised that Q4 FY26 sales growth was the strongest in the past 13 quarters. These figures capture both volume and pricing across sectors and help explain why earnings growth looked more broad-based than in some earlier quarters.

Manufacturing and investment-linked sectors take the lead

The report highlighted manufacturing as an increasingly important growth driver within the broader expansion. Manufacturing sales growth accelerated to 14.5% year-on-year in the March quarter from 11.4% in the previous quarter. The acceleration was attributed to strong demand across automobiles, electrical machinery and metals. The emphasis on investment-linked segments also reflects the report’s view that investment is now leading India’s growth, overtaking consumption. While the report does not quantify the investment-consumption split, it frames the earnings pickup as aligned to capex and industrial activity.

Sector profit growth: auto, infra and capital goods

Within manufacturing and related investment-linked sectors, the profit trend remained positive across key groups. Automobile companies posted earnings growth of 23% year-on-year in Q4 FY26. Infrastructure firms reported 15% year-on-year growth in profits. Capital goods companies recorded an 8% increase in profits over the same period. These sector numbers underline that the earnings recovery is not concentrated in a single pocket, even as some commodity-linked names played a major role in incremental growth.

Midcaps drive the Nifty 500 earnings performance

The report noted that midcap companies were a key driver of the Q4 FY26 earnings performance in the broader Nifty 500 universe. Aggregate earnings of the Nifty Midcap 150 companies grew 34% year-on-year, the highest in nine quarters. In comparison, aggregate earnings of Nifty 100 companies grew 12% year-on-year. Nifty Smallcap 250 companies recorded 13% year-on-year earnings growth. The dispersion is important because it signals that the recovery is not limited to the largest firms, and that more companies are participating in the upcycle.

Where the incremental earnings came from

Across 23 key sectors, 14 posted double-digit profit growth in Q4 FY26, the report said. Metals, oil and gas, and private banks collectively accounted for about 50% of the incremental year-on-year accretion in earnings. The report also listed companies that primarily drove incremental earnings growth in FY26: Indian Oil, BPCL, HPCL, Reliance Industries, Tata Steel, Bharti Airtel, NTPC, Tata Motors CV, ONGC, and HDFC Bank. This list indicates the combined role of commodity-linked businesses, oil marketing companies, select industrials and large financials in shaping aggregate profit expansion.

RBI corporate sales data supports the demand picture

Beyond index-level aggregates, corporate data compiled by the Reserve Bank of India showed aggregate sales growth of 13.9% year-on-year across 3,266 listed companies in the March quarter. The RBI compilation also indicated that growth accelerated across sectors. This aligns with Axis Mutual Fund’s observation that Nifty 500 sales growth hit a multi-quarter high. The combination of RBI and Nifty universe data strengthens the narrative that the March quarter saw a broader pickup in revenue momentum across the listed economy.

What Motilal Oswal said about the earnings season

Motilal Oswal’s Siddhartha Khemka described India Inc’s Q4 earnings season as stronger than expected. Across a universe of nearly 370 companies, he said profit growth came in at 16%, ahead of expectations. He also flagged BFSI, metals, and oil marketing companies as the biggest contributors, with auto and technology delivering steady gains. Motilal Oswal Financial Services separately said companies under its coverage reported 16% year-on-year earnings growth versus an 8% estimate for Q4 FY26. In that dataset, BFSI profits rose 18% year-on-year versus an 11% estimate, metals posted 50% growth versus a 24% estimate, and oil marketing company profits surged 62% versus an estimated 7% growth.

Market moves mentioned alongside the earnings theme

The broader market tone remained supportive, with the Nifty Midcap and Smallcap indices gaining for a second straight week, according to the update accompanying the report highlights. Consumer durables, realty, and defence sectors were cited as leading market gains over the week. While the earnings data discussed is quarterly, this market action provides context on where investor interest was concentrated during the same period.

Key data snapshot

Why the manufacturing signal matters

The quarter’s data points to a recovery that is widening beyond a narrow set of winners, with manufacturing and investment-linked segments increasingly visible in the growth mix. The acceleration in manufacturing sales growth to 14.5% year-on-year, from 11.4% in the prior quarter, provides a specific marker investors can track for trend confirmation. At the same time, the contribution from metals, oil and gas, and private banks, accounting for roughly half of incremental earnings, shows that leadership remains partly anchored in large cyclical and financial heavyweights. The contrast between midcap earnings growth of 34% and Nifty 100 growth of 12% is another key takeaway because it suggests a broader participation in profit growth.

Conclusion

Q4 FY26 results showed a 16% year-on-year rise in Nifty 500 profits alongside the strongest sales growth in 13 quarters, with manufacturing and investment-linked sectors standing out in the momentum. The Axis Mutual Fund report, RBI corporate sales data, and Motilal Oswal’s earnings commentary collectively point to improving demand and broader sector participation in the March quarter. Investors will likely track whether manufacturing sales growth and midcap earnings strength remain resilient in subsequent quarters, alongside sector-level contributors such as BFSI, metals and oil marketing companies.