MIDWAY THROUGH THE earnings season, headline numbers are worrying with the top line being the biggest pressure point. Companies have reported muted volume growth attributed by managements to subdued demand and inflation. For a sample of 445 companies, the growth in net sales has remained virtually flat in the June quarter compared with Q1FY23.
However, a sharp fall in input costs has seen operating profit margins expand by a big 305 basis points (bps); the ratio of raw materials to sales are down 500 bps.
While net profits have risen by a strong 38% year-on-year, the growth is virtually flat if BPCL and IOCL, both of which swung from a loss to a profit, are excluded.
Companies that missed estimates on one count or another include HCL Tech, Tech Mahindra, Hindustan Unilever (HUL) and Bajaj Auto. Among the surprises were Dr. Reddy's Laboratories, Larsen & Toubro and ACC.
Results from metals producers were expected to be weak - Tata Steel's net profits fell by nearly 90% year-on-year.
This story is from the July 31, 2023 edition of Financial Express Mumbai.
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This story is from the July 31, 2023 edition of Financial Express Mumbai.
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