Consumption remains weak

Higher inflation is affecting operating margins

An analysis of the September-December 2021 quarter results of 2,986 listed companies shows inflation is biting. Expenses are up, margins have compressed, and private consumption is weak. The base effect is also wearing off, since Q3 2020-21 was very profitable. On the positive side, commodity sectors like oil and gas producers, miners, chemicals, and industrial metals have done well. There are some signs of recovery in activity. The aviation sector has made a comeback, logistics and shipping have grown, and hospitality is reviving. Overall, the sample declared net sales of Rs 32 trillion, a rise of 24 per cent year-on-year