Bhaskar Analysis: Profits of top 694 companies in the country grew just 3.6 percent, lowest in last 17 quarters

The performance of the corporate sector in the country has slowed down in the July-September quarter. The combined profit of 694 companies grew by just 3.6% in the July-September quarter, the slowest growth since June 2020 in the last 17 quarters. This is much lower than the 15% growth in the April-June quarter this year and 29% growth in the September quarter last year. Banks, financial services and oil-gas companies are not included in this analysis as these companies use different revenue models.

Several factors like global slowdown situation, geo political issue, high interest rates due to inflation have proved to be effective on the growth of the corporate sector. Decline in corporate income and increase in depreciation expense have slowed the pace of profits. Apart from this, the total cost of the companies has increased. Other income has also grown at a slower pace. July-September was the sixth consecutive quarter when sales growth remained in the single digits.

The report shows that the sales growth in the September quarter was 8.04%. It was 8.4% in the April-June quarter. Operating profit in the September quarter was 22.03%, the lowest in the last six quarters. The operating profit of the companies increased at the rate of 23.05% in the April-June quarter.

FMCG companies may raise prices-Experts believe that the results of companies manufacturing daily essential products (FMCG) will be lower than expected. How much sales have improved will be indicated by the figures for the festive season. The rising cost of raw materials may force companies to raise the prices of their products.

If companies raise prices, it will help companies increase revenue growth in the second half of the current financial year 2024-25. Meanwhile, the rapid growth of e-commerce and rapid commerce is challenging traditional business growth across industries.

A look at the quarterly performance of top companies