India Inc earnings, revenue growth in Q2 may stay muted

Low costs, higher margins may drive sequential pickup in profit growth

- KRISHNA KANT

Brokerages expect slower growth in industry's volumes and revenue in July-September 2024 (Q2FY25). But they anticipate a sequential pickup in profit growth, driven by low costs of raw materials and reduced operating expenses, along with higher margins.

According to their estimates, the combined net profits of Nifty 50 companies are expected to grow 8.7 per cent year-on-year (Y-o-Y) in the quarter, an improvement from a 1 per cent Y-o-Y decline in Q1FY25, but low in comparison to 29.7 per cent in Q2FY24.

The analysis is based on the quarterly number of 49 of the Nifty 50 firms whose earnings estimates are available for Q2FY25 (excluding Adani Enterprises). The combined numbers for previous quarters include the figures for HDFC, which merged with HDFC Bank in July last year.

HDFC's earnings estimates were available for QIFY24 and those have been added to the HDFC Bank numbers for that quarter.

The combined net sales of the index companies (net interest income in the case of banks and shadow banks) are expected to grow just 4.2 per cent Y-o-Y in Q2FY25, growing at the slowest pace in the last 15 quarters. For comparison, these companies' combined net sales were up 4.5 per cent Y-o-Y in Q2FY24 and they were up 6.3 per cent Y-o-Y in QIFY25.