Sept-quarter results review: No recovery yet

It was another muted quarter for India Inc, with aggregate profit growth at both the operating and net level growing at only under one per cent over a year-ago period. The sample is of 2,300 companies which have declared results so far. The numbers are worse for the benchmark indices such as the Nifty, where operating and net profit are down between three-five per cent over the year-ago quarter, with aggregate numbers below expectations.

For the broader universe, while companies benefited from lower raw material costs, boosting gross profit margins, higher employee costs and other expenses limited gains at the operating level. Gains at the net level were negated by higher depreciation and interest costs. (CLICK HERE TO SEE CHARTS AND TABLES)

Broadly, capital goods, metals, cement and fast-moving consumer goods disappointed, while financials and information technology delivered largely in line with expectation. Companies in the pharmaceutical (barring Lupin and Sun Pharma), automobile (except for Tata Motors and Eicher) and oil marketing surprised positively.

Analysts at Kotak Securities say the underlying trends of volumes, order book and non-performing loans indicate economic recovery remains elusive. What has aggravated matters across the consumption space is lack of rural demand due to unseasonal poor rain.