India Inc clocks strongest revenue growth in 9 quarters; margins squeezed by rising costs
Indian companies experienced their strongest revenue growth in nine quarters during the June period, though rising input costs squeezed profit margins. While sectors like banking and auto performed well, oil and gas companies faced significant headwinds.
Why it matters
Corporate earnings data provides a vital pulse check on the health of the Indian economy and inflationary pressures.
ET Intelligence Group: India Inc reported a 19.4% year-on-year revenue growth in the June quarter - the strongest in at least nine quarters - driven by strong performance in the auto, banking, metals, and pharma sectors.While net profit also grew in double digits at 11%, rising input costs made it the slowest growth rate in a year. In the coming quarters, festivals and wedding season, and focus on product premiumisation are expected to sustain revenue momentum and support future profitability.For a common sample of 3,589 companies, revenue net profit grew in double digits for the third and fourth consecutive quarter respectively. In addition, the momentum was stronger in the case of smallcap and midcap companies.
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