April 2026 Market Wrap: 4 Key Shifts After Q4 FY26 Results

FY26 was not an easy year for Indian equity markets. The Nifty 50 ended the financial year with a decline of around 4–5 per cent, reversing gains seen over the previous two years. Volatility surged sharply, with India VIX more than doubling during the year and touching a high of 28.90. Foreign institutional investors (FIIs) pulled out approximately Rs 3.33 lakh crore from Indian equities, with March 2026 alone witnessing an outflow of Rs 1.22 lakh crore, the largest monthly outflow on record.

The turbulence was largely driven by external factors. A military strike by U.S. and Israeli forces on Iran on February 28, 2026 pushed Brent crude prices above USD 110 per barrel. The Indian rupee weakened significantly, falling to a record low of Rs 95 against the dollar, marking its steepest annual decline since FY12. In response, the RBI paused its rate-cutting cycle and held the policy rate at 5.25 per cent.

Despite these headwinds, domestic institutional investors (DIIs) provided strong support, investing around Rs 8.50 lakh crore into equities over the year. India’s GDP growth remained resilient at approximately 7.4 to 7.6 per cent. When Q4 FY26 earnings were announced in April 2026, the results painted a more balanced picture than what index performance suggested.

Out of 214 companies that reported results, 137 posted profit growth, 68 reported declines, and 9 remained flat. This indicates divergence rather than broad-based weakness, with fundamentally strong companies continuing to perform while weaker businesses reflected existing pressures.

The Banking sector remained relatively stable, though divergence persisted between PSU and private banks. PSU bank indices gained over 26 per cent in FY26, while private bank indices declined around 6–7 per cent. HDFC Bank reported a profit after Tax (PAT) of Rs 19,221.05 crore in Q4 FY26, up 9 per cent year-on-year, supported by post-merger stabilisation. ICICI Bank posted an 8.5 per cent growth in PAT, driven by strong asset quality and a diversified loan portfolio. Bank of Maharashtra stood out with 35 per cent PAT growth, reflecting the broader PSU banking recovery. IndusInd Bank reported a PAT of Rs 594 crore after a loss in the previous quarter, although earlier governance concerns continue to weigh on investor sentiment. Overall, the sector showed improving profitability and stable asset quality, supported by RBI liquidity measures and an accommodative stance.

The information technology sector, which was among the worst performers in FY26 with the Nifty IT index declining over 20 per cent, showed signs of recovery in Q4. TCS reported revenue growth of 9.6 per cent and PAT growth of 12.2 per cent, an improvement from 5 per cent revenue growth in Q4 FY25. Infosys delivered 13.4 per cent revenue growth and a 20.9 per cent rise in profit. Persistent Systems posted 25.1 per cent revenue growth and 33.7 per cent PAT growth. The recovery was driven partly by a low base but also by improving client spending, especially in AI-related services and enterprise digital transformation projects.

The capital markets ecosystem emerged as a major beneficiary of FY26 volatility. Elevated trading volumes and strong SIP inflows created favourable conditions for brokers, exchanges, and asset managers. Billionbrains, the parent of Groww, nearly doubled its revenue and more than doubled its profit year-on-year. Angel One reported an 83.5 per cent increase in PAT, while CRISIL posted nearly 46 per cent PAT growth, reflecting strong activity in credit and bond markets.

In the consumer goods segment, Nestle India reported robust Q4 performance with 22.6 per cent revenue growth and 27.18 per cent PAT growth, supported by volume recovery and easing input costs. Trent continued its expansion in organised retail. While the FMCG index declined 15 per cent in FY26, early signs of demand recovery were visible, although competitive pressures from emerging brands persist.

Other sectors also showed improvement. In specialty chemicals, Atul Ltd reported 66.1 per cent PAT growth on 15.05 per cent revenue growth, indicating easing margin pressures. In the power sector, Waaree Renewables more than doubled its revenue, highlighting strong demand in India’s Solar value chain.

Q4 FY26 earnings did not erase the challenges of the past year but clarified a critical point: the decline in the Nifty 50 during FY26 was driven more by external shocks and sentiment than by a widespread deterioration in corporate fundamentals. Companies with strong balance sheets, competitive advantages, and adaptability continued to deliver solid performance, while weaker players lagged.

As FY27 begins, earnings data from Q4 provides a clearer roadmap for investors. While geopolitical risks, crude oil prices, and currency movements will continue to influence market sentiment, the underlying corporate earnings trajectory is becoming more visible across sectors. Investors are likely to increasingly differentiate between fundamentally strong businesses and those requiring structural improvements.

Disclaimer: The article is for informational purposes only and not investment advice.