Sector-wide profitability grew both YoY and sequentially, driven by steady to rising product pricing and stable to falling raw material prices. Four public sector banks, including the largest lender in the nation, State Bank of India, were among the 40 businesses.
Most businesses observed improved profitability over the three months ending in June as a result of lessening cost pressures.
500, according to statistics analyzed by the markets, recorded a year-over-year (YoY) profit rise of more than 100% for the quarter ended in June. Sector-wide profitability grew both YoY and sequentially, driven by steady to rising product pricing and stable to falling raw material prices. Four public sector banks, including the largest lender in the nation, State Bank of India, were among the 40 businesses, reported an increase in net profit of 149% year over year to Rs 18,736 crore, whereas Punjab National Bank saw a profit increase of almost three times that amount to Rs 1,211 crore.
Along with SBI, three other index giants had their profits more than double year over year: JSW Steel, Oil and Natural Gas Corporation, and Maruti Suzuki India. The strong increase in profits of various companies was due to factors including better operational performance as well as higher-than-assumed other income, according to Kotak Institutional Equities. Automobile, accessory, and tyre manufacturers were one of the well-known industries to record significant growth in profits in the preceding quarter.
Six of the 40 businesses are involved in the automotive, related, and ancillary industries.
The quarter’s profit for tyre manufacturer CEAT increased from Rs 2.6 crore to Rs 146.4 crore. In the June quarter, Samvardhana Motherson International’s earnings increased from Rs 180 crore to Rs 625 crore. Maruti Suzuki India, the largest automaker in India, announced a staggering 2.4-fold YoY increase in net profit for the quarter to Rs 2,463 crore. The automaker reported a huge increase in other income during the quarter, going from Rs 81 crore to Rs 978 crore. In the meantime, ONGC’s consolidated earnings increased by 100% year over year to Rs 17,383 crore. This was mostly brought on by an increase in other income, which also doubled to Rs 2,544 crore. Motilal Oswal Financial Services was among the top businesses to report many among other midcap names.Â
Growth of profits
The company’s overall profit increased from Rs 31.3 crore to Rs 527 crore. Additionally, the provider of varied financial services had a dramatic 605% gain in other income, which helped the bottom line in part. The bottom line of Kansai Nerolac Paints improved due to decreasing cost pressures, a strong increase in other income, and a one-time gain. Net income for the company increased fivefold year over year to Rs 744 crore. The largest steel maker in India, JSW Steel, recorded an 188% increase in profit year over year to Rs 2,428 crore in the metals sector.
Way up frontend while there were more hits than misses in the June quarter, the growth was not widespread since certain sectors, like the consumption industry, still have low consumer conference. while cost pressures subsided in the most recent quarter, crude oil prices have risen slowly nonetheless, rising about 13% in the previous month. For IT companies that focus on exports, pressure on earnings growth is still present. Analysts will therefore wait for a further quarter to obtain a clearer view of the growth trend. For a while, the Indian market may consolidate…Rich valuations across sectors primarily take a rebound in both volumes and profitability into account, but they do not take risks into account, according to Kotak Equities.”.
We anticipate ongoing pressure on most consumption businesses’ profitability and returns over the next few years, which will probably affect their high multiples, according to the brokerage.
