Kotak's Sanjeev Prasad Sees 17.5% Nifty Earnings Growth in FY27, Remains Negative on IT Stocks
Key Takeaways
- •Sanjeev Prasad of Kotak Institutional Equities projects Nifty earnings growth of 17.5% for FY27, the Indian financial year spanning April 2026 to March 2027.
- •Prasad remains cautious on elevated midcap valuations, which have traded at a premium to large caps during a multi-year rally fueled by domestic mutual fund inflows.
- •He continues to avoid IT stocks, pointing to AI-led disruption as well as concerns over the sector's long-term growth and margins.
- •India's IT services sector, home to Nifty heavyweights such as Tata Consultancy Services, Infosys and HCL Technologies, carries substantial weight in the index, making its outlook influential in index-level earnings estimates.
- •The forecast follows a moderation in Indian corporate earnings growth from the sharp post-pandemic rebound, with quarterly earnings momentum serving as the primary reference point for market observers.
Sanjeev Prasad, Managing Director and Co-Head at Kotak Institutional Equities, expects Nifty earnings to grow 17.5% in FY27, according to a CNBC-TV18 Markets report published on August 19, 2026.
Index-level estimates of this kind are closely watched because they set the benchmark against which actual results and valuations are judged. They also come after corporate earnings growth in India moderated from the sharp post-pandemic rebound of earlier fiscal years, making the pace of any re-acceleration a central question for market watchers, with quarterly earnings momentum the primary reference point.
Alongside that earnings forecast, Prasad remains cautious on expensive midcap valuations and continues to avoid IT stocks, citing AI-led disruption as well as concerns over the sector's long-term growth and margins.
Background
Kotak Institutional Equities is the institutional equities research and broking arm of the Kotak Mahindra group, and Prasad is one of its senior-most voices on Indian equities.
The Nifty 50 is the flagship large-cap index of the National Stock Exchange of India (NSE), tracking 50 of the country's largest listed companies. FY27 refers to the Indian financial year running from April 2026 to March 2027. Midcaps, by contrast, are companies that rank below the NSE's top 100 listed firms by market capitalization. Midcap valuations have commanded a premium over large caps during the multi-year rally fueled by domestic mutual fund inflows, a premium analysts have repeatedly flagged as stretched.
India's information technology services sector — home to index heavyweights such as Tata Consultancy Services, Infosys and HCL Technologies — carries substantial weight in the Nifty, which is why the sector's growth and margin outlook feature prominently in index-level earnings estimates. The potential impact of artificial intelligence on IT services demand, pricing and margins has been a recurring theme in analyst discussions of the sector, with quarterly management commentary on client discretionary spending and AI adoption among the markers used to gauge how that debate resolves.
