Nifty Rises, Earnings Fall: The Hidden Truth Behind India's Stock Market Rally

• Nifty delivered over 8% return in the past year, but forward EPS estimates for FY26 and FY27 were cut by 7.8% and 6.5% respectively.
• JM Financial report highlights a disconnect between market rise and analysts' cautious outlook on future earnings.
• Banking, IT, and Cement sectors show strength with EPS upgrades, driven by domestic demand and structural growth.
• Oil & Gas, Metals & Mining, and Pharma sectors face significant pressure with EPS downgrades for many companies.
• Investors advised to be selective, focusing on strong balance sheets and stable earnings, as Nifty's PE ratio around 20 indicates a non-cheap market.

Why It Matters: Market rally masks underlying earnings pressure; investors must be selective and focus on strong fundamentals.