Early data reveal modest earnings for India Inc. in the fourth quarter. A review of data released by 180 firms thus far reveals that disappointing growth by IT companies weighs down corporate performance in the fourth quarter while the consumer and auto sectors maintain consistent progress.
BL Kashyap and Sons: The civil engineering and construction firm has landed a fresh order from Embassy Construction worth Rs 238 crore. Within 28 months, the aforementioned contract is anticipated to be completed. The order book’s current amount is Rs 2,518 crore.
The earliest reports for the January-March 2003 quarter depict a bleak image of corporate profits, mostly because IT companies reported weak growth. This trend does have one positive aspect, though, and that is an increase in operational profitability.
According to a Moneycontrol examination of 180 companies that have reported earnings for the March quarter and for whom comparable data was available for the previous 15 quarters, overall net sales climbed by 14.63 percent YoY. Even if there has been a noticeable increase,
Despite a sequential growth of 14.54 percent, the net profit growth, at just 4.2 percent YoY, was flat when compared to the same period last year due to higher interest costs and depreciation. The overall amount spent and interest charges have increased by 45.6 percent and 12.38 percent year over year, respectively. Banking, financial services, insurance, and oil and gas companies were not included in the investigation since they use a different revenue model.
According to Teji Mandi’s Head of Research, Anmol Das, “Overall demand appears weakened due to global inflation, as evidenced by the net sales growth. However, it’s crucial to keep in mind that due to the mediocre growth reported by IT companies, early earnings data is significantly biased.
Operating profit margins increased throughout the quarter from 21.69 percent to 22.85 percent, which is the highest amount ever recorded in the previous four quarters. Analysts claim that margins improved across a wide range of industries, including FMCG (Fast Moving Consumer, Goods), manufacturing, and cement companies.
According to Nirvi Ashar, a fundamental analyst at Religare Broking, “The recovery in operating profit margins is impressive, and we anticipate even higher margins by the end of the earnings season.”
“The drop in the price of metals, raw materials, and gasoline for the majority of the previous fiscal year is the cause of the improvement in operating profit margins for FMCG, manufacturing, auto accessory, and cement industries. The market is therefore closely monitoring the profits of these sectors.” Ashar
Some analysts suggested that the trends seen in the early reports could change because a large number of companies have yet to disclose their numbers, even though they cautioned that the early earnings data should be interpreted carefully given the IT firms’ lackluster performance, which may have a significant impact. To assess how the remaining statistics perform in this quarter, Ashar suggested using a “wait and watch” strategy.
