It’s the fourth consecutive quarter of double-digit profit growth while top-line expansion has once again inched closer to 10% after dipping to 6.25% in the previous quarter. In the year-ago period, sales and profit grew by 7.8% and 4.5%, in that order.
The total sample’s margin has remained flat at 21% compared with the year-ago level, though it has dropped below 22% for the first time in four quarters, reflecting the impact of the lending sector’s shrinking profitability. Excluding banks and finance companies, the operating margin of the remaining sample improved by 160 basis points year-on-year to 17.6%.
Slower Growth in IT In addition, the profit growth of the truncated sample improved to 16.8% in the September quarter.
The share of the banking and finance sector in the total sample’s net profit shrank to 45.4% from 53.6% in the year-ago quarter. The IT sector has also reported slower net profit growth of 3.7% in the September quarter compared with 10.9% growth a year ago. The sector has been facing slower project ramp-ups amid uncertainties pertaining to US tariffs. At the beginning of the current earnings season, analysts had predicted a gradual uptick helped by macroeconomic stimuli in the form of rationalisation of GST and the Reserve Bank of India’s liquidity push. Elara Capital expected the first double-digit profit growth in six quarters for the companies under its coverage, driven by sectors including cement, real estate, metals and energy. “GST and income-tax cuts, together with impending monetary easing, reinforce visibility for a multi-quarter earnings upcycle,” the broking firm said in a preview.
