The third-quarter earnings season for India Inc has commenced with heightened expectations, as analysts project strong profit growth across multiple sectors. Motilal Oswal Financial Services (MOSL) forecasts that companies under its coverage could achieve 16% year-on-year growth - the highest in eight quarters - while Nifty earnings are expected to grow 8% YoY in Q3 FY26.

Sector-Wise Growth Outlook

The overall earnings growth momentum is expected to be anchored by diverse sectors including oil & gas, financials led by NBFC-lending, automobiles, metals, telecom, technology, real estate, capital goods, cement and NBFC-non-lending. These sectors are anticipated to contribute 77% of the incremental YoY accretion in earnings.

Six Nifty 50 Companies With Exceptional Profit Projections

Among Nifty 50 constituents, six companies are projected to report profit after tax (PAT) growth exceeding 40% in Q3 FY26:

Steel Sector Leaders

Tata Steel is positioned to benefit from improving steel price realisations, operating efficiencies, and strong domestic demand outlook. The company's Indian business is expected to continue its robust performance, while improvement in European operations should support overall earnings.

JSW Steel is expected to deliver strong bottomline performance despite potential revenue pressures from muted net sales realisation, which would be partially offset by healthy volumes.

Telecom and Technology Performers

Bharti Airtel continues to be preferred by analysts, with further re-rating contingent on higher long-term ARPU growth. The company's performance will be aided by healthy performance in Homes and Africa segments amid favourable forex changes.

Tech Mahindra is expected to benefit from recovery in the auto segment along with communications. The IT major may see EBIT margin expansion of 60 basis points sequentially to 12.7%, supported by improved gross margins as the company optimises fixed cost projects.

Consumer and New-Age Technology

Eternal has been reintroduced in coverage following recent correction, making it attractive from a valuation perspective. The company's core quick delivery business continues to scale higher, with the quick commerce network already near breakeven.

Tata Consumer is expected to report strong performance across the board, with tea volumes projected to grow in low single digits alongside marginal tea price increases, while the salt business could achieve double-digit growth.

The upcoming earnings season will be closely monitored by investors, as strong corporate performance could potentially attract foreign investment and ease market pressures. Key companies including Tata Consultancy Services and Reliance Industries are scheduled to announce their Q3 results, along with several major banks.

The Nifty has witnessed significant selling pressure, falling sharply from its all-time high of around 26,373 to the current 25,860 zone. This decline has resulted in a decisive breach of a key technical support level, prompting analysts to recommend bearish options strategies.

Technical Breakdown Analysis

From a technical perspective, the index has breached a crucial rising support trendline positioned near 25,980. According to Sahaj Agrawal, Senior Vice President at a leading brokerage firm, this trendline had been instrumental in defining the short-term bullish structure of the index.

The trendline connected two significant swing lows - 25,318 from early November and 25,693 from mid-December. The breach of this support structure indicates a potential shift in the index's short-term trajectory.

Bear Put Spread Strategy

Given the bearish technical setup following the trendline breakdown, analysts are suggesting the deployment of a bear put spread strategy in Nifty options. This strategy is designed to capitalize on the current bearish bias while limiting downside risk.

The bear put spread involves buying a put option at a higher strike price while simultaneously selling a put option at a lower strike price. This approach allows traders to benefit from moderate downward movement in the index while maintaining a defined risk-reward profile.

Market Implications

The decisive breach of the rising support trendline represents a significant technical development for the Nifty. The breakdown from levels that had previously provided support suggests that the index may face continued selling pressure in the near term. The fall from the all-time high of 26,373 to the 25,860 zone represents a notable correction that has altered the technical landscape for the benchmark index.