A large part of India Inc’s performance in the December quarter has shown improvement, especially on the profitability front. While topline growth of 35 companies forming part of Nifty 50 index (excluding banks, financial services and oil and gas) at 10 per cent year-on-year is slightly lower over 10.7 per cent y-o-y growth witnessed in the previous quarter, increase of 9.4 per cent in adjusted net profit has been best in the last four quarters, according to data provided by Capitaline.

If metals companies are excluded, then the growth numbers of 31 companies have come down to 8.5 per cent and 7.2 per cent for topline and bottomline, respectively in Q3. However, the trend compared to the previous quarters (improvement) remain the same.

The improvement in financial performance in the Q3 is mainly due to the lower base created by demonetisation (announced on November 8, 2016) in the same quarter last year. In the December 2016 quarter, sales of companies (excluding the ones mentioned earlier) had grown in single digit of 7.4 per cent, while it is 6 per cent if metals companies are also excluded. Net profit declined 1.4 per cent for companies excluding banks, financial services, metals and oil and gas. Overall performance has been led by companies such as RIL, Tata Motors, L&T, GAIL and HUL. While most companies have reported robust and double-digit topline growth (at least 10 per cent), only few companies have been able to match the topline performance due to decline in other income. The above analysis excludes results of Ambuja Cements and Sun Pharma.

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