Aggregate numbers were influenced by the performance of Reliance Industries (RIL), the country’s largest company by revenue and market capitalisation, and by the top software exporters.
The quarterly trend is expected to remain muted given the slack in consumer demand and lower government expenditure. For a common sample of 171 companies, revenue grew 7.7% year-on-year, while net profit rose 8.2%. This was against 6.4% sales growth and 5.1% profit rise in the previous year. Operating margins expanded to 20.4%, from 19.3% year-on-year, helped by the improved margins of RIL and the IT sector. RIL contributed 45% to aggregate revenue and 27.4% to net profit. Its revenue from operations increased 7% to ₹2.4 lakh crore.
Software Companies’ Revenue Increases 5%
Reliance Industries’ net profit rose 12% to ₹21,804 crore, helped by a strong showing from the retail and oil-to-chemicals divisions.Excluding RIL, the sample’s revenue and profit growth rose 8.4% and 8.5%, respectively, given the stronger influence of the IT sector on the overall bottom line.
Aggregate revenue of software companies that reported December quarter numbers rose 5%, compared with a modest 2.4% growth in the year-ago quarter, while net profit increased by 11.4%, compared with a fall of 2.3% a year ago. The sector contributed 31.2% to the sample’s revenue, while its share of 44.9% in overall profit was at a six-quarter high.
Excluding the IT sector numbers, the sample’s net profit growth shrank to 5.7%, while revenue growth improved to 9%.
At the beginning of the results season, analysts had anticipated single-digit growth in sales and net profit, dragged down by the metals and oil & gas sectors amid volatile commodity prices. Motilal Oswal Financial Services had predicted year-on-year earnings growth of 6% for the sample of companies tracked by the brokerage, which was expected to improve to 10% after excluding metals and oil companies. In the coming weeks, more companies across sectors are slated to announce quarterly numbers, which will make the aggregate trend clearer.
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