2 weeks Ago
ET Intelligence Group : Corporate India reported double-digit growth in net profit for the three months to September, excluding oil and gas companies, the performance of which was hit by lower refining margins and LPG underrecoveries. It was the seventh consecutive quarter of double-digit profit growth though the rate of expansion has been decelerating since the March quarter. Amid the weakness in the broader stock market, the corporate earnings trajectory will be keenly watched, with analysts looking for a recovery in the second half of the fiscal year.
The aggregate net profit rose 15.2% year-on-year while revenue grew 8.5%.
Profit growth moderated to 3.4% and that in revenue to 6.8% once oil and gas companies were included.
The latter sector’s revenue rose 1.6% while profit fell 46.7%.
“The corporate earnings scorecard for the September quarter has been weak but excluding commodities, it’s broadly in line,” said Gautam Duggad, institutional research head, Motilal Oswal Financial Services . ET Bureau To be sure, the earnings spread has deteriorated with only 62% of companies covered by the brokerage either meeting or exceeding profit expectations, he said. HDFC Securities retail research head Deepak Jasani drew attention to the higher base in the yearago quarter in the form of strong profit growth—36% for the total ETIG sample of 2,369 companies–due to lower commodity and energy prices.
This, together with higher interest costs due to rising working capital requirements and lower extraordinary gains, limited profit growth in the September quarter, according to Jasani. Stock Trading Mastering Options Selling: Advanced Strategies for Success By - CA Manish Singh, Chartered Accountant, Professional Equity and Derivative Trader View Program Stock Trading Technical Trading Made Easy: Online Certification Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading A2Z of Stock Market for Beginners: Stock Market Course For Beginners By - elearnmarkets, Financial Education by StockEdge View Program Stock Trading Complete Guide to Stock Market Trading: From Basics to Advanced By - Harneet Singh Kharbanda, Full Time Trader View Program Stock Trading Technical Analysis Demystified: A Complete Guide to Trading By - Kunal Patel, Options Trader, Instructor View Program Stock Trading RSI Made Easy: RSI Trading Course By - Souradeep Dey, Equity and Commodity Trader, Trainer View Program Stock Trading Market 103: Mastering Trends with RMI and Techno-Funda Insights By - Rohit Srivastava, Founder- Indiacharts.com View Program Stock Trading Advanced Strategies in Stock Market Mastery By - CA Raj K Agrawal, Chartered Accountant View Program Stock Trading Market 104: Options Trading: Kickstart Your F&O Adventure By - Saketh R, Founder- QuickAlpha, Full Time Options Trader View Program Stock Trading Ichimoku Trading Unlocked: Expert Analysis and Strategy By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Stock Valuation Made Easy By - Rounak Gouti, Investment commentary writer, Experience in equity research View Program Stock Trading Introduction to Technical Analysis & Candlestick Theory By - Dinesh Nagpal, Full Time Trader, Ichimoku & Trading Psychology Expert View Program Stock Trading Derivative Analytics Made Easy By - Vivek Bajaj, Co Founder- Stockedge and Elearnmarkets View Program Stock Trading Options Scalping Made Easy By - Sivakumar Jayachandran, Ace Scalper View Program Stock Trading Cryptocurrency Made Easy: Cryptocurrency Course By - elearnmarkets, Financial Education by StockEdge View Program Bright Spots The total sample’s operating margin contracted by 160 basis points to 16.
7%, the lowest in seven quarters. A basis point is one-hundredth of a percentage point. Banks and finance companies continued to support the overall performance of the sample.
The lending sector’s revenue grew 16.7% and net profit rose 15.1% from the year earlier.
Excluding these companies, the sample’s revenue rose by 4.9% while net profit declined 3.6%.
The operating margin for the sample excluding banks and finance companies eroded 140 basis points year-on-year to a seven-quarter low of 13.7% following a 110 ba- sis-point increase in raw material prices as a percentage of revenue to 35.1%.
Sector-wise performance was mixed. “Consumer durables, pharmaceuticals, finance and banking, and defence sectors have performed better while oil and gas and metals continue to drag the overall performance,” said Chethan Shenoy, head of research, Anand Rathi Wealth . Among the Nifty 50 companies, margins have increased for defence, IT, healthcare, financials and banking, while they have dropped for oil and gas, power, retail and FMCG sectors year-onyear, Shenoy said.
In the coming quarters, the inflationary trend, geopolitical developments, corporate earnings growth and the interest rate scenario will be key factors to watch out for. (You can now subscribe to our ETMarkets WhatsApp channel ).
