Earnings growth slowed despite companies in most non-financial sectors reporting higher operating margins from lower commodity prices and a decline in interest costs.
Sectorally, the earnings slowdown was largely led by oil & gas companies, non-bank lenders, fast-moving consumer goods, cement and iron & steel firms. By comparison, banks, automotive companies, non-ferrous metal producers, pharmaceutical companies and capital goods companies reported strong double-digit growth in earnings for Q1FY25.
The combined net profit of a common sample of 2,909 companies that have so far declared their quarterly results for Q1FY25 is up 4.4 per cent year-on-year, growing at the slowest pace in the past six quarters. For comparison, the combined net profit of these firms was up 40.9 per cent Y-o-Y in the same quarter last year (Q1FY24), and up 10.7 per cent Y-o-Y in the previous quarter (Q4FY24).
The companies in our sample reported a combined net profit of 3.39 trillion in Q1FY25, down 4.23 per cent from a record high of 3.54 trillion in Q4FY24 and ₹3.25 trillion in Q1FY24 (see charts).
Esta historia es de la edición August 16, 2024 de Business Standard.
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FY25 as weak-earnings year is gradually getting priced in
Even as many blame record foreign portfolio outflows for the market downturn, the real culprit is weak earnings amid rich valuations, says GAUTAM CHHAOCHHARIA, head of global markets, India, UBS. In an interview with Samie Modak in Mumbai ahead of the UBS India Summit, Chhaochharia highlights that 2024-25 (FY25) weak earnings growth is now factoring into market expectations. Investors are shifting their focus to the actions of the Reserve Bank of India (RBI) and the central government, as well as the outcome of upcoming state elections. Edited excerpts:
Non-disclosure of foreign property invites ₹10 lakh penalty per yr
Many high-net-worth individuals who allegedly own undeclared properties in Dubai have received notices from the tax office.
Modest increase in SBI share price after Q2
Brokerages positively revise their earnings forecasts, maintain target price
Strong growth, margin metrics could support LIC's valuations
In the September quarter (Q2FY25), LIC reported net premium income of ₹1.2 trillion, up 12 per cent year-on-year (Y-o-Y).
Mkts settle flat on FPI selling
Benchmark stock indices Sensex and Nifty closed flat in highly volatile trade on Monday as continuous foreign portfolio investors (FPI) selling, disappointing quarterly earnings and weak trends from Asian markets dented investor sentiment.
Rising retail ownership to spur equity cult in India: Morgan Stanley
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China wrests MSCI EM IMI top spot from India
Change in the pecking order comes amid a sharp rally in Chinese equities
HAVING A TRUCK WITH LNG
Things are changing rapidly with the entry of the private sector, but the path of LNG trucks in India is strewn with rocks
Accounting for climate finance
The climate negotiations meeting of the Conference of Parties signatory to the convention, COP29, at Baku, Azerbaijan, where most nations of the world have gathered currently, shall deal with various concerns relating to climate change.
Re-examine trade pacts
India must consider entering CPTPP, RCEP
