India Inc clocks strongest revenue growth in 9 quarters; margins squeezed by rising costs
In the June quarter, Indian companies celebrated remarkable revenue growth, reaching a nine-quarter high. Despite this, profits grew by only eleven percent, largely due to rising input costs. Key sectors such as auto, banking, metals, and pharma played a pivotal role in this expansion. Notably, small and midcap firms showcased impressive earnings per share. Looking ahead, revenue is anticipated…
India's large companies reported their highest revenue growth in nine quarters during the June quarter, expanding by 19.4% year-on-year. This surge was led by the auto, banking, metals, and pharma sectors. However, net profit growth slowed to 11% during the same period, as increasing input costs dampened profits. Despite this, the improvement in earnings per share (EPS) growth for Nifty 50 and Nifty 100 stood at 11.0% and 8.3%, respectively.
Midcap and smallcap companies showed even stronger EPS growth, with 34.0% and 36.4% respectively. The banking and finance sector continued to bolster the overall bottom line. However, excluding this sector, the net profit growth decelerated to 5.4% due to a weaker performance in the oil and gas sector, which was affected by higher fuel marketing losses and rising LPG under-recoveries amid volatile international energy prices.
Excluding oil and gas companies, the net profit growth rebounded to 20.9% for the June quarter. The overall operating margin contracted to 16.6% from 19.6% a year ago, reflecting the impact of higher input cost inflation. For the coming quarters, seasonal demand from the festival and wedding periods, as well as the premiumisation of products, are expected to sustain revenue momentum and support future profitability.
Written by urgent.news from The Economic Times - Top News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
