Motilal Oswal Projects 16% EPS Growth for Nifty50 in FY27
Motilal Oswal Financial Services anticipates a rebound in corporate earnings, forecasting a 16% rise in Nifty50 EPS for FY27 amid a recovering domestic economy.
Nifty50 earnings per share expected to grow 16% year-on-year in FY27.
Previous year saw a 12% decline in Nifty50 due to global challenges.
Selectivity in stock picking is advised for investors in the upcoming Samvat.
Motilal Oswal Financial Services has released an optimistic outlook for Indian equities as they enter Samvat 2083, despite facing a challenging global economic environment. The firm projects a significant recovery in corporate earnings, with a forecasted 16% increase in earnings per share (EPS) for the Nifty50 in FY27, followed by a 14% rise in FY28. This marks a notable improvement compared to the modest 5% growth anticipated for FY26.
The previous Samvat period was difficult for investors, characterized by a 12% decline in the Nifty50 index until late October. Contributing factors included geopolitical tensions in West Asia, soaring crude oil prices exceeding $100 per barrel, a depreciating rupee, and substantial foreign institutional investor (FII) withdrawals totaling around $28 billion from January to September 2026. Despite these challenges, Motilal Oswal emphasizes that the domestic economic fundamentals remain robust, highlighted by a 7.8% GDP growth in the first quarter of FY27 and strong systematic investment plan (SIP) inflows that have helped mitigate foreign selling pressure.
The brokerage notes that market valuations have become more appealing following recent corrections. Currently, the Nifty is trading at 17.5 times forward earnings, approximately 16% below its long-term average, while midcap valuations are about 6% lower than historical norms. However, small-cap stocks continue to trade at a 25% premium, suggesting a need for caution in that segment.
In light of these dynamics, Motilal Oswal advocates for a selective investment strategy rather than broad market exposure. Key factors to watch in Samvat 2083 include crude oil price trends, decisions from the Reserve Bank of India regarding interest rates, foreign investor activity, trade agreement developments, and the overall pace of corporate earnings growth.
The firm believes that a combination of improved earnings visibility, attractive large-cap valuations, and resilient domestic demand could present favorable investment opportunities in the new Samvat, provided investors exercise discretion in their stock selections.
