India Inc topline nearly halves to 9.3% in Q3, net dips too
Revenue growth of India Inc nearly halved to 9.3 per cent in the third quarter from 17.7 per cent a year-ago, due to a combination of factors, including the ongoing restocking process and adjustment to GST at the SME level, says a report.
Similarly, net profit too clipped lower at 24.6 per cent for the three months to December 2017 from 25.3 per cent a year-ago. But with sharper decline in growth in net sales, overall net profit margin improved from 7.3 per cent to 8.3 per cent during this period, says a Care Ratings report today.
The report is based on a study 1,567 companies and excludes banks and finance companies -banks as they have extreme performance due to the NPA issues and finance companies due to their high interest costs.
According to the report, while different sectors have been affected by industry specific reasons, lower revenue growth may be attributed to a combination of the ongoing restocking process, adjustment to GST especially at the SME level, limited pick-up in demand, and high base effect.
However, the report concludes that the overall earnings performance in the three-months to December "indicates a recovery is on the anvil".
"The consolidated picture is lower in terms of profit, which means that Q3 was able to overwhelm the lower performance in the first two quarters," the report said.
"If such a profile is maintained or improved in fourth quarter, then it would be possible to conclude that the corporate sector has turned the corner and would be on an upward trajectory next year," it added.
The report noted that the third quarter has been particularly positive for the manufacturing sector with IIP growth being 2 per cent, 8.8 per cent and 7.1 per cent respectively in October, November and December.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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