Early birds herald result season with good tidings


A strong set of numbers from technology firms, together with sterling performances from heavyweights Reliance Industries and ITC, have given India Inc a flying start this earnings season. Both Infosys and Tata Consultancy Services set the markets on fire before the slow movers the two-wheeler players tempered the sentiment. Hero MotoCorp was a huge disappointment with the company reporting a 20% year-on-year drop in net profit as it sold more of less profitable models while Bajaj Auto's bottom line rose just 3% y-o-y as margins contracted.

That apart, the trends have been encouraging. Almost all private sector banks to have announced results have done exceeding well in what is seen to be a highly competitive environment. HDFC Bank reported its customary 30% y-o-y rise in profits, its asset quality as impeccable as ever, while Axis Bank did well to post a 22% y-o-y increase in the bottom line.

For a sample of 77 companies (excluding banks and financials), skewed heavily in favour of software giants, revenues grew nearly 19%, y-o-y, comparable with the previous three quarters. With companies keeping costs in check, operating profit margins expanded nearly 200 basis points, a sharp improvement over the previous three quarters when they had contracted by anywhere between 150 and 400 basis points. Consequently, operating profits saw a big jump of 38% y-o-y, driving up the bottom line for the sample by an impressive 51% y-o-y. That compares with a 17% increase in the three months to September and a drop in the two quarters before that.

RIL's presence in the sample does tend to distort the picture it posted a 24% y-o-y rise in net profit to R5,502 crore on the back of strong refining margins and a rebound in margins for the petrochemicals business. ITC's profits rose 21% with tobacco revenues robust and non-tobacco FMCG revenues up 30% y-o-y.

... contd.

Please read our terms of use before posting comments
TERMS OF USE: The views expressed in comments published on indianexpress.com are those of the comment writer's alone. They do not represent the views or opinions of The Indian Express Group or its staff. Comments are automatically posted live; however, indianexpress.com reserves the right to take it down at any time. We also reserve the right not to publish comments that are abusive, obscene, inflammatory, derogatory or defamatory.