Many experts are fearing that earnings downgrades may now surpass upgrades during this financial year. Several leading broking firms have already cut earnings estimates for this year. "FY26E EPS has been trimmed by 2%.

FY26 numbers continued to report significant downgrades with earnings cut of 3% for BSE 500. Consumers, autos and industrials faced earnings cuts while earnings stabilised for commodity companies. Market participants believe that given the dearth of positive triggers to drive the markets higher, earnings was being seen as an important factor to support a revival.

"The 4QFY25 earnings fared better than expectations; however, forward earnings revisions continue to exhibit weakness," Motilal Oswal MOFSL said Q4FY25 Nifty50 EPS had grown by 4.9 percent, which was better than the expected 2.2 percent decline seen a year ago. In a similar context, another leading broking firm JM Financial has also cut its FY26e and even The Indian market seems to be stuck between the harsh realities of stiff valuations, domestic growth issues and global macroeconomic headwinds. Of these, the largest EPS cuts for FY26E are in Automobiles, Cement, Oil & Gas, and NBFCs.