Net profit for a common sample of 186 companies that have declared results so far in the June quarter season rose to a five-quarter high of 18.5% year-on-year, driven by RIL’s one-time benefit from selling its investment in Asian Paints worth ₹8,924 crore while revenue increased by 4.6%, lowest in at least nine quarters. Excluding RIL, revenue and profit grew by 5.7% and 7.3% respectively, both at a nine-quarter low.
Due to the one-off gain, RIL’s share in the sample’s net profit shot up to 24.4% in the June quarter compared with 16.4% in the year-ago quarter thereby skewing the overall profit growth upwards. Its share in the sample’s revenue fell marginally to 31.8% from 32.5% year-on-year.
AgenciesBanking and finance companies have reported weak numbers amid pressure on net interest margin and lower credit offtake. At the aggregate level, banking and finance companies in the sample reported nine-quarter low growth of 6.4% and 5.1% in revenue and net profit for the June quarter year-on-year. For the IT companies in the sample, revenue and profit growth of 3.4% and 4.6%, respectively was at a five quarter low. At the beginning of the quarter, analysts had anticipated sectors including capital goods, cement, healthcare, oil and gas, and telecom to drive the profit growth to double digits.
“The key highlight of the quarter is anticipated to be the better sectoral breadth of earnings growth. Multiple sectors are expected to post double-digit profit growth,” mentioned Motilal Oswal Securities in a preview report. The current result trend is based on a small initial sample of companies. In the coming weeks, more companies from sectors that are expected to do well will declare results, which is likely to make the earnings picture clearer.
