For a sample of 219 companies, aggregate net profit grew 29.8% year-on-year in the September quarter, the most in six quarters. Revenue rose at a four-quarter high of 18%. Revenue and net profit had grown 20.6% and 7.5%, respectively, in the year-ago quarter.
The sample’s operating margin shrank 50 basis points year-on-year to 22.6% in the September quarter. A basis point is 0.01 percentage point.
Revenue and net profit in the banking and finance sector soared 49.3% and 45.8%, respectively, boosted by higher credit offtake and improving asset quality. Excluding these companies, the sample’s revenue and profit rose 8.9% and 19.7%, respectively.
BSFI, Auto Sectors Key Drivers
The performance by the IT companies was marred by delayed project execution as clients turned cautious amid rising geopolitical uncertainty. Aggregate revenue and net profit rose 6.9% and 6.6%, in that order. This is the first time in at least nine quarters that revenue has risen in single digits; profit growth was at a four-quarter low.
At the beginning of the current results season, analysts expected robust earnings growth in the September quarter. Motilal Oswal Financial Services had estimated a 40% jump in aggregate earnings for the companies under its coverage.
“Overall earnings growth is anticipated to be driven once again by domestic cyclicals such as BFSI (banking, financial services, insurance) and automobiles, which are expected to post 26% and 87% year-on-year jump while consumer and cement companies would report a healthy 15% and 72% growth, respectively,” the brokerage had stated in a quarterly preview report.
IDBI Capital’s preview report had said that weakness in commodities over the past 12 months would drive better year-on-year growth in operating profit compared with revenue.
With more companies from across sectors to declare numbers, the second quarter trend will become clearer in the coming weeks.
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