• BFSI (except NBFCs), Construction & Textiles to report decline in earnings
  • IT, Healthcare, Industrials, FMCG & Logistics to report moderate earnings growth

Mumbai : Financial services firm Equirus Securities has released a press note on the preview of Q2FY26 earnings across sectors. Equirus universe companies’ revenue is set to grow 9% in 2QFY26, with EBITDA/PAT both up by 9%, driven by strong OMCs but held back by BFSI. Ex-BFSI, EBITDA/PAT rise 16%/19%; ex-OMC, EBITDA/PAT growth is 6%/5%. Mid-caps are expected to deliver strong high-teen earnings growth, outpacing large and small caps, though sales growth remains similar across caps.

Autos

In Q2FY26, overall, 2-Wheeler wholesales rose 10% YoY, with domestic volumes up 7% YoY driven by channel stocking ahead of the festive season, while exports maintained strong momentum, growing 26% YoY. However, 2-Wheeler retail sales in the quarter increased only 1%, as customers postponed purchases following the GST cut announcement. Demand remained subdued through most of Q2 but recovered sharply during the Navratri festival, coinciding with the implementation of the GST cuts.

In Q2FY26, overall PV wholesales rose 3% YoY, as domestic wholesales declined 2% YoY with dealers cutting back on orders with OEMs post the GST cut announcement amid already elevated inventory levels ahead of the festive season. Meanwhile, exports registered a robust 24% YoY growth. PV retail sales increased 3% YoY, with demand being subdued between August 15 and September 21 but rebounding sharply during the Navratri festival, coinciding with the implementation of the GST cuts.

Overall MHCV truck wholesales are expected to rise 6-7% YoY in Q2FY26, while the MHCV bus segment remained largely flat. OEMs continued to keep discounting under control. The LCV segment is projected to grow 13–15% YoY.

OEM margins are expected to improve sequentially, supported by operating leverage benefits from higher volumes. Realizations for 2W manufacturers are likely to rise on account of a favorable product mix, while Maruti’s realizations are expected to decline due to an adverse mix.

Within the tyre segment, replacement volumes are expected to grow high-single digit, OEM volumes are expected to grow mid-single digit while exports are expected to be moderate. Margins of tyre companies are expected to improve QoQ due to softening of RM prices.

Ancillary companies serving Domestic 2W OEMs are expected to do well on YoY basis compared to 4W and export-oriented ancillaries. Margins of ancillary companies are expected to improve driven by operating leverage benefits.

Top picks: Hero Motocorp and Lumax Industries  

Building Materials

Demand from new construction stayed weak for late-stage materials like tiles and bathware, while organized wood panel players saw some recovery from mkt. share gains. Paint demand was hit by prolonged monsoons, recovery likely in 3Q26.

Top Picks: APL Apollo, Cera, Greenpanel, Carysil

Construction

Recently NHAI has introduced various changes in the bidding norms like

a) Tightening the net-worth criteria- committed equity to be considered for net worth calculation

b) Awarding projects at 90% land acquisition

c) bringing in additional performance security for bidders who have quoted abnormally low prices

d) Restricting Number of Projects per Engineer for Consultancy Firms etc which will benefit the entire industry especially the listed players in the medium to long term. NHAI plans to bid out project’s worth ~Rs3.4tn in near to medium term – of which HAM constitutes 72%, BoT- 18% and EPC-10% which will boost the overall revenue visibility once it translates into awarding.

Majority of infrastructure players have already started venturing into new segments like Mining, Power Transmission, Railways Ropeways, MMLP, Solar power etc., diversifying their business risks. With NHAI awarding expected to pick up and various state governments likely to come up with new expressways overall revenue visibility is expected to improve gradually. Execution challenges are likely to recede gradually as regulatory approvals are likely to fall in place. Stable commodity prices and interest rate regime will ensure healthy cash-flows. Unlocking equity from HAM/BOT assets would be a key monitorable. Equirus Securities continues to prefer companies with a lower order book base, strong balance sheet (less risk of equity dilution) and better working capital management.

Top picks: PNC Infratech, PSP Projects, H G Infra Engineering, RITES etc.

Financials

Key theme for 2QFY26 will be:

  • Trends in NIMs given aggressive deposit rate cuts to offset the REPO/MCLR cuts will be a key monitorable. Equirus Securities expects most banks to report sub 10bps NIM compression except Axis (~15bps), DCB Bank (~15bps) and CUBK (~12bps).
  • Credit growth is likely to improve QoQ with growth ~4% QoQ for most players. Expect healthy loan growth trends for BOB (+6% QoQ), HDFC Bank (+4% QoQ), Kotak (+4% QoQ), RBK (+6% QoQ). Equirus Securities expects deposit growth to lag advances growth.
  • Equirus Securities expects asset quality trends to remain healthy across most segments of corporate and retail credit. Trends are likely to improve in MFI and credit cards. Incrementally the research house expect some uptick in delinquencies in vehicle finance segment.
  • Treasury gains are likely to be soft Key things to look for:
  • Asset quality Trends in Commercial Vehicle loans
  • PAR levels and credit costs in MFI segment and commentary on collections in 2Q.
  • Comments on trends in unsecured retail disbursements and delinquency trends.
  • Mix of loan growth across banks
  • Comments upon competitive environment.
  • Top Picks: Axis bank, HDFC Bank