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HDFC Securities: Q2 Earnings Growth to Slow, Mid & Smallcaps Still Attractive
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Moneycontrol•28-09-2026, 06:36
HDFC Securities: Q2 Earnings Growth to Slow, Mid & Smallcaps Still Attractive
- •HDFC Securities estimates Q2FY27 PAT growth (ex-oil & gas) to moderate to 13-14% from 18-19% in Q1FY27, but still considers it strong.
- •Unmesh Sharma remains constructive on mid- and small-cap stocks due to emerging investment themes, healthy balance sheets, and strong cash flows.
- •Sharma anticipates a 25-basis-point rate hike by the US Federal Reserve in December and a cumulative 50-basis-point hike in India by FY27 end.
- •Margin pressure is expected in sectors like chemicals, FMCG, and cement in Q2FY27 due to elevated crude oil prices and normalization of inventory gains.
- •HDFC Securities is bullish on manufacturing and capex themes, citing India's multi-year capex cycle, government spending, and private sector growth.
Key Questions Answered
PAT growth for HDFC Securities Institutional Equities’ coverage universe, excluding oil and gas, is estimated to moderate to around 13-14 percent in Q2FY27 down from 18-19 percent in Q1FY27.
Equipment manufacturers are direct beneficiaries of the ongoing multi-year capex cycle, driven by grid overhauls, high-voltage direct current technology reliance, AI-driven data centre surges, global shortages of complex technology equipment, and India's strong engineering capabilities.
The proposed IRDAI framework is expected to trigger a near-term earnings reset for digital insurance distributors, insurance companies with high expense-of-management ratios, and banks or NBFCs that rely heavily on insurance fee income.
