Profit-growth forecasts for widely followed Indian listed companies have contracted by more than 700 basis points against where they stood before hostilities with Iran broke out in February. Drawing on a cohort of listed companies with broad market representation, analyst projections compiled in February pointed to combined earnings growth of 16.5 per cent for FY27, as documented in the National Stock Exchange's Market Pulse report dated September.
By September, that shared forecast for FY27 earnings growth had retreated to 9.2 per cent, the report's data showed. Of the 200 firms examined, each had received coverage from a minimum of five analysts throughout the twelve months leading up to the study.
On 28 February, military strikes attributed jointly to the United States and Israel were carried out against Iran. Attacks on oil facilities in the region and a disruption to vessel traffic through the Strait of Hormuz followed after Iran carried out strikes against countries aligned with the United States in West Asia. Fighting persisted through October, ebbing and flowing in its intensity.
Over the seven-month period, energy and raw-material costs tied to the conflict pushed margins down by 730 basis points. Of the sectors tracked for analyst revisions, energy recorded the steepest drop in earnings forecasts, with companies across the industry grappling with cost pressures tied to elevated oil prices. Between February and September, the median analyst projection for FY27 earnings growth in the energy sector swung from a modest 2 per cent gain to a contraction of 16.9 per cent.
Earnings projections across the bulk of remaining industry categories moved lower. Projections for the consumer staples sector swung from an anticipated FY27 expansion of 9.8 per cent, recorded in February, to a contraction of 3.8 per cent by the time September figures were compiled. Four market sectors — consumer discretionary, industrials, information technology, and financials — each shed somewhere between 100 and 500 basis points from their February levels.
Real estate was the one sector that moved against the prevailing trend. Analysts lifted the FY27 earnings growth forecast by 350 basis points, bringing the revised figure to 28.1 per cent from the 24.6 per cent estimate put forward in February, with continued appetite for premium housing underpinning the adjustment.
Businesses across multiple industries are weighing how much of their swelling cost burdens can be passed along rather than absorbed internally, with one analyst noting that the period between the first and second quarters marked a turning point — the moment when elevated input costs began flowing through in earnest to corporate profit and loss accounts. A research note published by Axis Securities in October 2026, authored by Uttam K Srimal, who serves as deputy head of research, outlined how rising input costs across energy, freight, metals, chemicals, and imported components were placing strain on corporate margins, with rupee depreciation compounding the burden for businesses that rely on imports.
Faced with elevated input costs, businesses are deploying a mix of expense reductions and price adjustments, though the report notes that the scope for transferring those burdens to customers differs across industries depending on how fiercely they compete. A PL Capital India Strategy report dated 9 October, authored by Amnish Aggarwal, flagged that household spending capacity in the near term faces headwinds from costlier food and fuel, compounded by steeper borrowing costs weighing on big-ticket purchases such as vehicles and consumer durables. The report further noted that demand across the preceding two to three quarters had been uneven, with mass-market goods experiencing strain while premium categories expanded at a considerably faster pace, and projected that a pattern along those lines would continue to unfold across the quarters ahead.
Profit-growth forecasts among analysts have been pushed out to the fiscal 2028 timeframe. Market Pulse figures tracking FY28 earnings growth expectations show the consensus estimate climbing from 14.3 per cent at the start of February to 17.2 per cent by the end of September. Profit growth across the FY26–28 window is projected to remain in positive territory.
Three sectors account for the bulk of those advances. Projections place the financial sector's share of new earnings generated between FY26 and FY28 at roughly 40.8 per cent of the total incremental gain. Ranked behind the top sector, consumer discretionary accounts for 13.1 per cent of the incremental earnings pool, and the industrials segment is projected to make up a further 11.3 per cent of the total. Across the span from FY26 through FY28, those three sectors are projected to account for roughly 65 per cent of all new earnings growth.
