Corporate profits to soar 26% in Q3: CMIE

India Inc is expected to post a healthy 25.9% growth in their profits in the third quarter on softening of input prices and lower forex losses, according to economic think-tank CMIE.

"We expect corporate profits to grow by a smart 25.9% in the December quarter compared to the year-ago quarter," the Centre for Monitoring Indian Economy (CMIE) said in its latest report on the domestic economy.

The improvement would be seen across segments, the report said, adding net profit of the manufacturing sector (excluding petroleum products) is likely to grow  by a healthy 66.9% and that of the financial and non-financial services sector by 16% and 16.7%, respectively.

The international prices of vegetable oil, natural rubber, cotton, coking coal, iron ore, copper concentrate are lower than their year-ago levels, it said.

"The input cost pressure for the manufacturing companies will ease substantially in the December 2012 quarter. Raw material expenses of the manufacturing sector (excluding petroleum products) are expected to rise by only 7.4%," it said.

The agency expects corporates to see lower foreign exchange losses during the December quarter.

"The rupee is expected to depreciate by only 2.4% as against 8.1% depreciation witnessed in the year-ago quarter. Consequently, other expenses of corporates, which comprise the forex losses, are expected to rise by only 5.6% during the December quarter. This will be much slower than the 11% growth expected in sales of corporates during the quarter," CMIE said.

The think-tank said the IT industry is expected to post over 11% growth in net profit, largely aided by a weak rupee.