India Inc’s performance on the topline improved in March quarter compared to the previous quarters but profitability suffered as costs (operational as well as fixed) rose at a rapid pace.

According to data provided by Capitaline, net sales of 95 companies (excluding banks, financial services and insurance) forming part of NSE 500 grew 14.9 per cent year-on-year in March 2018 quarter -- highest in eight quarters. This is despite a higher base of last year when sales had grown close to 13 per cent (faster than expected recovery from demonetisation).

However, operational performance has just trailed the sales growth with 14.1 per cent growth thanks to jump in raw material costs (up 26.5 per cent).

Further, spike in interest, depreciation and tax led to adjusted net profit growth cringing to 6.3 per cent compared with 9 per cent y-o-y rise in the previous quarter. A combination of interest, depreciation and tax as percentage to operating profit jumped to 66.4 per cent in Q4 compared with 64.5 per cent in the previous quarter.

“The 4QFY18 earnings season has so far been broadly in line with expectations in terms of revenue. However, profits have missed estimates,” said Motilal Oswal in a note.

Overall performance has been mainly supported by Reliance Industries with 38 per cent, 51 per cent and 17.5 per cent jump in net sales, operating profit and adjusted net profit, respectively.

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