The revenue growth of early birds or companies that have declared their Q4FY24 (March quarter) numbers is the highest in the last four quarters.
The 178 companies (excluding their listed subsidiaries) that declared their results have reported a sales growth rate of 13.2 per cent year-on-year (Y-o-Y), taking aggregate revenue to Rs 9.1 trillion.
Including other income, growth is at 16 per cent, the highest in the last four quarters.
Earnings growth for these companies came in at 12.7 per cent, which was better both on a Y-o-Y basis as well as sequentially.
Over the year-ago quarter, the Q4 bottom line was up 310 basis points while it gained 110 basis points over the December quarter.
About 70 per cent of incremental profit came from the banking, financial services and insurance (BFSI) sector alone.
Early-bird results are dominated by software majors and companies in the banking and financial services space with about a third of these companies belonging to these two sectors.
As was the case in the previous quarters, BFSI companies have led on revenue as well as net profits.
The gross interest income of the BFSI sector was up 30.3 per cent Y-o-Y at Rs 2.36 trillion.
Their earnings growth too was steady at 22.4 per cent, the highest in four quarters.
Axis Bank was the biggest contributor to incremental profits in the BFSI space.
The performance in the BFSI space, especially by the banking sector, was led by strong credit growth, higher fee income, and healthy asset quality though margins were under pressure due to higher deposit rates.
Excluding the BFSI space, sales growth dropped to 8.2 per cent while earnings growth slipped to 6.4 per cent, the lowest in three quarters.
While the oil and gas sector s revenue growth at 10.1 per cent was lower than the overall growth of the 178 companies, net profits of the companies in this sector fell 3.1 per cent Y-o-Y.
This is largely due to a decline in consolidated net profits of Reliance Industries by 1.8 per cent due to a higher tax outgo in the quarter.
What has pulled down revenue growth for the early birds is the performance of information-technology (IT) companies and non-BFSI, non-oil and gas (manufacturing) companies.
The top line growth of the 14 software companies that have declared their results has been flat.
Barring a few, most IT majors have either registered a fall or recorded low single-digit growth. Despite strong order wins and higher total contract values, managements have maintained their cautious outlook for the near term as clients put discretionary spend on hold and instead give priority to cost optimisation deals.
Barring select sectors, companies in manufacturing have struggled.
Commenting on the performance of the companies in the non-BFSI and IT sectors, Deepak Jasani, head of retail research at HDFC Securities, said companies in the real estate and hotel sectors had shown strong sales and profit growth Y-o-Y and this was also the case with auto companies.
While Indian Hotels registered a 27 per cent increase in net profits, Bajaj Auto and Maruti Suzuki saw a net profit growth rate of 18 per cent and 47.8 per cent, respectively.
Some metal companies could be a drag on top line front, given the Y-o-Y fall in realisations, he added.
Some of the early birds also include fast-moving consumer goods heavyweights Hindustan Unilever and Nestle.
Growth in volumes for companies in this space has been muted with demand challenges in the rural segment remaining high.
Most companies in the sector benefited from falling raw material costs at gross level though at operating level this was not captured, given higher advertising and marketing costs.
Aggregate operating profit margins were up 160 basis points Y-o-Y to 30.8 per cent with some gains from the raw material front as well as employee costs.
Gaurang Shah, senior vice-president, Geojit Financial Services, said: When there is pressure on volumes, companies focus on operational efficiencies and take steps to cut costs. This helps them improve their margins.
