India Inc has started showing up signs of a turnaround in terms of revenues and profits.
A study of top of top listed firms’ results, excepting some exceptions, showed that net profit growth in the January-March quarter (Q4FY16) soared 40 percent on a yearly basis, which is the highest in the last 11 quarters.
Research by Crisil also showed that total revenues of these 642 companies raised at 6.1 increased, the fastest in the last five quarters, while advance of ebitda (earnings before interest, taxes, depreciation and amortisation), at 15.2% was at a six-quarter high.
Performance of India Inc has been determined by a combination of enhancement in operating performance and extraordinary gains. Without the one-offs too, bottom line growth is an impressive 17.3 percent, said Prasad Koparkar, senior director, Crisil Research.
Data showed that during Q4FY16, these 642 companies, which represented 72 percent of NSE's total market capitalisation, earned a total net profit of Rs 49,349 crore from a total revenues of Rs 6.18 lakh crore.
On a yearly basis, during FY16 these firms earned an collective net profit of Rs 1.79 lakh crore, up 16.7 percent on FY15 from an aggregate revenue of Rs 22.98 lakh crore, which was up 2.5 percent on the years.
These figures do not comprise results by financial and oil companies, Vedanta and TCS, the last two since there were large one-offs for these companies during FY16 and hence strictly not comparable.
On sectors, airlines, IT, power, sugar and auto components drove net profit growth, while telecom and passenger car firms have lagged, Koparkar said.
The analysis showed that airlines, power, IT and sugar industries showed strong growth in ebitda.
Firms in IT, airlines and auto components sectors benefited from unexpected gains, too, which lifted aggregate net profit growth to 39.9 percent.