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Top NSE listed firms log best profit growth in six quarters

Indian companies' total profits are expected to grow 25% in the next fiscal year, which would be the highest in Asia

Reuters 

National Stock Exchange, NSE
National Stock Exchange, NSE

for in India's broader rose at their best pace in six quarters during July-September, according to Eikon data, showcasing how profits are finally looking up after a prolonged spell of sluggish growth.

Net profits for in the index rose by an average of 11.9 per cent in the September quarter, the biggest gain since a 31 per cent expansion in January-March 2016, data available for 25 in the index showed.

That was a median 5.2 per cent above consensus forecasts, the biggest beat since the March 2016 quarter.

According to the data, Indian companies' total profits are expected to grow 25 per cent in the next fiscal year, which would be the highest in Asia.

Analysts said the results in the quarter were a needed validation for a stock market that has surged this year on bets that would improve. This follows India's action to remove high-value currency bills late last year that dented the cash-dependant economy, leading to several quarters of sluggish profit growth.

The results also highlighted how Indian withstood the unveiling of a national goods and services tax on July 1, which sent profits down 3.1 per cent for the in the April-June quarter as they curbed production to prepare for the tax rollout.

"It's the beginning of better times, as far as Inc is concerned," said Deven Choksey, promoter of KR Choksey Group.

"The economy is gaining momentum, this is the beginning of higher for the corporate sector."

The index has surged nearly 27 per cent this year, setting a record-breaking rally.

Sectors such as consumer goods and automakers posted strong profit growth, in a welcome indication that demand was improving, analysts said.

Tata Motors Ltd reported a nearly three-fold jump in quarterly profit at 24.83 billion rupees ($386 million), blowing past estimates for the

Energy and metals also performed well in the quarter, helped by higher commodity prices.

Reliance Industries Ltd, for example, posted a 7.3 per cent rise in standalone profit at 82.65 billion rupees ($1.28 billion), its highest ever.

But telecom firms posted a drop in profits as the sector continues to be hurt by cutthroat competition from upstart Jio Infocomm, while healthcare stocks were hit by regulatory scrutiny and pricing pressure in the key United States market.

 

First Published: Wed, November 29 2017. 17:19 IST
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