Q3 FY25 results review: Little to cheer for in early-bird showing

RIL provides silver lining in otherwise lacklustre results by non-financial firms

There is little to cheer in the early-bird results for Q3FY25 and the numbers suggest a continued slowdown in corporate revenues and earnings growth.

 

The overall numbers for non-financial firms were, however, boosted by an earnings recovery by Reliance Industries Ltd (RIL) after a contraction in the three previous quarters.

 

The companies in banking, non-banking financial services and insurance (BFSI) once again outperformed the rest of India Inc with double-digit growth in earnings and revenue in Q3FY25 while the non-BFSI sector reported single-digit growth for the eighth consecutive quarter.

 

The performance of the non-BFSI segment was impacted by a slowdown in revenue and profit growth of IT (information technology) services exporters such as Tata Consultancy Services, Infosys, and Wipro. These companies are the biggest component of the early-bird sample, accounting for 46 per cent of its net profit and 31 per cent of net sales.

 

The net profit (adjusted for exceptional gains & losses) of the 162 early-bird companies in the sample was up 8.7 per cent year-on-year in Q3FY25, an improvement from a 6.2 per cent growth in Q3FY24 and 4.4 per cent Y-o-Y growth in Q2FY25. 

 

Net sales (gross interest income in the case of lenders) were up 6.7 per cent in Q3FY25 against 6.0 per cent growth in Q3FY24 and 4 per cent in Q2FY25.

 

The companies reported combined net profit of Rs 66,630 crore in Q3FY25, up from Rs 61,325 crore a year ago and Rs 64,180 crore in Q2FY25. Their net sales grew to Rs 6.03 trillion in Q3FY25 from Rs 5.65 trillion in Q3FY24 and Rs 5.85 trillion in Q2FY25. 

 

BFSI companies’ combined net profit was up 12.1 per cent Y-o-Y to Rs 14,447 crore in Q3FY25 from Rs 12,977 crore a year ago but a contraction from Rs 15,752 crore in Q2FY25.

 

For comparison, their net profit was up 11.3 per cent Y-o-Y in Q3FY24 while it was up 16.1 per cent Y-o-Y in Q2FY25. These companies’ net sales (or gross interest income/premium income) were up 12.5 per cent in Q3FY25, decelerating from 19.9 per cent growth in Q3FY24 but a marginal improvement from 12.3 per cent growth in Q2FY25.

 

The combined net profit of non-BFSI companies was up 7.7 per cent to Rs 52,083 crore in Q3FY25 from Rs 48,347 crore in Q3FY24 and Rs 48,428 crore in Q2FY25. For comparison, these companies’ net profit was up 4.9 per cent in Q3FY24 and higher by 1.1 per cent in Q2FY25.

 

These companies’ net sales were up 5.5 per cent in Q3FY25, an improvement from the 3.6 per cent growth in Q3FY24 and 2.4 per cent expansion in Q2FY25.

 

In comparison, the combined net profit of companies excluding BFSI and oil & gas (that includes Reliance Industries) was up 9.1 per cent Y-o-Y in Q3FY25, an improvement from the 1.5 per cent Y-o-Y growth in Q3FY24 but a deceleration from the 10.8 per cent increase in Q2FY25.

 

Net sales of companies ex-BFSI and oil & gas companies were up 6.7 per cent in Q3FY25 as against the 3 per cent growth in Q3FY24 but a slowdown from 7.1 per cent in Q2FY25.

 

Reliance Industries’ net profit (adjusted for exceptional gains & losses) was up 7.4 per cent Y-o-Y to Rs 18,540 crore in Q3FY25 from Rs 17,265 crore a year ago. In comparison, its adjusted net profit was up 10 per cent in Q3FY24 but it had declined by 4.8 per cent in Q2FY25.

 

The company accounted for 24 per cent of the incremental earnings growth of all early-bird companies in Q3FY25.

 

Most of the top companies in sectors such as banking, automotive, oil & gas, power, mining & metals and other manufacturing segments are yet to declare their results for Q3FY25 and the overall earnings trajectory is likely to change post these big results.