India Inc posts strongest revenue growth in nine quarters

Indian companies reported 19.4% year-on-year revenue growth in the June quarter, the strongest in at least nine quarters, according to ET Intelligence Group data cited by the Economic Times. The growth was driven by the auto, banking, metals, and pharma sectors. Net profit grew 11%, but this was the slowest pace in a year as rising input costs squeezed margins.

BofA India, in a strategy report by Amish Shah, said companies representing about 97% of the Nifty's market capitalisation reported earnings tracking around 3% ahead of expectations, with aggregate earnings growth at 13% year-on-year. The report highlighted that metals delivered the strongest earnings beat. The Economic Times noted that operating margins contracted to 16.6% from 19.6% a year earlier, as raw material costs relative to revenue hit 38%, the highest in at least 13 quarters.

Excluding banking and finance, net profit growth fell to 5.4%, pulled down by losses in the oil and gas sector. Analysts expect a broad-based improvement in the remainder of the fiscal year, with premiumisation trends and festive-season demand providing support. Geojit Investments' Vinod Nair said elevated input costs would persist, while Anand Rathi Wealth's Feroze Azeez forecast 13% EPS growth for large caps and 18-20% for midcaps and smallcaps.