EMS, Telecom, Industrial and Retail sectors to deliver strong earnings growth over next 2 years: Report
Jan 05, 2026
New Delhi [India], January 5 : Sectors such as EMS, telecom, industrials and retail are expected to deliver stronger earnings growth over the next two years, supported by improving macroeconomic conditions, according to a report by Antique.
The report stated this by highlighting a point that corporate earnings are positively correlated with the Wholesale Price Index (WPI) and nominal GDP growth. Both these key macro parameters are expected to normalize in FY27, which is likely to create a more supportive environment for corporate profitability.
It stated, "Sectors likely to deliver stronger earnings growth are EMS, telecom, industrial, and retail; while the laggard are likely to be oil & gas, IT services, power utilities, FMCG, and auto."
On the back of these macro tailwinds, the report also projects Nifty 50 earnings growth of around 16 per cent CAGR over FY26-28. This is a significant improvement compared to the muted 7 per cent CAGR recorded over FY24-26.
According to the report, sectors that are closely aligned with domestic demand and structural growth themes are likely to benefit the most in the coming years.
EMS, telecom, industrials and retail are expected to emerge as the strongest performers in terms of earnings growth over the next two years, aided by better demand conditions and operating leverage as macro indicators stabilize.
On the other hand, the report noted that some sectors are likely to lag in earnings growth during this period. These include oil and gas, IT services, power utilities, FMCG and the automobile sector.
The report suggests that these segments may continue to face sector-specific challenges, which could limit their earnings growth compared to the broader market.
The report also pointed to another encouraging trend for the market. The pace of earnings downgrades across large-cap, mid-cap and small-cap companies has slowed over the past four quarters.
This moderation in downgrades is seen as a positive sign, indicating improved earnings visibility and greater stability in corporate performance.
Overall, the report suggests that with WPI and nominal GDP growth expected to normalize in FY27, the corporate earnings outlook is set to improve meaningfully.
The projected acceleration in Nifty 50 earnings growth over FY26-28 reflects this improving macro backdrop, even as sectoral performance is expected to remain mixed.
